Maximizing Profit: Buying Recreational Property with Selling in Mind

Maximizing Profit: Buying Recreational Property with Selling in Mind

Table of Contents

1. Introduction
2. The Principle of Buying with the Selling in Mind
3. Importance of Location
4. Ensuring Good Access to the Property
5. Making Value-Adding Improvements
6. Considering the Price
7. Summary
8. FAQ

Introduction

In the realm of real estate investments, buying recreational property can be an exciting endeavor. However, it is crucial to approach this purchase with a long-term perspective. While the initial intention may be to keep the property for a lifetime and pass it down through generations, life circumstances can change. Therefore, it is advisable to follow the principle of buying with the selling in mind. This approach ensures that not only do you enjoy the property, but it also holds value for potential future buyers. In this article, we will explore the four key points that make up this principle and guide you through making a wise recreational property investment decision.

🔍 The Principle of Buying with the Selling in Mind

When purchasing recreational property, it is important to keep in mind the possibility of selling it in the future. While your current intention might be to hold onto the property indefinitely, unforeseen life changes or circumstances may require you to sell. By considering the four points outlined below, you will be better equipped to make a profitable and strategic buying decision.

🌍 Importance of Location

One of the first factors to consider when buying recreational property is its location. The age-old saying "location, location, location" holds true in this context. A property situated in a desirable area, with a large population within a two to three-hour driving distance, will have a greater likelihood of selling quickly and at an optimal price. While it may be tempting to purchase an extremely remote property for privacy and seclusion, it may limit your ability to attract potential buyers when the time comes to sell. Therefore, it is crucial to strike a balance between solitude and accessibility when selecting the location of your recreational property.

Pros:

• Privacy and seclusion
• Potential for a unique and tranquil experience

Cons:

• Limited buyer pool due to remote location

🚗 Ensuring Good Access to the Property

The accessibility of a recreational property is an essential aspect to consider when buying with the selling in mind. Prospective buyers typically prefer properties with deeded access, meaning they are connected to a public road or possess a legal easement or servitude. When a property lacks proper access, it becomes less attractive and harder to sell. Furthermore, lenders are more likely to offer financing options to buyers who have legal access to the property. Therefore, ensure that the property you choose has good access to maximize its marketability.

Pros:

• Easier access for personal enjoyment
• Higher chances of attracting potential buyers

Cons:

• Limited interest from buyers without legal access

🏡 Making Value-Adding Improvements

When you acquire recreational property, it is natural to want to make it your own. However, it is important to choose improvements that not only cater to your preferences but also add long-term value to the property. Considerations such as constructing roads, creating food plots, and building deer stands or duck blinds can enhance the property's overall appeal. These improvements not only make the property more enjoyable for you but also make it more turnkey and user-friendly for potential buyers. It is crucial to strike a balance between personal preferences and improvements that will appeal to a wider range of people.

Pros:

• Tailoring the property to your preferences
• Adding value and marketability

Cons:

• Overdoing personal preferences that may not appeal to potential buyers
• Costly upgrades that may not provide a significant return on investment

💰 Considering the Price

Finally, the price of the recreational property plays a significant role in its marketability. Buying the property at a fair market value, rather than trying to negotiate an unbelievably low price, increases the chances of selling it quickly if the need arises. While making reasonable improvements can positively impact the property's value, overpaying for extravagant upgrades may not yield a substantial return on investment. By being mindful of the property's price and ensuring it aligns with the market, you will be better positioned to sell it in the future.

Pros:

• Increased chances of selling quickly
• Potential to recoup the investment with reasonable improvements

Cons:

• Potential loss if the property needs to be sold shortly after purchase

Summary

Buying recreational property with the intention of keeping it for a lifetime is an admirable goal. However, life circumstances can change, necessitating a sale. By applying the principle of buying with the selling in mind, focusing on location, ensuring good access, making value-adding improvements, and considering the price, you set yourself up for a successful investment. Remember, striking a balance between personal enjoyment and marketability is key to making a profitable recreational property purchase.

FAQ

Q: Can I sell a recreational property if I initially intend to keep it for a lifetime? A: Yes, it is always a possibility that circumstances may change, requiring you to sell the property. It is advisable to buy with the selling in mind to optimize marketability.

Q: How important is the location of a recreational property? A: The location plays a crucial role in attracting potential buyers. A property in an area with a sizable population within a two to three-hour driving distance is more likely to sell quickly and at an optimal price.

Q: What impact does access have on selling a recreational property? A: Good access, such as deeded access or legal easements, increases the property's desirability. Buyers prefer properties with easy accessibility, and lenders usually require legal access before providing financing.

Q: What kind of improvements should I make to add value to my recreational property? A: Focus on improvements that appeal to a broad range of potential buyers, such as establishing roads, creating food plots, and constructing deer stands or duck blinds. Avoid extravagant upgrades that may not provide a significant return on investment.

Q: How should I determine the price of a recreational property? A: Buying the property at a fair market value ensures a greater chance of selling it quickly if the need arises. Avoid overpaying for specific upgrades that might not yield a substantial return.