Monday, February 15, 2010
Anticipating a real estate boom, the investors are snapping up vacant residential lots in US. The vacant lands look more attractive to the real estate investors as they can cost a developer about 25 percent of the finished home price.
There are a number of these ready-to-go lots on the market at about half what they actually cost to prepare. Jumping upon the opportunity, the investors are buying the vacant lots, thinking that that the time will come soon when they will be in demand.
According to Scott Clark, President of American Development Partners, the country needs 1.2 million new units for the next 10 years just because of population growth. The company has bought thousands of vacant lots all over the West. The builders built about 500,000 units in 2009 and 600,000 units in 2008, so there eventually will be pent-up demand, he said. “We want to get as many of those finished lots as we can because as demand begins to rise, the need for housing will become painfully obvious. The delta (ratio of change to value of underlying asset) in this investment will be significant”, he added.



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