Raw Land Development Projects
With big players swooping on a particular area, raw land
development takes a new meaning. Pumping in of big money makes
land development costs rise. Investment in land development at
basic stage is a risky proposal as it is more speculative than
developed land. Evaluation of land prices becomes difficult
owing to its speculative nature, which makes procuring finances
for raw land development a difficult job.
Raw Land Development and Finances Finances for raw land
development become all the more difficult for undeveloped land
away from the urban core. Large finance companies and banks
prefer financing land development projects that are closer to
population. Some big lenders extend raw land development loans
to non-commercial clients, apart from those who have existing
sewer lines, road access, and other infrastructure. Finance
companies that do make finances available for speculative raw
land development projects make sure that the buyers contribute
50 percent of the cost, besides paying interest at 10% - 12%,
two to three points in financing charges, and avail the loan for
about 18 to 24 months only. Finance companies prefer safer land
development projects than projects that are waiting for a big
opportunity to come by.
As lending terms for raw land development projects get tough,
seller finance and all-cash deals come into play, which can make
raw land purchasing difficult for middle-class buyers. Raw land
development financing does not seem very promising, as the land
may not generate income for a long time.
Raw Land Development from the Dealer View Point Raw land
development deals are fetching a higher price than it was a few
years ago. Finance and raw land development projects are closely
related. Easy land development finance places money in the hands
of the big players, who go on a buying spree, escalating land
prices. According to dealers, a cut in the easy availability of
finances helps stabilize the land development prices. A slow
down will lead to a drop in the land development costs. Raw land
development projects are likely to take off in places closer to
cities. Anticipation of population growth makes investment
worthwhile in raw land development projects. Promoting such raw
land development projects can help bring in customers preferring
to stay away from congested city living.