Is Buying Land a Good Investment? Pros and Cons

Buying vacant land can easily be overlooked for many aspiring homeowners—it doesn’t seem as exciting as purchasing a new home. At first glance, it might seem pointless to settle for buying land alone.

But the truth is, there are several advantages to buying a piece of vacant land. If you’re struggling to enter the market, keen to invest, or want to build a home unique to your style and needs, vacant land can be an attractive and low-maintenance investment option.

Reason #1: It’s potentially less expensive

Buying undeveloped land can often be cheaper than buying an established property in the same location. Property is at an all-time high these days, especially in major cities throughout Australia. For some perspective, the highest property prices are in Sydney’s eastern suburbs—the median house price in Bellevue Hill is $9,875,000, while the median across NSW is $1,214,100.

Most are finding it hard to enter a seller’s market like this, so vacant land can potentially offer a more affordable way in. Land is a low-maintenance investment, so you could consider purchasing a vacant plot with the idea to build when your budget allows.

How can I buy land?

Buying land starts with understanding your goals—whether you plan to build soon or invest for the long term. Start by researching areas that fit your budget and future plans. Consider factors like zoning, access to utilities, and any building restrictions or council regulations. 

From there:

• Speak to a mortgage broker or financial adviser to explore your finance options, especially if you use a loan or government scheme. Organise pre-approval to know your borrowing power and act quickly when you find the right block.
• Engage a conveyancer or solicitor to help you understand the legal aspects of the purchase, including land titles and contracts.
• Do your due diligence—check flood zones, soil quality, access rights, and nearby development plans before making an offer.
• Make your offer and proceed to settlement just as you would with a regular property, with support from your legal and finance professionals.

Reason #2: It’s low maintenance

Vacant plots of land are what many call a ‘hands-off’ or ‘passive’ investment. This means that when you purchase vacant land for investment, your biggest concern for maintenance will be having someone mow the lawn occasionally, to keep it looking respectable.

You also will not need to worry about hiring a property manager to manage it; you can relax about the repair work. With no property on the land, you won’t need to employ the help of a plumber or repairman, leaving you with not much to worry about.

Reason #3: You can do what you like with it (within reason)

One of the biggest reasons Australians like to buy a vacant plot of land is the flexibility they receive to customise their own home to suit their lifestyle. When you buy a vacant plot, that land is all yours to do what you like, within reason.

Provided you stay within council restrictions and the area’s building codes, you can leave it the way it is, sell it to a developer, or build your dream home with just the right-sized yard and living space to suit your needs.

You could even turn it into a commercial property and receive investment returns through renting or selling (so long as it follows local zoning restrictions).

A vacant block is a blank canvas, one of its most attractive features.

Reason #4: Vacant land potentially offers long-term appreciation

You may take a tactical approach to purchasing land. You may choose a location that might not be desirable to homebuyers at the time, with the possibility that things change over time. As infrastructure develops, like transport lines, commercial areas, and new homes are built, your investment will be passively accruing value along with these changes.

Vacant land purchases usually stay in the same condition as when you purchased them. In contrast, houses and properties lose value if they do not regularly have improvements and maintenance.

Reason #5: Vacant land is a relatively simple purchase

Buying a vacant plot of land is significantly less effort than buying a home or other property. While you should research and obtain the necessary advice and information, you don’t need to see the land to purchase it—this is excellent news if you live in another state and don’t have the time or means to travel.

The downsides of vacant land

While there are advantages to purchasing vacant land, this type of investing has a few disadvantages.

First, when buying land, research and advice are key, as you will want to ensure you have purchased land in a good location for growth on your investment. Without guidance and the right information, there is a possibility you could buy land out in ‘the sticks’ that has no growth, leaving you stuck with a bad investment.

If you’re borrowing to invest, your vacant land will not earn an income for you like a rental property would. The appreciation and return on investment come later over time, and you will only see them when you cash out to a buyer who will hopefully purchase it for more than you originally bought it for.

Vacant land can be a smart and flexible step toward building wealth—but only if it aligns with your goals. Speak to Watson Wealth today and make a confident, well-informed move.

Disclaimer:

Watson Mortgages Pty Ltd (Nestor Ramirez Credit Representative Number 378816) is authorised under Australian Credit Licence 389328.

Watson Mortgages Pty Ltd ABN 29 642 538 967 is a separate entity to Elliot Watson Financial Planning Pty Ltd.  Elliot Watson Financial Planning Pty Ltd is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.

This page provides general information only and has been prepared without taking into account your own objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances and your full financial situation will need to be reviewed prior to acceptance of any offer or product. It does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply. Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.