Is Maryland Land a Good Investment?

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Is Maryland Land a Good Investment?
By

Bart Waldon

Maryland, known as "America in Miniature" for its blend of Mid-Atlantic culture and varied landscape, offers attractive qualities for land investment. This small state contains ocean coastline, lowland farms, forested mountains, and the major metropolitan areas of Baltimore and the state capital Annapolis. With strong economic fundamentals rooted in the biohealth, aerospace, and IT industries, Maryland provides stability combined with growth potential not always found together.

When considering land investment in Maryland or any location, the complex real estate market calls for in-depth analysis of economic factors like market demand, property appreciation over time, and opportunities to add value through development or resource extraction. While land itself passively accrues at the rate of inflation, more aggressive returns rely on external forces. We will explore all angles, but the short answer is yes – Maryland tends to present a worthwhile land investment for the patient investor with the proper strategy.

Local Land Market Fundamentals

Maryland spans 12,406 square miles, ranking 42nd among U.S. states by total area. Over 6 million residents amount to a density of approximately 600 people per square mile. The state continues growing at a rate above the national average, indicating strong in-migration and housing demand. However, with nearly half the state occupied by the metro areas of Baltimore, suburban Washington D.C., and Annapolis, development spreads outward from these central hubs.

This pattern of growth concentrates along transportation corridors into the outer suburbs and exurbs. As communities evolve farther from urban infrastructure, demand rises for construction of new housing, schools, retail centers to serve the needs of decentralized populations. Raw land holds underlying value connected to adjacent community expansion.

Good Locations for Appreciation

While Maryland’s development future looks generally bright, prime land investment opportunities sit where progress aims next. We can predict areas of growth by analyzing patterns and announcements over recent years.

For example, central Maryland counties like Howard, Frederick, and Anne Arundel lead state population gains. Infrastructure projects in these regions reveal the likelihood of continued residential and commercial construction. The highway expansion of Route 32 in Howard County facilitates access from suburbs to urban job centers, enabling further outlying development. Meanwhile, the outer D.C. suburbs consistently absorb housing needs due to tight supply in the city.

Research at the county level also uncovers the next frontiers. Although Allegany and Garrett Counties decline in population, they contain investment-grade real estate for mountain and recreational properties. The major resort area of Deep Creek Lake lies in Garrett County, while Allegany’s long border with Pennsylvania and West Virginia positions it as a future logistics hub. Every Maryland region holds advantages to understand.

Key Factors When Evaluating Land Deals

In properly vetting a land purchase, investigation goes beyond surface features into legal standings, restrictions, and tax impacts. It helps working with an experienced land investment firm who constantly survey opportunities across the state. They understand how to weigh the various factors, such as:

  • Zoning Classification – Municipalities delineate areas for residential, commercial, industrial, or mixed-use zoning. This designation sets parameters for how the land can be utilized. Changes in zoning also influence value.
  • Access and Roads – Convenience of ingress/egress affects price. Road frontage suits retail sites, while quiet back acres appeal to homeowners. Explore options to add driveways and pathways.
  • Utilities – Existing electric, water, gas, sewer, internet and other infrastructure saves major development expenses. Assess connections and capacity.
  • Surrounding Properties – Adjacent construction brings traffic, raising visibility. But also research if abutters impose restrictions.
  • Natural Resources – Water bodies, mineral deposits, forestry, and other resources boost prospects for industries in fishing, mining, drilling, agriculture.

This list merely samples the intricate variables underlying land prices and ROI projections. The details make or break an investment, so work with experts who understand them.

Challenges to Holding Raw Land

If purchasing land for capital growth over years, the remote nature that makes it affordable also comes with ownership burdens. Unlike houses or commercial buildings, vacant land produces no immediate returns beyond expected appreciation. In fact, costs quickly add up:

  • Annual property taxes
  • Land maintenance and clearing
  • Insurance premiums
  • Management fees
  • Mineral rights contracts
  • Weather damages

Meanwhile, economic shifts could alter value in unforeseen ways. Remote parcels away from public eyes also risk illegal dumping, squatting or outright theft. It takes active vigilance to monitor vacant acreage.

These factors make direct land ownership better suited for seasoned real estate investors with sufficient capital reserves. Small owners frequently grow frustrated by the associated costs and illiquidity. Inexperienced buyers misjudge risks purchasing land directly and getting overextended.

Alternative Ownership Options

Rather than directly buy land yourself to hold for extended periods, two alternative options better align with moderate investment capacities. Both allow you to capitalize on land opportunities without the hands-on demands.

Land Investment Company - Firms like Land Boss focus wholly on assessing, acquiring and managing vacant land parcels for investment purposes. For an upfront capital contribution to the company, you join other investors in financing deals across the state to diversify risk. They handle all research, purchases, oversight responsibilities and sales. Financial returns get distributed proportionally to the funding participants.

Land Installment Contract - Known as “land contract financing", sellers carry the financing when the buyer cannot qualify for traditional lending. This functions similar to buying a house through a mortgage, with monthly payments, interest, and eventual ownership transfer upon completion. The buyer holds equitable title with full rights/responsibilities during the contract. If unable to finish payments, the seller repossesses the property without foreclosure and resales to another buyer.

Both these options share purchase expenses across pooled resources and expertise. You also avoid needing to personally locate, evaluate and negotiate deals.real estate investment has risks like any market venture. But programs structured around firm strategies bring better protection by minimizing unpredictability.

Benefits of Investing in Maryland Land

Maryland offers several compelling advantages for land investors who deploy the right strategies.

Strong Job Market and Population Growth

Maryland's central location in the dense Mid-Atlantic region provides connections for commerce along the Eastern Seaboard. Cities like Baltimore and Bethesda anchor growing metro regions with diversified economies combining technology, medical research, financial services, tourism and the government sector. This draws new residents for abundant jobs. Maryland registered over 12,000 new residents in 2022, the 10th highest rate of state population growth. More people necessitate more housing starts and commercial development.

Favorable State Business Policies

Maryland aggressively courts business relocations with incentives like tax breaks, grants and infrastructure assistance. With a high-income populace and commitment to education, Maryland ranks as the 3rd most innovative U.S. state by the Consumer Technology Association. This fertile climate grows companies and raises property values around new sites.

Tourism Upside

Popular tourist destinations enhance Maryland's investment habitat. Ocean City along the Atlantic coast stands as one of the top 10 most visited beach towns in the country. The western mountains also draw vacation-home buyers looking for skiing, fishing and other recreation. This fuels construction of hospitality properties, vacation rentals and amenities to serve leisure travelers.

Conclusion - Maryland Presents Opportunities

Maryland's accelerating population and business growth traces clearly from housing demand to job market expansion to infrastructure investment. This cycle of prosperity underpins real estate across all sectors. While directly owning land allows maximum flexibility and control, it also exposes you completely to inherent costs and pitfalls. The experienced team at Land Boss properly balances strong returns through land investment with risk management. Learn more about our available offerings if the Maryland land market appeals to your investing strategy.

Frequently Asked Questions (FAQs)

What parts of Maryland are best for buying land as an investment?

The areas surrounding Baltimore, suburban Washington D.C., and Annapolis tend to see the highest demand. These major metro regions continue expanding outwards for housing and commercial projects. I also like Charles and Calvert counties, which contain growth corridors along the Chesapeake Bay. For recreational/vacation properties, Deep Creek Lake in Garrett County presents opportunities.

Does undeveloped land usually increase in value over time?

In general, yes - plots of raw land should gain value over 5-10 year hold periods based on surrounding community growth and inflationary impacts. Maryland's rising population indicates steady long term appreciation. However, economic shifts can affect pricing year-to-year. Proper due diligence mitigates risks.

What monthly expenses come with owning vacant land?

Typical costs include property taxes, land maintenance fees, liability insurance premiums, HOA dues if applicable, and minor management overhead. Budget about 1-2% of the property value per year. Some owners also finance mineral rights leases for revenue streams during the hold period.

What risks should I watch out for?

Be vigilant about illegal trespassing, hazardous material dumping, and squatting since vacant land sits remote and unattended. Also allow for weather events like floods or windstorms that can damage land. It's smart working with a land investment company who monitors and manages the ongoing responsibilities at a professional scale.

How liquid is the land market if I need to sell?

Marketing land takes patience and persistence, so don't expect to flip land overnight. On average it takes 1-2 years to sell for properties listed fairly and priced according to comparables. The positive news is consistent demand from developers, farmers, miners and individual buyers ready to make offers. List with a land broker who networks with these specialty buyers.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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