3 Tips To Help Understand the Concept of Raw Land

Raw land, also known as undeveloped land, refers to natural land that has been untouched or unaltered by development. As you may know, a lack of essential amenities such as roads, electricity, water supply, and sewer systems distinguishes this type of land. Typically located in rural areas and accessible via county roads, this undeveloped land […]
Matias Daroch  |    |  

Raw land, also known as undeveloped land, refers to natural land that has been untouched or unaltered by development. As you may know, a lack of essential amenities such as roads, electricity, water supply, and sewer systems distinguishes this type of land. Typically located in rural areas and accessible via county roads, this undeveloped land offers a canvas for various potential uses. Our developer colleagues love the appeal of undeveloped land because of its potential for appreciation, driven by limited supply and the increasing demand for such pristine environments.

Investing in raw land can be a rewarding venture, but feasibility is everything. We’ve seen major commercial projects get scrapped way too late in the process because they failed to look at soil reports.

Soil reports!

Feasibility is everything which is why working with a professional architectural firm like ours, early on in the process, is essential. Such a partnership will allow you to get a feasibility study and design consultation to ensure the land and intended use are worth the investment, time, and effort.

Scroll down for more about raw, undeveloped land, and what that might mean for your next venture.

1. Gain a complete understanding of the idea of raw land.

An image of raw land that has been unaltered by development

Before investing in undeveloped land, you need to thoroughly understand what it entails. So, let’s start at the very beginning: what is raw land? Raw land refers to a plot of land devoid of buildings and public utilities, offering a blank canvas for myriad possibilities. The characteristics of this type of land vary based on factors such as location, size, and terrain. Some land may provide access to natural resources like water, minerals, and timber, while others may be isolated or challenging to reach.

Developing raw land can be complex, involving legal, environmental, and construction hurdles. The process includes obtaining permits, adhering to zoning regulations, and establishing essential infrastructure such as roads, utilities, and drainage systems. The difference between raw land and vacant land lies in their development status. Raw land remains untouched, while vacant land has preparatory work done for future development. Vacant land typically lacks physical structures but may have utility access and other amenities present on the property. Understanding the type of land being considered and its potential is necessary for making informed investment decisions.

2. Review the potential pros and cons of investing in raw land.

While investing in raw land can prove to be a lucrative venture, offering the potential for exponential capital growth, you'll want to assess the pros and cons associated with such investments before diving in. One of the key factors to consider is affordability. Raw, undeveloped land generally comes at a lower price point compared to developed properties. By strategically making improvements to enhance the appeal of the land, you stand to reap substantial returns in the long term. However, it's important to understand how to purchase raw land. It can be challenging to secure financing for undeveloped land from traditional lenders due to its relatively niche nature. You will need to do some research and reach out to specialized financial institutions that cater to land loans and offer viable financing options.

The land's utilization and development potential should also be carefully evaluated. Undeveloped land presents many possibilities, ranging from upscale residential communities to versatile mixed-use developments. However, constraints such as land use restrictions and zoning regulations can limit the scope of development options. Addressing issues like landlocked properties that necessitate negotiations for access to essential services and roads is paramount. Additionally, embarking on construction projects on undeveloped land requires obtaining permits and permissions from local authorities, a process that can be costly and time-consuming.

Enlisting the services of a professional architecture firm like ours to conduct a thorough feasibility study is one of the best ways to gauge a property's feasibility and value.

We were developers first. Our expertise fills a crucial market gap between development and final sale - with our process ensuring the investment in land is a sound decision with promising growth potential.

3. Take into account other considerations associated with raw land investment and development.

An image of the land development process

Investing in land can be a solid option when it aligns with your financial goals and performs as expected, yielding the desired returns within your set timeframe. However, the success of a land investment can be tempered if it doesn't appreciate as initially projected. Not all land parcels make good investments, especially those in less desirable locations. Holding onto unwanted real estate or trying to develop undesirable land can become more of a liability than an asset, posing challenges when it comes to selling or liquidating the property.

Before finalizing land investment and development plans, research and understand local anti-development sentiments within the neighboring communities. Being aware of the community's stance can help you make more informed decisions and avoid potential roadblocks to your investment and development goals.

Investing in land, particularly raw land located in undeveloped areas, can indeed be a risky venture. However, when approached with the appropriate insights and meticulous research, it has the potential to yield substantial profits. Understanding the fundamentals of raw land and engaging a professional architectural firm to conduct a comprehensive feasibility study can significantly mitigate risks associated with purchasing and developing raw, undeveloped land. With the right approach and professional support, you can make quality decisions about purchasing and developing raw, undeveloped land.

Curious about the site that’s in your sights (see what we did there)? Drop us a line. We’re on your side and will help you ensure an ideal outcome.

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Matias Daroch

I came to the US as a Chilean Architect and developer wanting to invest in residential projects. Soon, I found myself learning zoning and building codes in-depth, and understanding them better to maximize my return on investment. Not very long after, I began working and studying until I got my architectural license to practice in the US, and founded MIK Architecture to help other developers get more value for their projects.