Do I need to Consider Cost of Land (per acre) When Looking for a Good Deal?

[Austin Prewett]

Hey All,

Rookie investor here, and I'm looking at different properties for the best deal. I've done my fair share of research into good 'rules of thumb', but not any that consider the cost of land in the area. I've heard that looking at the average cost per acre versus the cost of the property can be a good indicator of whether you want to invest in repairs versus teardown. But are there any good 'rules of thumb' behind this principle? Like...If a property's cost per acre is [blank] higher than the cost per acre for the area then stay away.

Any advice is appreciated!

[Chris Seveney]

@Austin Prewett

For a rookie investor, I would not recommend a property that needs a heavy rehab or a property that is a tear down. Start with something that needs light to no rehab, get a tenant in there and understand how to manage a property and the true cost of ownership.

Invest for the long term and learn along the way. Just my 2 cents

To answer the question if it’s a tear down you need to understand the comps In That area and the cost to remove the existing and rebuild - where many go wrong with rebuilds is they assume best case construction and holding times and time is money especially if using a construction loan.