Empty Lots for Investment

[Michael Temple]

I occasionally see listings for empty lots in a subdivision pop up for sale. Sometimes they are very expensive, i.e. $50K and other times they are reasonable, i.e. $19K. I am only talking about lots in nice up and coming sub-divisions here. I was wondering if anyone has bought these for investment and if so what was your experience?

My initial gut feeling is I am tying up capital in an asset that pays no rent each month and requires I feed it with property tax payments each year, which would make it a bad way to use capital. However, I am wondering if you did it right if you could flip it to a homeowner when building lots are running low and make a good return.

What are your thoughts?