Is buying and owning land in Rhode Island an ideal investment choice? Does it carry a high rate of return on investment (ROI)? We have the answers.
Is it worth it to invest in land in Rhode Island? What are the benefits and limitations of owning land in Rhode Island? What risks should you consider before buying and owning land in Rhode Island?
The profit of buying and owning land in Rhode Island are land accessibility, land value, and promising returns on initial investments. The limitations of purchasing and owning land in Rhode Island are the low economy, the high cost of buying land, and no quick way of earning money.
This article will take a closer look at whether buying and owning land in Rhode Island is a good investment choice and the advantages and disadvantages of owning land in that state. It will also explore the risks you should consider before buying your land in Rhode Island. Therefore, if you decide to purchase and own land in Rhode Island but are wondering if it's a good investment choice, we will guide you on this.
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Table of Contents
Rhode Island comprises people from different diversities in terms of culture and race. It has a population of about 1.9 million people, and the land has about 776,960 acres. Rhode Island features landmarks such as mountains with abundant trees and various kinds of plantations on the lowlands. It has water resources such as rivers and lakes that navigate around Rhode Island at a distance of around 20,000 acres of fresh water. 75% of these lakes are artificial, and the others that are formed naturally account for 25%.
Besides having beautiful sceneries and abundant natural resources, Rhode Island has many educational centers, such as Portsmouth High School, Environmental Education Center, Providence College, and Westerly University, which offer quality education. The people in Rhode Island are warm and welcoming, and the government and the local government ensure that the transport and communication network is expansive. Rhode Island is one of the smallest states in the US and is ranked 2nd in population density.
The Pros of Owning Land in Rhode Island
Regarding buying and owning land, Rhode Island is a suitable land investment place. The following are the pros of owning land In Rhode Island.
Land Accessibility to Utilities
According to the American County Office Organization, Rhode Island has around 21 utility organizations that ensure access to utilities such as electricity, water, and roads. They ensure that at least one utility reaches 50,000 people every 50 square miles of land. Therefore, when you buy land in Rhode Island, you are assured that you will access essential and other utilities that help you access your land and develop it. There is no extra cash you require to create alternative utilities. Additionally, since Rhode Island is a small state, access to your land is easy because you do not have to travel a long distance to access it.
Promising Return on Investment
The good thing about investing in land in Rhode Island is that you can use the land for any activity you wish as long as it aligns with the rules and regulations of the state authorities and the zoning laws. Below are some actions you can choose to execute when you buy and own land in Rhode Island.
Selling the Land
Through land flipping, you buy land at an affordable price and then sell it at a price higher than the amount you used to purchase the land parcel. Additionally, you can buy lands at different places around Rhode Island and sell them either as a whole or divided into small portions to maximize your earnings.
Developing and Selling the Land
After you buy land in Rhode Island, you can develop it by building residential homes and renting them out to interested tenants. You can also make commercial properties such as shops, car garages, and parking lots that provide a source of income for you. To be precise, you have a lot of alternative activities you can choose from as long as you can make profits. Eventually, the local zoning laws guide you on what kind of development activity you can do and if the amount of money you have is enough to cater to the project.
Buying Land and Farming
Agriculture is the backbone of Rhode Island’s economy, where the farming areas cover at least 10 % of the state, around 70,000 acres of land. The primary commodities produced in Rhode Island are dairy products, sweet corn, and apples. Additionally, since there is access to water bodies, aquaculture is also a source of income where fishers sell fish and oysters to get earnings. In addition, the weather and land fertility also play a crucial role since it provides necessities like water for farming and nutrients needed for plant nourishment and growth. Besides crop farming, the environment is favorable for livestock keeping.
Buying Land for Settlement
When you buy and own land in Rhode Island, you can construct your home, which comes with an advantage because you have the privilege to build the type of house you want based on taste and preference. The benefit of building your home compared to buying an already made house is that you can customize the size and design of your house well, while when you buy a home, there is limited customization due to lack of enough space on the land and other factors. Buying vacant land to build a house gives you a plan on how you can create your home where you can add extra features such as playgrounds and a swimming pool.
Renting Out the Land
If you do not want to sell the land, you can rent it to interested lenders in Rhode Island to earn an income. Before you rent the land for farming purposes, ensure you know how to calculate the value of the land and monitor its condition to avoid problems such as loose soil and landfills. Additionally, ensure that you rent out your land formally through documents such as contracts so that the agreement becomes legal. You also need to ensure that you get a liability insurance cover that safeguards your investments on the land and keeps you from potential liability exposure.
The Value of the Land
When you purchase land in Rhode Island, it appreciates depending on the economy and rate of development in that state. Since the economy of Rhode Island is stable, and the growth rate is increasing, you should consider buying land in Rhode Island. You can sell the land later at a higher price to make a profit.
Buying Land, Rezoning, Developing, and Selling
You can decide to purchase land in Rhode Island and then take it to a zoning process to give it alternative use. For instance, if the land is zoned for residential use only but due to development, you feel like the area requires a commercial property. You have the right to change it for commercial use by rezoning it in Rhode Island. After re-zoning, you can develop it for commercial purposes and sell that property to make a profit.
The Cons of Owning Land in Rhode Island
Unquestionably, buying and owning land in Rhode Island is a good investment opportunity. However, investing in land in Rhode Island can have some restrictions you need to be familiar with before considering investing in a land parcel in Rhode Island. Below are some of the cons of owning land in Rhode Island.
High Cost of Land
When comparing the land prices in other states with Rhode Island, Rhode Island's lands are expensive. According to a survey done by a land watch, the average value of land costs from $95,000 to $130,000. The land is expensive in Rhode Island because the population of people is high and the land size is limited. Since there is high demand for land in Rhode Island, the cost also rises. Therefore, if you consider buying land for real estate projects in Rhode Island, ensure you have enough funds. You must be in a position to pay for the cost of land and the associated cost. In such large transactions, it is advisable if you fire a lawyer to secure your interests.
Risks to Consider Before Buying and Owning Land in Rhode Island
Having looked at the benefits and the limitations of purchasing and owning land in Rhode Island, you can now decide whether an investment is a good investment choice in Rhode Island. Moreover, there are some risks you need to consider before buying and owning land in Rhode Island. Here are some of the risks.
Every place around Rhode Island has a different way of utilizing the land. The use can be categorized into agricultural, residential, historical, commercial, and mixed-use. Before buying land in Rhode Island, ensure you have identified how you can utilize the ground according to the zoning laws. If the zoning laws state that you can only use your land for commercial purposes, you should use it for commercial purposes only.
Nevertheless, if you want to convert the zoning of the land, you can apply for a reclassification that depends on the area's development. You need to file a petition in the state, and if the state allows you to rezone the land, you need to give out a proposal of the development activity you want to do on the land parcel. You need to appear for an open session where the state board council will determine if your proposal makes sense and if the land fits that development activity.
Before you own land in Rhode Island, you need to consider the size of the activity you can be permitted to build. For instance, if you are building structures for commercial use, some zoning considerations are required, such as the ratio between the land and the building or the facility's height. Other requirements are the setback code that assesses the distance between your land and the neighboring land or property and the lot handling code that helps flood prevention.
Before buying and owning land in Rhode Island, you should check if the ground can handle the kind of activity you want. It is essential to ensure that you check the underground area of the land parcel for there might be dangerous compounds such as carcinogens that may harm you. In addition, you should check if the land lies in a flood zone so that flooding does not occur as you start your project, flooding does not occur.
Access to Utilities
Ensure you can easily access water, electricity, sewer system, and telephone, among other utilities, before you buy and own land in Rhode Island. If you consider buying land that has no access to the sewer system, you can hire a land expert to test the soil and assess if the land is fit for an onsite sewer system. Rural areas have a big challenge when it comes to utilities.
When you own land in Rhode Island, you should know that the land has no resources you can sell to generate income. If you do not have extra money, you can get a loan or sell a portion of the land. This is because you require cash to maintain the land through activities such as removing weeds and mowing grass.
Wrapping it Up
Buying and owning land in Rhode Island can benefit you if you purchase land for settlement or building commercial or residential properties to be a source of income. However, due to the high land cost, real estate projects may become challenging since many clients prefer affordable properties. Additionally, before you own land in Rhode Island, ensure you understand the risks involved.
About THE AUTHOR
Brittany has been in the land business since 2020 when the world was starting to shut down. Since then, we’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans mostly in the western United States. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.Read More About Brittany Melling