Jumping into Malibu land as an investment or long-term financial strategy is a big step. You will be well-served by taking some time to understand how the real estate market actually works, the liabilities, the risks, and the rules as well.
Malibu, for the obvious reason of being a coastal town near Los Angeles, has always been in extreme demand, even during poor real estate selling seasons. As a result, there are all types of properties available from single homes, to mansions to commercial and rental properties as well.
That in turn leaves room for both big opportunities as well as the potential for painful pitfalls too.
Here are some big tips that have proven to produce returns for starting investors buying Malibu land in the area, especially given the amount of capital needed to get into the market in the first place:
Get Educated
Anyone thinking about buying Malibu land should already have a good grip on how the real estate market works in general, from selling practices to real estate law.
These topics are easy to pick up, and folks can get quite a good education for very little cost through online classes at most community colleges these days if a fast guidebook read is not enough.
Buy Rental Property
Consider buying a rental property as your first investment. Some of the big benefits of this approach are realized right up front: you start to see a return on your expense through rental revenues right away.
This approach does take a different strategy as you or a proxy will need to be active in the role of a property manager. However, instead of waiting for the market to return a profit margin a few years ahead, a rental property begins paying back right away. That is on top of the sales markup possible when the entire property is sold again in the future.
Keep in mind, this is an approach where you clearly need to have a good understanding of how property management works before getting into a rental ownership purchase.
Spread the Risk
Partnership purchases are clearly a mathematical way to spread the risk on a parcel of Malibu land, given the prices of some offerings. That also means, however, that the profit will be spread among partners as well, making for less of a return.
Yet for a beginner investor, this may be a far better approach, not putting all your initial capital eggs in one basket to get started. And for more experienced partners, a junior partner taking on some of the cost lowers their expenses as well, so it can be a win-win.
Research, market evaluation, and buying the right property all count significantly to realize good returns on this approach, and you will need partnership agreement on when to buy, when to improve and when to sell. So make sure the partnership is with someone whom you can get along with in business, not just socially.
Pick Less-regulated Malibu Land
Beachfront Malibu land for sale is typically the most attractive purchase type but it is also the most regulated and often has the most ownership issues. Go a few blocks in and you can find some good starter purchase opportunities with far less headaches. That means quicker liquidation and profit when it comes time to sell.
In Summary
Before you jump in to make a Malibu land purchase, it is best to educate yourself about the Malibu real estate market, and how real estate transactions work. Also, test the waters by buying a rental property first. When you’re ready, spread the risk by taking on partners, and choose less regulated properties.
