I Made a Big Profit by Accidentally Investing in Vacant Land. Here's Why I Won't Try to Do It Again

Several years ago, I bought land to build a house on. At the time, I couldn't find a house to buy, and I wanted to customize my own property. I paid cash for the land without getting a mortgage, and I waited to find the perfect builder.

Circumstances changed, though, and I decided to move into a different neighborhood because it turned out the location where I had bought the land was in the middle of a traffic nightmare. I listed it for sale and I ended up making a pretty decent profit, selling it for tens of thousands of dollars more than I had paid just a few years after buying it.

Despite making a good profit on the deal, I wouldn't do this again. Here's why.

It's hard to sell vacant land, and it takes a long time

One of the biggest issues that would prevent me from trying to invest in vacant land and hoping to resell it for a profit is that the land market is a tough one.

When I told my real estate agent I wanted to sell, she warned me that I was likely going to be waiting months or even years for a buyer. The reality is, there's generally less demand for vacant land compared with houses that are already built. Since the market is a lot less active, it can take a much longer time to find someone who wants your particular piece of property.

It can also be harder to market the property. After all, with a house, there are a lot of different features that could attract a potential buyer, like a pretty kitchen or a nice layout. With a plot of land, there's much less differentiating one vacant space from another.

It did end up taking several months to find a buyer for our lot. We were lucky because our lot did happen to have a small private pond on it that set it apart from others, which opened the door to finding a buyer faster than we otherwise would have experienced.

I wouldn't want to go through this stressful waiting period again, or be left sitting around hoping I could find someone interested. If you're thinking about investing in vacant land, you should also be aware you may have to hold it for quite a while before you find someone interested. You can research the average time it takes lots to sell in your area to get an idea of what delay you might face when you're ready to cash in on your investment.

There's a lot of upkeep and effort involved in investing in land

There was another issue as well: Taking care of land takes time and effort. Our lot was wooded, so we didn't have to do too much mowing or upkeep, but we did have to do some. And if you buy a plot of land that isn't covered with trees, you'll typically have to keep it mowed and looking nice -- both so it's attractive to buyers and so you don't get into trouble with the county for violating any ordinances.

Unless you want a hands-on investment that you have to take care of, you may want to think twice about buying vacant land. There are easier things to invest in, including simply putting your cash into a brokerage account and choosing a completely hands-off index fund that you never have to think about.

Ultimately, you'll need to decide what types of investments are right for your personal finances. But as someone who accidentally made a successful land investment, I think it's important to be realistic about what this kind of investing entails before you jump in.