While You Wait – Land Bank
Let’s say you own vacant retail land in the form of a corner lot that one day would make a good spot for a Walgreens, a Chase Bank or an office building.
However, let’s say that it is not big enough on its own to develop (you would need to assemble the site next door and the owner isn’t ready to sell), the timing isn’t quite right yet, or you don’t have the capital required or you feel that it is too risky to develop by yourself.
In the meantime, you would rather earn some money to pay the property taxes and perhaps even earn a small profit while you wait. Some of these ideas would apply even if the lot was developed (with a convenience store or shopping center for instance) but with some excess land.
10+ Land Banking Ideas
Here are a few ideas to generate income while you hold the lot:
• Christmas Tree Lot – lease the lot to a company that sell’s Christmas trees. The lease is probably only going to be for November through December, which allows you time to find other ways to earn money from your lot. In addition to Christmas trees, the vendor might sell wreaths, garlands, stands and other Christmas decorations.
• Water and Ice Vending Machines – you have probably seen drive-up vending machines from companies like Watermill Express and Ice House America where people get large bags of ice or water for a few bucks. What you might not realize is that some of these machines cost over $100K installed. The ice machines are owned by private operators that are going to require several year leases (or to be bought out if you develop the land before some minimum time frame).
• Food Trucks – trendy food trucks have been popping up all over America, especially in trendy cities like Los Angeles and Austin. While some move around, others are permanently or semi-permanently parked at one location. One property owner decided to start a food truck park with rents starting at $499/month. Other food trucks are parked on a permanent basis in convenience store parking lots.
• Truck Parking – on a lot across from a hotel in Brawley, California, the owner was offered $400 per month to offer parking for large tractor trailers. The owner of the hotel had a contract with a trucking company to offer rooms the their drivers; they needed a place to park their trucks.
• Event Parking – if the lot is near a sports or event venue, you may be able to charge $5 to $20 or more for parking. You could operate the lot yourself or just get a cut of the profits from someone else.
• Modular Buildings and Shipping Containers – a temporary structure can serve as a permanent office for an insurance agency, check cashing company, temporary bank branch and a whole variety of other uses. You might be able to find the building on the cheap at a government surplus auction, or you may just lease the land and let the tenant handle the building, all permits and approvals.
• Caboose – one restaurant lot in Atlanta also has a watch shop inside an old caboose on the edge of the lot. The caboose, rail and cross-ties were no longer in use. This made for an environmentally friendly re-use.
• Outdoor Billboards – finding a lot that will qualify for an off-premise sign (outdoor billboard) is like finding a needle in a haystack. That being said, the income that billboard companies pay can be substantial if the sign has excellent visibility to a busy street or highway.
• Cell Phone Tower – cell phone companies place towers all over America in locations that ensure clear cell phone connections for their customers. Many tower companies place several or all of the major cell phone carriers on the same tower. Other towers are located atop outdoor billboards, allowing for a 2nd income stream from the same lot.
• Fireworks Tent – in states and municipalities where fireworks are legal, you see fireworks tents pop up around the 4th of July and New Years in shopping center parking lots and other vacant lots.
Feel free to share any other ideas you have to generate income for vacant retail land with us by posting a comment below!