It has been my experience that foreign investors seem to be very cautious when it comes to investing in Arizona. They seem to go with the times and invest in the “next best thing”. I sometimes ask myself why in the heck anyone would invest in this type of property or that type of property when I see certain deals come across my desk. Sure enough they always make money.
Canadian buyers seem to be very focused on buying the bank owned properties right now. They have a buy and hold strategy that works because typically they pay in cash and are very detailed oriented. Australian buyers purchase through retail through their Real Estate Agent. They will pay just about anything if they find the perfect second home they are looking for. The investors from Dubai like to find a U.S. partner to help them buy at auction. They often buy multiple properties and also refer their family and friends. The Asian investors are all business and have had a very hard time investing in their own countries due to government restrictions.
Lately I have been seeing quite a few buyers purchasing vacant land. This is another curious thing for me right now because you would not think it is a great time to buy land. Asian investors have great interest in this area of the market. Unlike the rest of the global investors who are coming in to buy just as we do; at the auction, from the bank, or with an agent, the Asian investors come in alone. They are very savvy and they know exactly what they want… land.
The land contract is different from the residential contract and will have different due diligence needs than a residential property. First you may or may not have a known legal description for the property so a survey may be required from your Title Company. The survey is typically the responsibility of the seller to purchase so a valid legal description can be determined. Often times, vacant land is not so vacant. There may be a small house, cabin or mobile home sitting on the land that was built or placed there by previous owners or squatters. There may be no indication of the structure on the plat map so generally you will see your prelim require an inspection of said land to determine if it is in fact vacant. This inspection costs about $100.00. If a structure is found on the property, the contract will have to be amended to address the existence of the unknown structure and determine who will be responsible for its disposal or condition. If a mobile home is found, we will need to determine who will be responsible for affixing it to or removing it from the property. Another concern with a mobile home is whether it has already been affixed. If it has, there may be personal property taxes due and those will need to be paid. If it is not affixed then the title to the mobile home, which is typically handled much like a motor vehicle, must be addressed.
The investor who wants little or no upkeep, buying land is a great option. They are just looking for an investment that they can sit on and earn value over the years. Land is a true investment for the long haul. In our market we are seeing lots of “old school” investing and buying land is one of the oldest in the book.
Remember, Chicago Title is here to help with anything you need and we are just a phone call away!
By: DiAnna Jackman
Senior Escrow Officer/Branch Manager
Chicago Title Insurance Company