The key advantage in buying raw land is the relatively high yield you can achieve over the long term. Land, of course, isn't income property unless its farmed, mined, forested, fished, or drilled. To improve the odds of appreciation, you should try to change the character of the land. This can be as simple as getting a zoning variance or as elaborate as building a subdivision, with new roads, utility hookups, and graded landscaping. The land developer's credo is: Buy acres, sell lots. Current conditions in some areas makes this activity less possible than in bygone days. Many places now have strong no-growth interest groups and environmental controls. Sometimes, in building a road, the developer has to account for every tree. Woe to the investor who must negotiate the resting ground of dead people or live birds. You may win zoning approval for changing the permitted use of the land by donating some of it to the township for park or conservation purposes.

The Office of Interstate Land Sales Registration (OILSR) is the HUD unit that administers the law, examines the developer's registration statement, and registers the land sales operator. This office isn't concerned with zoning or land-use planning and has no control over the quality of the subdivision. It doesn't dictate what land can be sold, to whom, and at what price. It cannot act as a purchaser's attorney. But it will help buyers secure rights given to them under the act. The law authorizes HUD to conduct investigations and public hearings, to subpoena witnesses, and to seek court to prevent violations of the law. If necessary, HUD may seek criminal indictments.

To analyze potential investment land, compile a store of statistics about the undeveloped area, including such basics as the value of industrial payrolls and proximity to highways, major markets, and utilities. Get the names of owners from public assessor records, study county plat maps, and review zoning ordinances. Trudge through the swamps and woodlands. Try to anticipate the path of progress. Employment means development, development means demand for land and housing. Buy property in your own area. Never buy sight unseen. Protect yourself in the contract by making your purchase contingent on financing, a clear title, and local approval. When buying land for speculation, keep the land classified as agricultural, if possible. Tax rates are lower. Make sure the zoning of the land matches your plans for its use. You may want the site as a place to park your camper, but zoning laws may forbid that. Determine the water rights before signing the contract. Water that is visible on the land may not belong to the landholder. Have the lot surveyed. Fences don't always indicate legal boundaries. Make sure your land has the right of way to a public roadway. Places to shop for reasonably priced raw land with profit potential include the following:

1. Areas beyond the suburbs but still accessible to major city facilities.

2. Recreational areas within a 2-hour drive of a large city.

3. Commercially zoned real estate near airports, docks, and railroads.

4. Properties already in the process of change and upgrading by others.

5. Property near highway interchanges and on toll way growth corridors.