[et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”0px||||false|false” da_disable_devices=”off|off|off” global_colors_info=”{}” custom_margin__hover_enabled=”off|desktop” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” width=”95%” max_width=”100%” custom_margin=”||-24px||false|false” custom_padding=”55px||||false|false” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_breadcrumb _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_breadcrumb-link title=”Real Estate 101″ _builder_version=”4.18.0″ _dynamic_attributes=”link_option_url” _module_preset=”default” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjcyMiJ9fQ==@” global_colors_info=”{}”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”Buy” _builder_version=”4.18.0″ _dynamic_attributes=”link_option_url” _module_preset=”default” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjE2MzIifX0=@” global_colors_info=”{}”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IiIsImFmdGVyIjoiIn19@” _builder_version=”4.18.0″ _dynamic_attributes=”title” _module_preset=”default” module_text_color=”#686E6E” global_colors_info=”{}”][\/wahi_breadcrumb-link][\/wahi_breadcrumb][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _dynamic_attributes=”content” _module_preset=”default” header_font_size=”3.5rem” header_line_height=”4.5rem” header_font_size_tablet=”42px” header_font_size_phone=”3rem” header_font_size_last_edited=”on|phone” header_line_height_tablet=”4.5rem” header_line_height_phone=”3.2rem” header_line_height_last_edited=”on|desktop” global_colors_info=”{}”]@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IjxoMT4iLCJhZnRlciI6IjwvaDE+In19@[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”3px||3px|||” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][wahi_socialsharing _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][\/wahi_socialsharing][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”24px” text_line_height=”1.5em” custom_margin=”||12px|||” hover_enabled=”0″ global_colors_info=”{}” sticky_enabled=”0″]<\/p>\n
Buying land as an investment can offer long-term growth potential, but financing and other factors can affect whether it pays off. Here\u2019s what to know about financing, zoning, costs, appreciation potential and the risks of investing in vacant land.<\/span><\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”1.13rem” text_line_height=”1.18rem” custom_margin=”||7px|||” global_colors_info=”{}”]<\/p>\n By Emma Caplan-Fisher<\/a> | 8 minute read<\/p>\n [\/et_pb_text][et_pb_post_title title=”off” author=”off” date_format=”M j” categories=”off” comments=”off” featured_image=”off” _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_post_title][et_pb_image src=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9mZWF0dXJlZF9pbWFnZSIsInNldHRpbmdzIjp7fX0=@” align=”center” force_fullwidth=”on” _builder_version=”4.18.0″ _dynamic_attributes=”src” _module_preset=”default” custom_padding=”40px|||||” border_radii=”on|32px|32px|32px|32px” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” global_colors_info=”{}”]<\/p>\n Unlike a house or condo, a vacant lot doesn’t come with a roof to replace, a furnace to service or tenants to manage. That simplicity is part of the appeal of buying land as an investment: the potential for long-term appreciation without the day-to-day upkeep of a traditional property.<\/span><\/p>\n \u00a0<\/span><\/p>\n But land also comes with real downsides, including limited cash flow, trickier financing and carrying costs that add up even when nothing is happening on the property. So is buying land a good investment? The answer depends heavily on the type of land, the buyer’s timeline and how, exactly, that land is expected to eventually pay off.<\/span><\/p>\n –<\/span><\/p>\n Land can appreciate meaningfully, particularly in regions where population growth and development pressure are pushing outward. Immigration-driven population growth has long been one of the biggest forces behind Canadian housing demand, and that same pressure tends to ripple out into the land surrounding fast-growing cities, according to <\/span>federal research<\/span><\/a>.<\/span><\/p>\n \u00a0<\/span><\/p>\n The catch is that vacant land typically doesn’t <\/span>generate income<\/span><\/a> while an owner waits for that appreciation to materialize. There’s no rent cheque coming in to offset property taxes or financing costs, which means the investment has to be justified entirely by a future sale, a future build or a future change in how the land can be used.<\/span><\/p>\n \u00a0<\/span><\/p>\n Whether that’s a good trade-off depends on location, purchase price, current zoning and the strength of future demand in the area, all of which vary enormously from one parcel to the next. Buyers weighing land against other options need a clear strategy for how a property will eventually generate a return.<\/span><\/p>\n <\/p>\n –\u00a0<\/span><\/p>\n Not all land investments carry the same risks, costs or opportunities, so it’s important to consider what each type can offer:<\/span><\/p>\n \u00a0<\/span><\/p>\n Residential lots<\/b> in zoned, serviced subdivisions have utility lines already connected, and buyers pay for that convenience: <\/span>serviced land<\/span><\/a> carries the lowest development costs but the highest purchase price among Ontario land types.<\/span><\/p>\n \u00a0<\/span><\/p>\n Raw or undeveloped land<\/b> sits at the <\/span>opposite end<\/span><\/a>, with the lowest purchase price but the highest <\/span>development costs<\/span><\/a>, since it’s typically remote and lacks road access, utilities or confirmed zoning that a buyer would otherwise have to add themselves.\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n Agricultural land<\/b> has been one of the steadier performers in the Canadian market. The average value of cultivated farmland across the country rose 9.3 per cent in 2025, extending a climb that <\/span>Farm Credit Canada<\/span><\/a> says has continued for more than three decades, though gains vary widely by province and were far more modest in Ontario and Quebec than on the Prairies.<\/span><\/p>\n \u00a0<\/span><\/p>\n Recreational land<\/b>, such as waterfront or cottage-country lots, tends to be driven more by lifestyle demand than by development potential. Ontario’s Muskoka region, roughly <\/span>215 km<\/span><\/a> north of Toronto, <\/span>illustrates the pull<\/span><\/a>: second homes now make up about 47 per cent of all households in the district, adding a seasonal population of more than 84,000 people on top of a year-round population of about 66,700.\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n Commercial or industrial land<\/b> carries higher entry costs but can offer income potential once leased or developed, along with a more complex process, since some municipalities require <\/span>formal site plan approval<\/span><\/a> before commercial or industrial construction can begin.<\/span><\/p>\n <\/p>\n <\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” background_color=”#edf7f3″ da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” header_2_text_align=”center” header_2_text_color=”#38505b” header_2_font_size=”2.63rem” header_2_line_height=”3.75rem” max_width=”800px” module_alignment=”center” header_2_font_size_tablet=”32px” header_2_font_size_phone=”27px” header_2_font_size_last_edited=”on|phone” header_2_line_height_tablet=”3.75rem” header_2_line_height_phone=”32px” header_2_line_height_last_edited=”on|phone” global_colors_info=”{}”]<\/p>\n [\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.18.0″ _module_preset=”default” da_disable_devices=”off|off|off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}”][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” global_colors_info=”{}”]<\/p>\n Location matters<\/span><\/a>, but <\/span>future<\/span><\/i> location often matters more. For example, a parcel on the edge of a growing city can be worth relatively little until population growth, new transit lines or a highway extension bring it within commuting distance of jobs and services. Nearby commercial development, such as a new retail plaza or business park, can lift surrounding land values simply by making the area more convenient to live near.<\/span><\/p>\n \u00a0<\/span><\/p>\n Zoning changes are one of the single biggest value drivers, since land zoned for higher-density housing or commercial use is almost always worth more than the same parcel zoned for a single detached home or left as agricultural. And the effect can be dramatic: after Edmonton eliminated single-family-only zoning, allowing up to eight units on lots that were previously one-home only, land values reportedly <\/span>rose by 15 to 30 per cent<\/span><\/a>.<\/span><\/p>\n \u00a0<\/span><\/p>\n Access to municipal services like water, sewer and natural gas also plays a major role: land that requires a buyer to drill a well and install a septic system is a fundamentally different investment than a fully serviced lot, even if the two properties sit side by side.<\/span><\/p>\n <\/span><\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” global_colors_info=”{}”]<\/p>\n Owning a piece of land doesn’t automatically mean a buyer can build whatever they want on it. Before making an offer, it’s worth <\/span>confirming several things<\/span><\/a> to avoid future surprises, stresses and costs:<\/span><\/p>\n \u00a0<\/span><\/p>\n \u2714 Zoning and permitted uses.<\/b> Ontario’s Planning Act<\/span><\/a> gives municipalities the authority to set zoning bylaws that spell out exactly what can be built on a property and where. These rules are worth reviewing directly with the municipality rather than assuming.<\/span><\/p>\n \u2714 Legal road access.<\/b> Some rural parcels only have access across a neighbour’s property or an unmaintained road allowance, and municipalities <\/span>hold power<\/span><\/a> over whether and how those allowances can be developed or assumed for maintenance, which can complicate financing and future development.<\/span><\/p>\n \u2714 Water, sewer and utilities.<\/b> Land without municipal services may require a well, septic system or hydro extension, all of which can add high upfront costs.<\/span><\/p>\n \u2714 Environmental restrictions.<\/b> Land near things like a river, wetland or shoreline may fall under a <\/span>conservation authority’s jurisdiction<\/span><\/a>, meaning a permit is required before any development, interference with a wetland or alteration to a watercourse can happen.<\/span><\/p>\n \u2714 Easements and property boundaries.<\/b> A registered easement can give a utility company, neighbour or municipality the right to use part of the land, which <\/span>may limit<\/span><\/a> where a structure can be placed. Having a recent land survey helps to confirm that lot lines match what’s in the listing, particularly on older rural parcels.<\/span><\/p>\n \u2714 Future municipal development plans.<\/b> A <\/span>municipality’s official plan<\/span><\/a> lays out its long-term vision for how land in the area should be used, and it’s worth checking whether nearby land is slated for <\/span>things like rezoning<\/span><\/a>, new infrastructure or protected green space.<\/span><\/p>\n <\/p>\n <\/span><\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” global_colors_info=”{}”]<\/p>\n Financing a vacant lot works differently than financing a house, and buyers shouldn’t assume their existing mortgage pre-approval applies. Because raw land produces no income and can be harder for a lender to resell if a borrower defaults, <\/span>land loans<\/span><\/a> are considered riskier than conventional mortgages and typically come with higher interest rates and steeper down payment requirements.<\/span><\/p>\n \u00a0<\/span><\/p>\n Down payments on land in Canada commonly range from <\/span>20 to 50 per cent<\/span><\/a>, with raw or rural land often landing at the higher end of that range and serviced lots requiring less. Whether land is serviced or undeveloped significantly affects the terms a lender will offer.\u00a0<\/span><\/p>\n \u00a0<\/span><\/p>\n And buyers who plan to build will typically need a separate construction mortgage once they’re ready to break ground, since a land loan on its own usually doesn’t cover the cost of construction.<\/span><\/p>\n <\/p>\n <\/span><\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.18.0″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” global_colors_info=”{}”]<\/p>\nIs Buying Land a Good Investment?<\/h2>\n
What Types of Land You Can Invest In?<\/h2>\n
\u201cLand can appreciate meaningfully, particularly in regions where population growth and development pressure are pushing outward.\u201d<\/b><\/h2>\n
What Makes Land Increase in Value?<\/strong><\/h2>\n
What to Look for Before Buying Land<\/strong><\/h2>\n
How to Finance Vacant Land
<\/strong><\/h2>\nWhat it Costs to Own Land
<\/strong><\/h2>\n