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Land Investing Risks & How to Mitigate Them

6 minutesLast updated: February 2026
RiskDescriptionMitigation
Title IssuesHidden liens, mortgages, judgments that survive the tax deed.
  • Always run a title search before bidding.
  • Consider title insurance (though some companies won't insure tax deeds until you quiet title).
  • Be aware that some government liens (code enforcement, environmental) may survive.
Environmental ContaminationSoil or groundwater contamination requiring expensive cleanup.
  • Conduct a Phase I Environmental Site Assessment if there's any suspicion (former industrial, agricultural use).
  • Check historical aerial photos (Google Earth).
  • Avoid properties with obvious red flags.
Zoning and Land UseProperty not buildable due to zoning, wetlands, or floodplain.
  • Verify zoning before purchase (see Zoning Checklist).
  • Check wetland maps (National Wetlands Inventory).
  • Determine flood zone (FEMA); if in floodplain, factor in elevation costs.
Access IssuesNo legal road access; landlocked property.
  • Verify deeded access via recorded easement or public road frontage.
  • Check GIS maps for road lines.
  • If no access, do not buy unless you can obtain an easement (costly and uncertain).
Occupied PropertySquatters, tenants, or owners refusing to leave.
  • Drive by and observe.
  • If occupied, factor in eviction costs ($3,000 – $5,000 and 30-60 days in Florida).
  • Consider cash-for-keys as a faster alternative.
RedemptionOwner pays back taxes after you win, and you lose the property.
  • Understand the specific redemption rules for the county.
  • Wait until the redemption period expires before making plans.
OverbiddingPaying too much, leaving no profit.
  • Set a strict maximum bid based on your ARV and costs.
  • Stick to it, no matter the auction excitement.
Holding CostsProperty taxes, insurance, and maintenance add up.
  • Include holding costs in your financial analysis.
  • Have an exit strategy ready (sell, develop, or rent).
Due Diligence GapsMissing a critical issue because you didn't check thoroughly.
  • Use our checklists (Zoning, Utilities).
  • Never skip steps, even if you're excited about a deal.

Remember

The biggest risk in land investing is not doing your homework. Take the time to run through these checklists, and you'll avoid the most common pitfalls that trip up new investors.

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