Can Investing In Land Grow Your Wealth? - Vacant Land USA
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Can Investing In Land Grow Your Wealth?

Investing in land has been a significant part of human history for centuries. Even now, land investing is a great way to secure your future and grow your wealth over time.

If you have ever studied history, you will remember that many wars have been fought over land!

Land is a valuable commodity and a scare resource that can provide residual passive income and valuable appreciation depending on which investment strategy you choose to use.

Full disclosure: we are NOT financial advisors. Invest at your own risk. This article is not an inducement to buy land, but is an educational discussion about investing in land. Always do your own due diligence and seek your own professional advice if needed.

Who should invest in land?

Anyone can invest in raw land and in our opinion, everyone should own some land.

People who purchase vacant land include:

Home owners

Farmers

Hunters

Property developers

Recreational enthusiasts- people who love camping, atvs, off grid living

Businesses- like self storage business, warehouses, outdoor recreation, schools

If you are looking to profit from land investing, always be on the look out for trends occurring around you so that you are in a position to provide people what they are looking for. 

For example, there has been a recent trend of people moving out of crowded cities to rural areas in search of more space, more independence, cheaper housing and better lifestyles. 

Being aware of what these people will need may provide you will opportunities to provide them with land for their homes or businesses. 

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Or you may choose to invest for yourself and your family- a parcel of land that you will use for your home, your hobby farm or your own recreation.

Or you may choose to speculate on other opportunities you find in your local area.

For example, you may notice a vacant lot near where you live. Perhaps you know that the owner is no longer be interested in developing it now. You could do some research, work out fair value and make them an offer.

If you are successful in owning this property, you could do some work on it yourself or sell it on to a developer.

Or perhaps you vacation in the Ozarks every year. You may notice the area becoming increasingly popular. You may believe that owning land around here will be a good bet over the next 10 years. 

You seek out vacant land, purchase it, clean it up, add a driveway and a cute fence. After five years, perhaps prices for land in this area rocket up. You put it on the market and sell it for a nice profit.

These are just some ideas. There are multiple great reasons to own land.

Many, many billionaires own vast acreages as it's a fantastic way to hold wealth and keep it in the family. But there is nothing to stop the rest of us, owning a gorgeous 5-10acre lot and enjoying our own personal empire!

Why invest in land?

Land is a hard asset. It is a scare resource. They are not making any more of it! Land tends to do well in periods of high inflation.

In addition it can be a cheaper, easier way to get started in real estate investing.

Land sold for as little as $100 to many millions of dollars.

If you are able to buy with cash, there is less complexity with financing, lenders, appraisals and risk. Though depending on the land itself, you may be able to secure a loan.

If you do not think you will qualify for a bank loan, you can request the seller consider owner financing.

Effectively the seller will become the bank and you will pay the seller over time.

Some sellers will consider selling this way. Others will not.

Other advantages of investing in land is that there is very little maintenance to be done and property taxes are very low.

Should Market Conditions Be A Deciding Factor In Land Investing?

Rather than waiting for market conditions "to be right", it is better to consider the golden rules that apply to all real estate investments.

1) Location, location, location!

  • Whilst the macro conditions may be a factor in land investing for some people, for most of us, it is the local market that is the most important.
  • Is your area seeing an influx of people needing homes and services?
  • Is your area within 2 hours of a major metro where city dwellers may look to have a camping ground outside the city?
  • Is the city starting to expand into the outskirts?
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2) Purpose of the real estate investment

Are you buying for a short term flip?

Are you buying in the “path of growth?”

Are you buying for premier farming soil?

Are you buying to draw a long term passive income from a self storage warehouse or a farming operation?

Common misconceptions when investing in land

Here are 3 common misconceptions that people have when considering land investing:

1. It is boring

Boring is good when it comes to investing!

Whilst you might like to have 3-5% of your portfolio in cryptocurrencies for the wild rollercoaster ride, it is wise to have some of your net worth in a stable asset that has proven itself over centuries to be a reliable investment.

Once you own land, you have security. You always have somewhere to live, you can grow your own food. It will go up with inflation.

Every year it is becoming a more scarce asset which contributes to price appreciation.

2. It is not income producing

There are many types of land that do produce income.

If you are looking for income producing land, there are many opportunities to look for land that supports vineyards, livestock, crops, orchards, commercial businesses and outdoor recreational businesses.

There are many lease arrangements that you could strike with farmers, with self storage businesses, with outdoor recreation businesses, with local counties who need the extra space from time to time. 

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