Why Invest in Land? | Is Buying Land a Good Investment? | Should I Be Investing in Land?
Investing in land and buying land is not a well-understood concept. Most people don’t know for sure how land buying works. And even fewer people understand how investing in land is a smart strategic move for diversifying your portfolio. You don’t want to be one of these people.
There are lots of people who have never even considered buying land. You could find yourself asking “Is buying land a good investment?”. Understandably so – people aren’t always willing to play outside the box when it comes to their money. I’m not saying that buying land is the ‘be all end all’ of investing, but you should definitely be open to including it in your portfolio.
You owe it to yourself to at least be educated about the different types of real estate investing. Most of you are familiar with the fancier and more glamorous real estate methods. House flipping and home renovation shows take over TV channels. Robert Kiyosaki made townhomes and other building investments look easy.
No one is talking about why land is a great investment. That presents you with an opportunity. These 12 reasons will convince you that land is a fantastic investment, and will make you want to put your money in the dirt – literally.
1. Land is a Finite Resource
No one is making any more land! I know Elon is out there trying to populate Mars, but as of the 21st century, the country lines are pretty well drawn. We’ve got a set amount of land in the USA. Buildings can be replaced and demolished, whereas land is a valuable and finite resource, with only limited quantities available.
I love the quote below. I know it’s overused in the land niche, but it’s true – forgive me if you’ve read it dozens of times already.
“Buy land, they’re not making it anymore.
— Mark Twain, Writer
2. Land Gives You Peace of Mind
The land is the well-behaved, ‘golden child’ of investing. Land can’t be stolen or destroyed. No extra effort from you is required. There’s nothing to protect, maintain, or renovate. There’s nothing to ‘do’. Land in its natural state will always be worth something!
A key component to investing in land is to buy a property that can have something ‘done’ to it one day (e.g. suitable for building or housing). This will make sure you have no maintenance to “do” now, but your land will be worth something in the future.
3. Land is a Tangible Resource
Land cannot vanish or disappear like shares or stocks. If tomorrow the world decided that money was just a useless piece of paper and has no value, land will still be something. It will be something tangible and physical that is yours, regardless of what the global economic situation is. Currency and monetary values may change, but ownership does not.
4. Land has Low Competition
In this real estate niche, there’s low competition. Most people (especially those with a lot of investment capital) are focused on the shiny and glamorous aspects of real estate investing – condo buildings, developments, house flipping, multi-units. It’s not their fault, almost everyone is focused there.
These methodologies sell-out conferences and consume TV channels all across the country. But sometimes to win, you have to be where others aren’t.
5. Land is Inexpensive to Own
The land is inexpensive to own over time. There are no mortgage payments or utility bills. There are no extra charges for the best internet package. No roof needs to be replaced.
Property insurance is not required, even if you do decide to purchase it’s minimal. Property taxes are minimal – I’ve seen lots with property taxes of $3/year. THREE DOLLARS! That’s less than a cup of coffee. Your asset sits quietly in the background, costing you almost nothing and silently increasing in value.
6. Land has No Government Implications
When purchasing and investing in land, there are no risky government legislations that owners have to pay attention to. The Dodd-Frank [introduced by Obama in 2010, as a response to a massive economic downturn in the U.S.] applies heavy rules to real estate but does not apply to vacant land.
The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) [introduced in 2008, as a response to the mortgage crisis at that time] does not apply to transactions only dealing with vacant land. No legal implications to worry about. No need to hire lawyers or paralegals to help you meet government requirements.
Disclaimer: We are not lawyers! By reading this article, we are not giving you financial or legal advice. We have shared our interpretation of constitutions such as the Dodd-Frank and SAFE acts. These views should not be the sole source of information before performing a transaction, we still encourage you to discuss potential transactions with an attorney.
CTTO Source Link: https://bit.ly/3izoehr