While this may seem like a silly question to experienced real estate investors, many newbies to the arena of real estate investing have valid reservations about the value of land as an investment. Part of the skepticism comes from listening to those self proclaimed real estate GURUs pitching get rich quick schemes centered on the value of land and making it sound too good to be true and too simple to be considered work.
A lot of people are looking to real estate to get back funds lost during the economic downturn and to find an interest bearing investment that won’t take thirty plus years to be worthwhile. There is no doubt that real estate is a stronger market investment than most CDs or stocks right now, but many investors want to avoid becoming landlords.
Buying properties to rehab and rent is tedious work. Coordinating contractors, getting funds to do repairs and finding out that unexpected major repairs are necessary can be taxing enough. That is just to get the property through the rehab. Once you have the property habitable, you have to deal with finding, researching and accepting tenants, and then come the clogged toilets, late rent checks and the inevitable sob story along with it. This is where an investment can quickly lose its appeal as it becomes a job more than a passive income source.
Well, the good news is most money greats didn’t make their fortunes buying rehabs and playing landlord for years on end. Smart investors turn to land for the hassle free investment opportunities. Raw land, vacant land, timber land and farm lands all have one thing going for them and that is that there will never be more and their value is steady through almost every economic crisis.
The cost of land has not declined. Back in the 1970s you could buy an acre of land for around $500. Today you won’t find acreage for under $1000 in most areas. That is of course if you don’t buy your land for cash from other investors. There are networks of investors that purchase land for cash from owners that needed to sell fast for whatever reason. When you deal with such networks, you can usually get really good deals on vacant and raw land.
Is land a smart investment? That would be a definitely yes. You may have to hold onto the land for a few years, but the return on the investment will be higher the longer you wait. Unless of course, you buy land that is a future site next to Walmart or something; buy smart and do your research. If you are just starting out investing in land then we suggest you get this informative Buying Land on a Budget guide for the extra confidence you need to succeed.
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