At one time, land served as one of America’s pre-eminent investment opportunities. George Washington earned little profit from his famed Mount Vernon farm, but saw investments in land as a road to personal prosperity.
As another wise American, Mark Twain, advised, “Buy land. They’re not making it anymore.”
A few artificial islands in Dubai not withstanding, this advice on development land still holds true. Yet people still turn their noses up at investing in land in favor of much riskier propositions.
Many investors avoid putting their money in land because they do not understand its potential. Oftentimes, they will convince themselves not to put money into an investment with little to no market movement. Also, investors may fret because they collect no direct income from the land.
Some may even call land investment or commercial real estate “boring.”
These aspects of investing in land lead many to overlook its potential because it does not “look” or “act” like investments in stocks, bonds, or other financial products.
Land is boring.
In the realm of investment, boring is good.
Boring means that an investment will deliver expected results, but with little or no risk. Well-chosen plots of land will appreciate in value over time, especially as part of a long term investment strategy.
While land itself may not directly produce income, it can help to bolster investment in financial products. Investors can take out loans against the land, then use the capital to invest in stocks or other products.
In certain areas, land investment that includes mineral rights can open up a lucrative revenue stream. For example, underneath much of Utah lies significant reserves of natural gas. When you acquire surface and mineral rights, you have the option of allowing exploration for gas or other resources.
"Boring" investments are all the more attractive because they need so little protection.
We recommend that you visit your land at least twice a year to inspect boundaries and to prevent squatting, and obviously you should also keep up on taxes, but little else is required. The land need simply lie there and accumulate value over time with no more effort on your part.
Some pieces of land can even passively develop resources to augment the value. Timber growing on property, for example, can serve as a strong source of revenue.
Those who have little knowledge of financial products, especially stocks, could find that land is an easy investment to track. Furthermore, those who are pushed for time may appreciate the 'hands off' nature of land investment.
Also, statistically speaking, vacant land is a commodity with highly motivated sellers. Buyers can, in most cases, find good investment-grade property in an area convenient for them.
With a few notable exceptions, development land serves as a better investment in the long term rather than the short term. Over time, the vast majority of land investments will gain in value. This makes it a perfect repository in which to place investment funds, especially if the goal is a diversified portfolio.
Additionally, land investment makes sense for those putting funds back for their children’s college fund, inheritance, or other purposes.
Are you ready to follow the wisdom of George Washington and make a quality investment that could provide positive returns?
Call today if you have any questions about land investment. We can answer them and schedule an appointment for a consultation.
Let us help you to secure your financial future with the oldest and one of the wisest investments, land.
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