Is Land Still A Safe Investment?


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Land has always been a god investment. One of the most influential quotes I heard in my youth, talked about how we could make anything except more land. So as the world population continues to rise and the economy remain shaky at best, the question about land remains. Is land still a safe investment? Or has land as an investment been outplayed by the underlying costs of a bad and faltering economy? Can you invest in land safely or are you playing a fools game?

Investing in land

Investing in land isn’t a bad idea. In fact it can be a great idea when you are educated in what to look for and the types of land available. Just as you would do research before investing in any company stock, the same tenacity should be applied when looking to buy land. And it is important to understand the terminology as well, because by investing in land doesn’t just restrict your investment to land, but to the property and buildings attached. With that aside, diving into buying up property based on outdated advice is a very, very bad idea. While the quote above about land is true, what it fails to take into consideration is location, cost, and market inflation. I had a friend of my family that invested in buying up 10 acres of land is south east Florida. 10 acres, all connected to each other, and only about a block from the beach. He bought it before the housing market collapsed and held onto it all for the last couple of years having a hard time unloading it. He ended up selling all 10 acres for less than $1,000 dollars per acre. His unfortunate invest has taught me a valuable lesson, research town development when buying or investing in land.

Knowing what to look forland

If you conduct your research and see the tell tale signs of economic development being slowly introduced into an area, then your investment will pay off. Signs of economic development would be a major highway system either being rerouted through the area or being built running through it. Are there medical treatment centers, pharmacies and banks popping up or already under construction? All of these signs are great leads to look for when thinking about investing in property because it shows a possible investor that the town will be pouring money into development. Your key to success when buying land is understanding how to turn a profit on your investment. So just as you are looking for a stable yet growing stock to invest your money in, the same applies to land. If the area around your investment is modernizing and being built up and better funded, you are more likely to be able to turn a profit on your initial investment.

Once upon a time, the key to turning a profit on a land investment was by buying up undeveloped property with the hope that a builder or contractor would come along and buy out your land. And that still may be the case, but location is key. By understanding what to look for as far as township or county plans for modernizing, you can give yourself a leg up before spending money. A successful investor is the one who researches before a sale, not one who pours money into an investment after the purchase is made.

Cost of the economyland

The cost of the economy has definitely taken its toll on those who invest in land and those who currently have land investments already. The biggest issue when it comes to investing money in land, is that when it comes to selling the land, that process can take time. With stocks, if you want to sell them, regardless of price, you can sell them almost instantly. Land however, takes time. The only difference is that you can tie up money in land and sell it off when the market and demand shifts upwards. But with the economy and the job market shaky at best, the once surplus in spending cash has made land sales difficult at best. This economy has left many people land rich and cash poor, unable to pay their bills and mortgages (yes you can mortgage land in some states too).

Depending on who you ask, will give you a difference in opinion. Investing in land may not be the most sound investment if you are looking to turn a quick profit. However, if you are looking at a long term profit with the ability to gain a residual income by developing the land purchased, then investing in land may be for you. Categorizing land as a safe investment would be dependent on who you ask, but the research you put in prior to the sale would give you the best chance to invest safely to begin with.

 

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