Most people think that land investment is only for real estate developers who buy big parcels of land for commercial or residential development. But actually, investing in land is one of the greatest investment strategies available for everybody who wants to build wealth!
As the supply shrinks and the demand increases, the value goes up. The supply and demand equation is the essence of our free market economy.
Every year hundreds of thousands of immigrants enter this country. Most of them are highly educated professionals with financial resources and the mind-set to start pursuing their “American Dream” by investing in Land and/or other Real Estate… Add on the Baby Boomers, Unprecedented Rate of Birth and Longer Life Span to immigration, you will see why finding undeveloped Land close to major urban areas soon to be a thing of the past.
Moreover, the population of earth has increased by over 300% to 6.6 Billion People. The population of The United States has also increased very rapidly to over 304,000,000. And all these people compete for land to grow their food, build their amenities and most importantly their homes on their land.
Another important factor is the evolution of media. The Internet has virtually eliminated the necessity of our physical presence to conduct business, etc. Nowadays, one can be an audience to a social performance without being physically present; one can communicate “directly” with others without meeting them in the same place. The walls of our homes no longer isolate us from the invasive means of communications, courtesy of our interwoven “Global Village.” Simply, the Media, Telephone, Television, Fax and Internet have broken the spatial boundaries of the yester-years and reshaped how we live our lives or conduct our business. Electronic media is present in nearly all physical settings in our country. Almost all American homes have access to Telephone, Television and Internet.
Over 70% of Land Buyers now conduct their due diligence through the Internet prior to buying. They see the property from satellite images… in some ways; the electronic media has linked us all together regardless of our race, gender or status in life.
ANOTHER REASON FOR INVESTING IN LAND IS THE POWER TO LEVERAGE
By Leverage I mean your ability to buy Land today and pay for it over time. With this option, you achieve two objectives: 1) saving a portion of your earned income to control yourself 2) your invested dollar appreciates every day and earns you more money over time. Plus, many land sellers offer an owner financing option. When was the last time a Corporation or a Stock Brokerage Firm would let you buy stock today and pay over 5, 10 or 15 years?
Just imagine asking your bank for a loan to buy stock. They will laugh at you all the way to their vaults. Why is that? That is because the stock market is too risky and unpredictable.
Investing in LAND is also believed to be the best hedge fund against inflation.
“Ninety percent of all millionaires become so through owning real estate.”
WHEN IS THE BEST TIME TO BUY LAND?
President Abraham Lincoln said: “Things may come to those who wait, but only the things left over by those who hustle.”
Historically, land continuously increases in value. Sure there are ups and downs throughout the years, but the overall trend is always up!
So don’t believe all the hype you hear. That the “bubble” is bursting; or that you missed the boat. Or wait and see what happens with the housing market. First of all I am not talking about the housing market. Investing in a house brings a lot of responsibilities and maintenance payments with it. Plus the return on investment on a house is very limited, unless the market is all hyped up, like just a few years in the past.
Land has a lot of potential for growth; while, a house is normally bought and sold within the margins of its market value. Moreover, you can enhance the value of your undeveloped land, sometimes by 1000%. How? You can buy a large parcel within a growing area, subdivide it to smaller pieces (it’s also called paper divide) and sell them for a lot more, individually.
Land is unique. No two pieces of land are entirely the same. As a result, if your property is located in an area that a developer is going to build a major structure, you could be laughing all way to the bank.
So, waiting for the right time to buy land, I believe, is not a good strategy. All you have to do is find the right property at a great price! In other words, smart buyers make their money when they buy their land; not when they sell it…
Did you know investment in Real Estate has major tax incentives? All you have to do is ask your CPA or a Tax Expert. Some of these incentives, exclusive to Real Estate, are: Primary residence Tax Exemption, 1031 Exchange, etc… I don’t know of any other investment that gives you so many tax incentives.