Anyone has heard the phrase ‘buy land, they’re not making any more of it.’ There’s a reason for the saying – land and acreage are great investment vehicles and can have huge payoffs down the road, especially for buy and hold investors. Here’s a list of the top five reasons to invest in land:
- For the Investment!– Simply put, land is almost always an appreciating asset. Unless you buy property in Las Vegas or another real estate “hot spot,” land rarely depreciates. Even more importantly, over the long term even most of the people that overpaid in the recent real estate bubble will eventually see their land appreciate past its purchase price.
- Recreation – Even a property meant as an investment can also offer enjoyment for you and your family. Hunting, fishing, hiking, horseback riding, gardening, and whatever else you can think of are all great reasons to own your own property for your enjoyment.
- Conservation – Buying large tracts of land, particularly wetlands or perhaps areas surrounding other property you own, can be a good way to ensure a good ecological use of the land, or to prevent others from overdeveloping around the property you already use. Also, large enough areas of land that are undeveloped can be used to sell carbon offsets. While not a huge source of revenue, every little bit counts when trying to make land conservation affordable.
- Development – This may mean multi-family properties or office buildings to some people, or to others it may mean erecting a family cabin and barn for a place to retire, whether permanently or for the weekend. Building a custom home can create a strong bond between you and your family and the land, especially if you took part in the construction.
- Low Risk – Aside from some liquidity risk and the possibility of buying in an overpriced area – both of which can be mitigated through long-term investment – land ownership coupled with some due diligence and liability insurance is a fairly low-risk proposition. Inflation hedging is built into the nature of the property’s price, and there are few things you can do to the land to make it totally useless.