Investing in Land: Is Land a Good Investment

"Land is the Closest Thing to the Proverbial Pot of Gold" ~ This ancient proverb says the truth in itself.

Many people have this belief that investing in land is only for real estate developers who deal in huge commercial or residential development projects. However, land investment is one of the greatest investment strategies that one can take in their stride for making wealth. The key is buying the right property, at right price, at right time!

The various types of land that one can invest in are:

land investment

1. Timberland

Large wooded areas and forest land can bring in huge amount of profits as housing development is on the rise. And trees always grow back, which means you can earn long-term yields. However, as trees take time to grow, you can expect to earn after every few years.

2. Commercial Development Land

These are the office, retail, healthcare, public storage properties which garner huge rental income.

3. Residential Development Land

A shelter is needed by anyone and everyone, and by investing in residential property, you always tend to make big bucks.

4. Ranch Land

These properties are in major demand right now, by individuals and family farmers alike, due to increase in cattle prices or for recreational interests.

5. Vineyards 

The idea of producing your own wine appeals to the mighty high class and many people have started showing keen interest in such properties.

6. Mineral Production Land

You can make huge monies by leasing a land to oil and gas corporates in the areas which have high mineral, oil and gas accumulation. However, be sure about who will get the rights of the minerals as it does not automatically go to the owner.


Top reasons why you should be investing in land


1. Scarcity

The market economy balances on demand and supply equation. Land is a limited resource and with ever growing population, the demand for land is bound to increase. This makes the land value appreciate over the period of time.

2. No overhead charges

When you buy a vacant land, there are no run-in for construction, renovation, maintenance, etc. So, if you can construct on the land, if and when required, you are good to go.

3. The power to leverage

With land investment, you have the choice to buy it today and pay for it over a period of time. It serves two purposes: a) saving a part of your income to control your expenses b) your invested money is appreciated every day and you become wealthier over time.

4. No competition

Since most of the investors are stuck at buying residential building, commercial properties, apartments, rental properties, etc, your chances of getting a great deal in land prices increases manifold.

5. Inexpensive long term investment

If you have bought a piece of land for the right price, you don’t have to pay for mortgages, no maintenance charges, no water or electricity bills to pay, and nominal property insurance, if any at all. Hence, this is the best way to invest your money and forget about it. When you’d look at it after say a decade, the prices would have shot up phenomenally.

6. Tangible asset

Land is a substantial asset – its value does not depreciate, there is no wear and tear, it can’t be stolen, broken or tarnished with. It remains the same five, ten or twenty years down the line, only at much higher value than what you bought it at!

7. Land is a carefree investment

Buying a land does not come with the hassle of fixing the broken door knob, window pane, leaking roofs, bursting kitchen pipelines, mowing the lawn, safeguarding the house from bugs and roaches, dealing with annoying tenants et al. Once you buy it, it just sits there like a good kid and behaves itself.

8. Tax incentives

Investment in real estate has some major tax incentives, which includes 1031 Exchange, Primary Residence Tax Exemption, etc. For details, you just need to get in touch with your accountant or a tax expert.

By utilizing the land investment strategies in your stride, you could have the most lucrative real estate investing career. However, before signing the deed make sure you have understood the land-use restrictions associated with the land. This can be easily found in the land-deed document. Also, check out the access of the land to basic utilities like water, electricity and telecommunications. Other things you must consider are remoteness of the land and whether there is likelihood for trespassing violations. So, a thorough due-diligence is a must before you park your money in a land and expect it to yield a good return.