If you’re seeking to grow your money through investments, it’s always best to consider your options and see what other people do. A staggering 90% of established millionaires around the globe invest in land and real estate, according to The College Investor. With that being the case, there must be very good reasons why investing in land is always a good idea. That being said, here are a few of them!
Land Always Appreciates
Assets, in general, have a useful life wherein their value goes down as they are used. Bare land, as an asset, does not have a defined useful life so there is no real way to depreciate its value, according to Steven Bragg of Accounting Tools. What this means for you is that when you purchase land, its value cannot go down and will only go up. So it is practically assured that when you purchase land and you decide to sell it down the line, you will get more than what you put in initially.
There Are Different Types of Land Zones
Before you buy raw or undeveloped land, you have the luxury of looking at the different zoning types so you can decide what your land can be used for. If you’re seeking to use the land for a ranch, finding rural zones can give you an idea of what parcels of land you can choose from. Texas is commonly known as a good spot for rural zone investments, based on information published on https://texasland.com/. Ultimately, this makes land a good investment as depending on the zone the land is in, the sort of returns you get can get boosted significantly.
Land Has A Good Average Annual ROI
Land is a type of real estate investment—a long-term one. The average annual returns for a long-term real estate investment are put at 9.4% for commercial zones and 10.5% for residential and diversified real estate, according to the National Council of Real Estate Investment Fiduciaries. Real estate investment trusts yield an average annual return of 10.5%, too. So what this shows is that when you get into land investment, your portfolio can expect a positive annual return of investment (ROI) for years to come. To help give you a better idea of your expected ROI, you can make use of any number of free ROI calculators that publications like Investopedia have online. This is a good idea so you can see for yourself what sort of returns you can be getting with different parcels of land that you might be looking into.
People Are Looking To Be Self-Sufficient
It is expected that 2021 will be a good year for rural land investments, says Jason Walter, CEO of National Land Realty. He says that in the past year, rural land has greatly appreciated in the Southeast, as consumers have taken on a migratory pattern from the Northeastern American states. It seems that buyers are seeking to stay away from metropolitan areas and finding greater tracts of land that they can grow their own food on. Self-sufficiency is their general aim, and investing in land now ensures that you will help meet market demand and gain profits. It’s also possible for you to invest in land for yourself so you can also get in on the trend and become self-sufficient in the future.
There’s Little Competition
Have you noticed how real estate companies often boast about how many houses or apartments have been sold in a development project? This is because developed land is often a battlefield when it comes to landing an investment. Raw land, on the other hand, has very little competition as investors typically keep an eye out for houses, apartments, and other commercial property because that’s what’s popular. So as a land investor, you’ll be able to view various pieces of land and not worry about the timeframe or the competition. It makes any land investment a lot less stressful than when you mull over investing in developed properties.
Vacant Landowners Make Uncomplicated Sellers
What a lot of people tend to overlook is that a lot of vacant landowners are highly motivated to sell. The land they own may have been bought to fulfill plans that fell through or it may have been inherited—the bottom line is that vacant landowners tend to not have that emotional tie that one would typically have for a childhood home or a storefront. Buying vacant land is not complicated with sellers that can change their mind in the middle of negotiations. So once you’ve settled on a parcel of vacant land, there’s a high chance of the purchase going through without a hitch. You can also find vacant lot sellers posting their land online so you can start a purchase on parcels of land without having to leave your home.
Land Is Easier To Purchase
Developed real estate properties often need significant capital to purchase. So it is not unusual to take out high-interest loans to purchase a building, house, or apartment. Land, however, is not bogged down by that since they are significantly cheaper than developed properties. This is especially true for private sales where you deal with the seller directly and can even haggle, too. If you’re planning on buying land from a local realtor, they will probably have affordable financing plans that help ease the cost of obtaining land. Also, it’s important to keep in mind that when you’re buying land for a long-term investment, the overall cost is significantly less than compared to an investment that you need to turn over within 2 years to gain profits.
So it is clear that investing in land will not go out of style any time soon. In fact, it may be looking at a significant boom in the next few years as people are looking to leave densely populated metros and soak in some fresh air and tillable soil. So weigh your options and look for viable pieces of land you can invest in so that you can secure your financial future.