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Jul 17

Investing In Land A Good Idea

Many people love the idea of living on a ranch in Wyoming, away from the city where they can own lots of wide, open space. While this may not be a feasible goal for most, it’s the underlying appeal of this dream that is telling, namely, the desire to own land. America was founded and expanded on the idea that people should own their own land. In fact, it’s still the American dream today. But how realistic is this goal? Is investing in land an aspiration for which we should still be striving? Before you buy a ranch out west or even an empty lot in your neighborhood, consider the benefits and drawbacks of owning land.

The biggest benefit to owning land is that as the population continues to grow, land will become more and more valuable. It’s simple supply and demand; the price will always increase. Investing in land itself (with no structures or improvements) has several advantages, especially if you’re thinking long-term. Land that hasn’t been developed is less expensive than property that has, so you can buy the lot for your dream home and then save up the money to actually build the house a few years down the road.

In the meantime, you aren’t paying for maintenance (depending on the type of lot), and property taxes are cheaper. You also don’t have to spend time finding and managing renters or worry about following all of the complicated city regulations. And if you decide later that you don’t want to (or can’t afford to) build your home in that area, you can sell the land for easily more than you bought it for. Keep in mind that as with any real estate, the key to owning land is the location. If you’re going to invest in land, pick something that it’s in a prime spot.

The obvious disadvantage is that you won’t be making money from the land right away. It will realistically take years for the value to go up enough to make it a worthwhile investment. If you need money now, that’s not a good option. Also, before you build anything, you have to have a geological survey performed. If conditions are detected that would make the land unsuitable for development, you may have a difficult time building on or selling it later. Finally, the city can re-zone the land at any time. If it’s zoned for commercial use, there goes your idea for a residential development.

Whether or not you should invest in land is a decision only you can make. If you have the money and want a solid investment for the future, it may not be a bad idea.

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