Wise investors know why investing in land is a good idea.

1    Land is a real asset. You hold the legal title via a deed. You can see the land, use the land, build on investment land and borrow against it.

2    Land represents a simple idea, "they ain't making any more of it.". The investment is safe because there is a continual, sometimes burgeoning demand, for what is a finite resource.

3    Investments in land often yields very strong returns. The limited supply of good land partially explains its continually rising value and this implies a likelyhood of continued appreciation. 

    Demand for land is constant. The market price increases in property
reflect the soaring demand for houses because of an ever-growing population. That is why well chosen land offers strong returns. Chosen correctly, it is reasonable to achieve 30-35% annually in a 5-year land investment project. This equates to compounded returns of around 400-450%. Such returns are hard to realize with other US investments.

4    Investing in land is a "real world" investment. The value of property is clear to all. This is not the case with investments in equities where the average investor rarely knows whether the equity is genuinely under-valued or over-priced. There are no appraisals as in property. Most people have an intuitive understaning of land because they own a house.  .

5    Land has a significantly lower entry point compared with residential or rental property. An average American house can easily cost $200,000. On the other hand, a plot of investment land can often be gotten at $10000. And the  relative returns are substantially larger.

    A diversified land investment portfolio could be created for less than $50K. Compare this to $200K if getting one house. Land, with its lower entry point,  gives the investor the ability to have more investment opportunities.

    There are two key considerations for anyone who wants to invest in land. You must choose good quality land and you must understand how to market the property. Having sufficient operating capital is assumed in any investment.

6    You need land to build a house on. Investing in land takes advantage of the continuing housing needs which is in crisis in certain areas. It affects both affluent and less affluent areas throughout the country. The rise in house prices has eliminated most low-income housing. Towns are reducing the size of building lot requirements to accommodate more, typically affluent, in-fill homes. Rents have gone up sharply because the rental houses cost more. Owner occupation is at an all time high.

7    Investing in land is passive and hassle-free. Equity trading demands active management, but land is entirely passive. There are no tenants, toilets or trouble. Insurance and taxes are your main costs.

8    Prices of vacant land tends to be stable. With less volatility, the investor knows the value of the lands in his portfolio at any given time. The land in the beginning period, will tend to rise modestly by the effect of inflation. The land then rises sharply in value later if permission to build on the land is achieved. The land can now be sold in order to achieve the maximum profit.

9    Land that is also tax delinquent is the most valuable. The owner will typically be happy to sell the at a firesale price. Anytime an investor can purchase land at 30% or less of its legitimate market value, then a significant profit is just waiting to be had.

Good hunting -

Mitchell Goldstein - Coach Mitch

518-439-6100 until midnight EST