Is Buying Land a Good Investment Right Now?

You’ve probably heard the old saying about how land is the only thing they’re not making more of — which means it has an ever-increasing demand and a limited supply. As a result, land can be one of the smartest long-term investments as it continues appreciating in value over time. Still, there are many factors you’ll want to consider before investing in raw land. Let’s take a look at each of them to help you determine if buying land makes sense for your particular situation.

Is Land a Good Investment?

Compared to many other investments, such as stocks and cryptocurrency, land is a historically good investment. The simple fact that the world’s population continues to grow while land remains limited is a big factor in this. And thanks to modern technology, buying raw land is easier than ever before. 

But this doesn’t mean it’s a good investment for everyone. Whether buying land is a good investment for you depends on what you want out of your investment, how quickly you want it, and your overall budget for investing in raw land. 

Different Types of Land Investment

To give you a better picture, let’s look at the different types of land investment. These include:

• Buying and Holding
• Leasing the Property
• Developing the Land
• Flipping the Land

Buying and Holding

The most common type of land investment is the buy-and-hold strategy. This means that you purchase a piece of land — preferably one that you can enjoy through hiking, hunting, camping, — and hold on to it as it appreciates in value. 

This gives you an option to sell the land at a profit when the time is right. Or you can simply hold on to it and continue to enjoy the benefits of land ownership. Since most vacant land is relatively cheap, many people prefer this option. 

Leasing the Property

Another investment opportunity involves leasing the land to generate income. There are several options for leasing raw land. Two common options include cell towers and billboards. You can also lease raw land to ranchers for livestock grazing, to farmers for growing crops, and to utility companies. 

This option requires some research and due diligence because not every piece of land is ideal for the leasing options above. But the nice thing about owning land is that it’s almost guaranteed to increase in value over time. 

Developing the Land

Developing vacant land is a bit more involved than the other options on this list. But it can also be the most profitable if everything goes well. There are plenty of options for developing land. These include apartment complexes, retail stores, houses, cabins, RV rentals, campsites, or commercial enterprises.

The location of the land and the zoning are both important factors to consider if you want to develop land for a profit. This often takes a rather large up-front investment, especially if you’re looking to build an apartment complex or a commercial facility. 

For this reason, the more common investment involves building a house on the land, which can drastically increase the property value. But, there are many things to consider if you want to build a home on raw land. 

Flipping the Land

Buying raw land to flip it is a similar technique to buying and holding the land. However, there are some key differences. Most of the time, the timeframe for land flipping is much shorter than buying and holding. The idea here is to purchase land low and sell it high. 

However, although raw land is relatively inexpensive, not every parcel is ideal for flipping. The market conditions in that area have to be right, and the seller of the land has to part with it for a low enough price that you can turn a profit. 

If a piece of land seems too cheap, it’s important to do your due diligence and make sure there’s nothing wrong with the land before you purchase it. Of course, you should do this with any piece of land you’re looking to buy — low price or not. This is where it’s good to work with a company like Land Elevated. We own all the land we sell and always provide a detailed breakdown of the land features. We always guarantee a clear title and will help you with your due diligence.

Now that we’ve covered the common types of land investments, let’s dig down to whether investing in land is ideal for you. 

How to Determine if Land Investing is Right for You

Many people are surprised at just how cheap raw land is. America is one of the few developed countries in the world where you can still find inexpensive land for sale. However, this doesn’t mean that everyone is suited for investing in land. Consider the following factors before you decide to invest in raw land. 

Do You Have the Budget?

While our dream here at Land Elevated is to make land ownership a reality for anyone who wants it, we don’t encourage anyone to spend money they don’t have. We make it as easy as possible with favorable financing options and low monthly payments, but factoring the cost of buying land into your budget is incredibly important. 

And if you’re looking to develop the land, you’ll need to factor that into your budget as well. Investing in land should be a fun experience, not a stressful one!

Are You Patient?

Most land investments require patience before the payoff. Those looking to “get rich quick” will not find what they’re looking for in raw land investments — or really any legitimate investments. This is why we encourage those who invest in raw land to remember that land is likely to appreciate in value, but it doesn’t do so overnight.  

Is Owning Land a Dream of Yours?

Land is a perfect investment for those who have always dreamed of owning their own piece of property. It’s great to be able to enjoy your investment while it appreciates over time. Whether you want to camp, hunt, hike, swim, or even build a tiny home, a land investment is a great option for you. Then, when the market conditions are right, you can sell the land for a profit, if you want to. 

Are You Willing to Research?

Research is a very important part of the land investing process. You’ll want to make sure that everything is to your liking and any important requirements are met. Research includes looking into things like:

• Location – Is it ideal for you, and will it likely increase in value enough for you?
• Zoning – The zoning will impact what you can use the land for. 
• Utilities – Do you require access to gas, water, and sewer lines?
• Boundary Survey – This is important to determine the exact property lines. 
• Title Research – Does the title have any liens or encumbrances?

For more on due diligence, check out our article on researching land. 

If you find a property through Land Elevated, we provide a detailed overview of the land, which makes research so much easier. We also provide dedicated Land Specialists that can help you on your land-investing journey. 

Conclusion 

According to the USDA, farmland, cropland, and pasture, all increased in value by 5% to 7% from 2020 to 2021. This is a trend that’s expected to continue, making land an excellent investment. Supply and demand dictate that land is a precious commodity. And while a land investment won’t make you a huge profit overnight, it’s ideal for those who want to have their cake and eat it too, so to speak.  

So if you’re looking for a piece of land to invest in, head over to our Property Map to start your search. Or, call us and speak to one of our Land Specialists today!