Land – The Most Versatile Investment

Whether you’re interested in land because you want to camp, hunt, build, or just escape from city life, land can be a powerful investment and should be viewed as such. It might be seen as a non-conventional investment, but owning land can be one of the most stable, hassle-free and lucrative investments out there.

Raw land should be viewed and evaluated as an investment. This is important and should be a factor in your final decision to buy the perfect piece of land. Note that we are not financial advisers and are not giving you financial advice, we are simply here to help educate you on the values of land ownership and how we have been successful investing in land on our own.

Most people go through life owning homes, stocks, bonds, and mutual funds as a means to grow their wealth. Why is Land left off the list? Most of the time, it is because land as an investment is misunderstood, and we are going to show you why. Continue reading for pro land investment tips.

Misconceptions About Owning Land

To most, land is a scary investment because, in its raw form, it is a non-performing asset – meaning that it is not generating any recurring revenue. And this is true for a lot of land out there, but as we will discuss later in this post, there are many options and opportunities to generate value and recurring revenue from vacant land.

There is also a misconception with raw land relating to appreciation and value. Many people fail to recognize just how much land can appreciate or increase in value over time or with minor improvements made. We have invested in areas that have seen double-digit appreciation year over year, and our initial investment ended up being a fraction of the current value. We have also purchased property and made improvements to it, and by doing so, we added value.

So you might be thinking… I need to be a real estate expert to profit from owning land. Or, investing in land can’t stack up to my portfolio of stocks. Or better yet, if land is such a great investment why don’t I hear about it more often?

The answer to these questions let’s start with a quote:

“You have your way. I have my way. As for the right way, the correct way, and the only way, it does not exist.” Friedrich Nietzsche

We’ll explain.

Where to Start

It all starts with being a good candidate to own land. Being a good candidate to own land starts with being passionate about your investment. If you snatch up the first piece of land you see without doing your research you might be making a bad investment.  On the other hand, if you’re passionate, do your research, and plan diligently, investing in land can generate immense value. So how do you find these opportunities?

We recommend that you start by looking for land in an area that you are interested in, and explore all of the allowable uses.  Chances are, if you think an area or region is attractive, so do a lot of other people.

Once you find a property or a general area that you are interested in, make sure you research the property.  You will want to determine if there are legal access, code violations, back taxes owed, HOA dues owed, etc. so you have a full picture of the cost of the property.

Next, be sure to confirm the zoning and building restrictions with the county/municipal zoning and building departments.  You would be shocked to know that there are thousands of properties all across the US that have no legal use due to zoning or building restrictions.

Last but not least, make sure that the property has a clear chain of title, and the seller has the authority to transfer the deed into your name.  There are all sorts of issues that come up with improperly transferred properties, liens, easements, or other restrictions that make a property unmarketable.

So once you have your property – then what?  Here are just a few of the ways land can be a valuable asset.

Land as an Asset

Appreciation

The supply of land is finite, meaning there isn’t any more being made. If you buy land where it will be demanded in the future then your investment will appreciate. Economics 101.

Improve it

Investments in improvements can provide a significant return with land.  Some examples are adding a driveway cut to the property, a septic system, a well, or a fence.  Or take it further and pour a foundation and build a cabin and home on the property.   With each improvement and investment, the value of the property can be increased significantly.

Rent it Out

Some people build on their land and only stay on it occasionally. If you do it right you can rent out your destination home on the weekend using Airbnb, VRBO, Craigslist, and other rental platforms. You could even rent the land itself if you don’t build on it. Check out Hipcamp for making extra cash renting your land to campers.

Energy Farming

Depending on the location you purchase in you may get 300+ days of sunshine, live in an extremely windy area, or both. This provides the opportunity to set up solar and wind farms, both of which can generate passive income streams!

Agriculture

Agricultural land has become more and more valuable over time.  And with advancements in technology and changing regulations, land that was not previously used for agricultural purposes is being used for farming and livestock.

Billboards and Ads

Some land is strategically located in a highly visible area which allows for the opportunity to install billboards or other advertisements that can be leased and used as a great low-maintenance, recurring revenue stream.

Mineral and Water Rights

If they are not severed from the property, mineral rights and water rights can have significant value and can be leased or sold independently.  Many people have retired on leasing out their mineral rights to oil and gas companies or mining companies, and water rights have skyrocketed in value in the last 10 years.

State of Mind

You can’t put a price on your state of mind. While your stocks and homes values are regularly fluctuating, your land is sitting still, unaffected, holding its intrinsic value. Land can be a great investment as the foundation of your portfolio. What do they always say? Diversify, Diversify, Diversify.

Versatility

And now for the fun part…Versatility (not that money isn’t fun…)  Owning land gives you the freedom to create something special.  You have the opportunity to evaluate all of the potential uses and decide on the best strategy for you.  That may be a combination of some of the things we have mentioned above, or it may be something totally unique and new. Either way, your investment in land will have more versatility and potential exit options than most any other investment out there. Whichever piece you buy becomes your blank canvas to do whatever you want with. If you want to spend time in The Rockies in your log cabin, build it! If you want to set up your ideal campsite next to your favorite national park, get to it! It brings you more than just a project to work on, it brings you purpose as you set up your next destination for a friend and family getaway.

Conclusion…

So even if setting up the ultimate campsite is your main driver in pursuing land, you should also be looking at it as an investment vehicle.

You should be passionate about being a landowner, and be willing to do the research and plan out how you can make your land work for you. If you’re interested in owning land, this can serve as an introduction to understanding just how solid of an investment land can be, and what it can offer you beyond the surface.

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