There are many things that you can do with land. These vary from building a house to creating a wide-open park space. Many locations have an abundance of it for sale. However, it can be tricky to know if investing in land will prove to be good over time.
Land is a quality investment for many reasons. Buying land can give the owner a passive income, open up endless possibilities, and provide a way to invest without risk of theft or tough competition.
Land is a different, and often better, way of investing than purchasing any physical storefront or home. Read on to learn more about investing in land, from its value to the reasons that it will benefit you in the long run.
Is Land a Good Investment?
Land is a good investment. The fact that it creates a possibility for anything to be built on it is substantial evidence enough, among many other factors. It is difficult to lose money if nothing happens that would harm the land or decrease its value.
Someone looking to invest their money in land should be comforted by the fact that it is an excellent decision. The chances are that they will gain money over time rather than losing it.
Does Land Appreciate in Value?
Unlike properties and other physical items, land appreciates over time in most instances. Someone who has invested in land and lets it sit will see the value go up the longer it remains undeveloped and unused.
Land appreciates in value because:
- It is limited, so the more that is bought up the more the remaining amount costs, and the more the owned land’s value increases
- Leaving the land empty means that there are and always will be unlimited possibilities
Land will continue to appreciate as the amount available gets smaller and smaller. This appreciation could go on forever or until there is no more land left to invest money into.
Is Land a Better Investment than Stocks?
While both have their advantages and disadvantages, land is a better investment than stocks for those who do not enjoy risking their money. Land steadily increases in value, taking a long time to climb up in numbers. Land value rarely dips. On the other hand, stocks rocket up and down without warning because of volatility. You can gain a lot or lose a lot in a second.
Investing in land is a better choice if you:
- Are fearful of losing your money
- Do not have time to check the stock market
- Want to leave your investment alone but still watch it grow
You can also invest in both at the same time. However, land sees more of a trend upwards than stocks do daily.
10 Reasons Why Land Is a Good Investment
There are many reasons why land is a good investment. Among them include little competition, appreciating value, and endless possibilities. These are just a few of many.
We will discuss ten reasons why investing in land is a good one. It is a great choice for your money in the long and short term. You can feel confident in placing your finances in this physical asset.
1. Land Appreciates in Value
As mentioned before, land appreciates over time. This means that the value will go up. With commercial properties, the value tends to fluctuate or even go down the more that time passes. Land is more predictable than that. It tends to:
- Go up slowly over time
- Appreciate due to lack of land
Thus, the owner can rest knowing that this asset is going to appreciate over a long time. In the worst case, it will simply stay the same. It is rare for people to lose money when investing in land.
2. There Is Little Competition
Unlike real estate, there is not a high level of competition in the world of land investment. Investors that intend on selling property invest in homes and other buildings. These are properties that are ready-built in desirable areas. These are what people tend to look for if they are moving or starting a business.
Those who do this overlook the potential that land has. It can:
- House homes which can then be sold
- Serve as commercial property for businesses
Though the result is not instantaneous, the value is still there and even more beneficial than investing in property. The competition simply is not high for land, great for anyone who wants to make this investment.
3. The Possibilities Are Endless
Anything can be built on empty land. From a department store to home, the possibilities are endless. Land that already has something built on top limits what can be done. The property must be bulldozed or worked with to make use of what already exists.
Empty land can:
- Be divided up how you would like it to be
- House almost anything that you can imagine
- Be transformed before building begins to ensure that everything is ready
- Prevent extra expenses that come with dealing with existing properties
While noting any laws or restrictions that exist on the land, you can create anything that your mind can come up with on empty land. The imagination can run wild.
4. More Land Cannot be Manufactured
Unlike products, businesses, and houses, land cannot be manufactured. There is and always will be a limited amount of it that exists on the planet. Thus, the demand and value will always increase as more and more is bought up by interested people.
Decreased value occurs when something is overproduced. It gets cheaper and cheaper and cheaper. Landowners can rest in the fact that:
- More land cannot be produced, so the value cannot make a tremendous shift
- Land will get rarer and rarer the longer it is held onto
- They have staked a claim on limited supply
Houses can be demolished and built again. Businesses can burn to the ground and be reproduced. Land cannot be built again, nor destroyed. It is what it is.
5. You Can Take Your Time Deciding What to Do
Your land is not going to disappear if you take a long time deciding what to do with it. It also will not plummet in value like stocks do sometimes if left alone. With land, you can leave it alone for a long time and no harm will befall it as you make choices for the long term.
Of course, there are always financial decisions that are better made sooner rather than later. Still, some are best left untouched. It is your land. You can decide without worrying about running out of time.
6. You Can Gain Passive Income
Passive income can be earned from investing in land if you are smart about what you turn it into. There are a variety of items that can help you to increase your income without you having to do anything.
Some of the items that you can transform your land into for passive income include:
- Recreational spaces, such as hiking areas or fields
- Parking lots, where vehicles can pay to park for the short or long term
- A leased space for cell phone towers or solar energy plants
These different parts of land can give you money, and you do not need to be there to earn it. All you need to do is build the space and ensure that it is running smoothly. You can even hire other people to run the place for you. Either way, you will make money on the location without much effort at all.
7. Land Cannot Be Stolen or Broken Into
Land can be trespassed on, but it cannot be stolen or broken into like a home or another piece of physical property. You do not need to worry about losing money, broken windows, or missing products. There is nothing there but the land that you have invested in.
If someone builds on your land, you have the proof that you need to take it up in legal terms. It is much harder for someone to steal your land than it is for a squatter to gain rights to a home. Investing in a physical asset that cannot be lifted and carried away is an excellent benefit that many do not consider.
8. You Do Not Need to Deal with Tenants
If you own a building, renting out rooms is a part of making money. Tenants can be difficult and messy. Sometimes they do not pay. Sometimes they end up costing you more money than you earn from allowing them a place to sleep at night.
With tenants, you must deal with:
- Rules that must be established and enforced, meaning traveling to and visiting your location
- Ensuring that rent comes in on time
- Preparing the place and marketing it to potential customers
Land does not require tenants. There is no need to deal with noise complaints or worry about who you are letting stay on your property. You can certainly build a home and rent it out, but it is not a requirement to make money.
9. Can Be Purchased for Low Prices in Certain Areas
In certain places, land can be acquired for a small amount of money. Most places offer land for a much lower price than a home. It is often even cheaper to buy land and then go about building your home on top of it.
Some of the cheapest places to buy land in the United States include:
- Iowa
- Upstate New York
- Minnesota
- Texas
The low price means that you will have extra money that you can use for the land. Saving money is always something to strive for when making purchases. This will certainly allow you to do just that.
10. Land Does Not Require Maintenance
Land does not require maintenance. It is simple and straightforward. There are no leaking pipes, no graffiti that can be placed on any walls. Land is just land. If you want to maintain it, you can:
- Keep areas clear that you would like to build on
- Ensure that it stays clean of trash
- Build a fence around the area to keep litterers out
Otherwise, there is no maintenance required. Land exists and runs itself. There is no need to interfere with how Mother Nature takes care of herself.
Conclusion
Though it may not seem like it at first, land is an item that is an excellent choice for investors. It appreciates in time, it can turn a profit, and anything can be built on top of it. These are just a few of many reasons that investors can feel safe purchasing land.
Owning land brings a certain peace of mind. It does not change in value as other investments do. There will always be ways to earn an income from this limited supply resource.
