With all that has gone on in the world over the last two years, it’s easy to see why many people are rethinking their investments. Most people are regaining their financial legs and working in recovery mode. With all that uncertainty some tangible assets such as stocks, bonds, or mutual funds may be more intimidating. One tangible asset that is not as intimidating are land purchases!
It is a great time to add land to your 2023 investment portfolio. Land can be a solid investment for a variety of reasons.
WHY ARE LAND PURCHASES A GOOD INVESTMENT?
One reason why land is a good option is the longevity opportunity it presents. Land can be bought and held. It can weather cyclical market storms. This is due to the long-term thinking that comes with a land purchase. If a down market causes an equity loss, it is usually recovered with time. People have more long-term thinking with land. This encourages landowners to hold on to it for a longer period.
Another reason is simply the state of the market. Housing prices are tailoring down in 2023. Land is aligned with the housing market. This has caused land prices to fall. It is a buyer’s market for the first time in 2 years. Land investors can negotiate prices in their favor. Land is much more appealing to a land buyer when the price can be negotiated, and deals are made in the buyer’s favor!
FORCED APPRECIATION OF YOUR LAND INVESTMENT
In fact, you don’t even have to wait for your land to appreciate, you can choose to force the appreciation. Forced appreciation is when you add elements to your land that adds value such as a paved driveway or adding an electrical box to a future residential custom lot. Adding enhancements to your land instantly adds value and makes your land more appealing for your own resale. This approach does come with a due diligence on the part of the buyer to ensure your vision for your land aligns with all county requirements and dictated guidelines of land use.
A final reason why land is a good investment in 2023 is the upkeep you have with land. Owning a piece of land is much different than purchasing residential property. Basic maintenance is usually all that is required with land. It usually sits well over time especially when it’s purchased for the long-haul investment mode.
As the environmentalist author Aldo Leopold once said, “Land is not merely soil, it is a fountain of energy flowing through a circuit of soils, plants and animals”. He knew the value that land has to offer, maybe it’s time to see how you can do the same!
