Profit Today by Investing in Land

in Land

Diversification has always been the keyword in a successful investment portfolio. In addition to your holdings in stocks, bonds and other hard currency funds, you may want to take a look at real estate, specifically unimproved land, as an investment tool. Land ownership and investment, which as an added benefit includes a certain amount of pride, is a tangible asset that can't be stolen or taken away from you. It can take many forms, whether it's a lot in a new subdivision, an acreage that fronts a body of water or a piece of agriculturally enhanced land that can be used for income or tax incentives. Unimproved land allows beginning investors to participate in purchasing real estate with a smaller cash outlay than that needed to purchase bricks and mortar real estate. A plot of land can be realistically priced at 20-30% of the total cost of homes on similarly sized lots in the subdivision. Of course a lot that backs onto a street or busy road will have less value than one with great views. And remember to take into consideration the topography, soil type and easements that may exist for the property.

On the other hand, you may be interested in purchasing land far from the hustle and bustle of a typical subdivision, perhaps in the mountains, on a lake or near the beach. Purchasing vacation land can be a little trickier, since it will be more expensive and if financing is needed, banks often require a down payment of 30% or more. Keep in mind that vacation land can increase in value faster than other raw land, so you can flip your investment in just a couple of years and make a tidy profit.

You may also want to consider purchasing property that carries with it an agricultural tax exemption. If you obtain the mineral rights when you purchased the land, it will include everything grown on the land or mined from the land. Tax exemptions may be allowable for land used for the production of crops, including both orchards and cut timber, livestock and similar agricultural operations. Check with your local zoning board for more information and the necessary applications. You may also wish to purchase land to be traded later as a development credit or "TDR" (Transferable Development Right), which is a form of incentive for developers in which the developer purchases rights to an undeveloped piece of property in exchange for the right to increase the number of dwelling units on another site.

Land investment can take many forms. If you want an investment opportunity which requires low investment, high ROI (Return on investment) and pride of ownership, land may be the best option. Many people invest in land to diversify their portfolios and as a hedge against inflation. Today's uncertain economy reaffirms the idea that investing in land is a good way to protect your financial assets.

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Wolfgang O has 1 articles online

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Profit Today by Investing in Land

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    Jason Dee- 2010/10/29 12:29:57 pm

    I completely agree with your posting. All real wealth in the world was created through buying and selling real estate. My company specializes in just the type of land you have discribed here, being un-inflated, seller financed at a reasonable rate, high annual growth rate(10%-120% depending on project), in the path of future progress, and easy access to each lot. All of our lots are zoned agriculturally as to save on property taxes and sub-divided into affordable five acre lots. A great way to use this type of leveraged asset is to buy it inside a ROTH IRA and grow it tax free!!! My company even provides a ten percent match towards priciple reduction for every dollar paid toward your lot, Also as mentioned in your post all water and mineral rights are available. email me with any questions: jason@hotspotinvestments.com

This article was published on 2010/03/31