When should I start buying land as an investment

Land is through and through a strong investment in Real Estate whether you are looking to just hold cash somewhere or you are able to finance and enter into a farm lease to cover the note.  Either way land is by far the safest of all the Real Estate investment sectors.  Of course land is one of the most difficult investments to buy and own but once you become a land investor, you will wonder why anyone does anything else.

So when should someone start buying land as an investment?  My short answer is when you have enough cash in the bank that you can buy a parcel of land and not rely on that cash in the near future.  Land is a long term play for the most part but can also be thought of as a savings account or retirement plan.  Buying land to flip or develop is completely different then what we are speaking of here.  Development land in hot markets is fantastic and can make a hefty profit but many times it is too difficult to time the purchase just right as to not be carrying an expensive piece of property until it is ready for development.  Buying farm land is the thought of buying a stable investment that rarely drops in value over time and will eventually provide a fantastic asset for retirement or generations to come.

A great way to buy farm ground smart is to just start looking.  Hop in your SUV and drive north 10 minutes past the next community and then cut back into the side roads.  You will see 1000’s of acres of farmed land that is being used for annual crops and typically leased by these farmers at a fair market value.  These farms are stable, appreciate over time and seem to always have a buyer down the road.  While you may buy a tract of land for $10,000/acre and in 20 years that land is worth $35,000/ acre and if you get lucky a highway or development will plop down next to the property and make your land worth even more.  But the entire time it is managing itself and being farmed with very little additional cash needed to maintain.  If you want to buy even larger tracts you can head out into the country or out west even and buy where the land values hover just below $4,000/acre and are some of the riches farm grounds in the nation.  Farmers flock for good land and pay handsome lease rates to have access to them.

Buying land is in no way exciting or flashy but neither is a mutual fund or life insurance policy, neither of which I am a big fan of.  Land ownership on the other hand is a terrific way to take your cash reserves and place them in an investment that will not only hold its value but create a small amount of rental income and not fall victim to vacancies, capital improvements or recessions.  The land just sits and appreciates and you sleep well at night that the money earned is coming to your and your family.  Buy land if you can and think long term as you plan for the next 20 years or generations beyond.

-curt

Curt has been in the Indianapolis Real Estate business for over 10 years and spent his first years learning all aspects of commercial management and brokerage.  He has had great success in managing existing commercial projects and new retail and office developments.  Curt specializes in building owner representation and purchases in the Westfield Indiana market as well throughout the Indianapolis Metro area.  Curt is passionate about growing the local Westfield community and in his free time  volunteers with Westfield Youth Assistance and raising 2 children with his wife Jennifer.