Why Buy Land Now?

Buy low and sell high. This advice is so basic that even first-time investors understand it without being told. Whether you are keeping your land to sell later, or buying it as a site for your dream home, the best time to buy is when prices are low.

Although historically land values rise at a slow but steady pace, every form of investment has its ups and downs. Rising interest rates result in home foreclosures which lead to people getting scared and selling their real estate investments, often at undervalued prices. Savvy investors see this trend and begin to snap up terrific land deals, which causes prices to rise again, higher then they were before the initial fall. It is a cycle that is repeated over and over again. But through all the cycles, land values do tend to rise over time. Historically, most land values will double in the course of 10 years.

This slow but steady rise is one reason why real estate investment is so popular with long-term investors: people who want as much of a guarantee as they can get that their investment will remain secure. In his article of November 16, 2007, Jim Jubak of MSN Money had this to say: “Land is a particularly attractive investment for investors looking for long-lived assets to match long-lived obligations. That’s a group that includes all of the world’s pension funds, the entire insurance industry, and the new sovereign investment funds set up by Russia, China and other developing economies with big foreign-exchange balances to invest. The group also includes anybody – yours truly for example – who’s planning for a retirement 10 years or more away and that, we all hope, is likely to stretch on for a decade or two or three.”

During times of economic uncertainty, many people look to the security that land investment represents. As long as the property is well researched, there is very little risk in land investment. As America’s population grows and spreads out, land is something that everyone wants and there is only so much to go around.

Robert Agathon, Regional Vice President of Spectrus Real Estate Group talked on this point in an article for Office and Commercial Magazine, “As long as growth occurs, buying a piece of land in the path of growth insulates owners, at least partially, from real estate market ups and downs.” He also put the same thought another way: “As long as a piece of land exists in the path of growth, there will always be a demand for it.”

If you have decided that land investment is right for you, the best time to buy is when prices are down. Now is the time when you can find truly exceptional deals and make the most out of the money you spend.