Investing in land is something that provides you, the investor, with a tangible asset. Property tends to increase steadily with the price of inflation or go up in value even more rapidly in rural and undeveloped areas. Investing in land with developments may be somewhat riskier. However, there are still plenty of regions where land investment is a safe place to put your money.
1) Residual Income
Cropland rents for 100 to 200 USD an acre, on average. Pasture rents for 20 to 30 USD an acre, on average, according to the USDA.
- Hunting rights,
- development rights, and
- other opportunities can make investing in land a profitable opportunity.
It can also provide you with the opportunity to develop that land yourself in the future. It is relatively easy to find hunting property for sale or other undeveloped land parcels that are already perfect for many income opportunities with little to no development on your part.
2) Reduced Taxes Compared to Other Investments
With state and federal programs for land reserve and “set-aside”, it’s possible to not only have zero property taxes but even to be paid to leave the land you have purchased alone. You can still hunt, forage, and use the land in these programs as a grazing area in many cases.
This allows you to have a virtually hands-off investment that costs you nothing after your initial investment. Then you could sell hunting, grazing, or forage rights. Further, by setting the land aside for these purposes, you are helping bolster the local environment.
3) Protecting the Environment
Investing in land isn’t just good for your financial future or investment portfolio. It can also help protect and safeguard the environment.
- By buying land and placing it in a set-aside program, or
- by allowing a conservation agency to develop it on your behalf for a set number of years…
…it will help protect invaluable natural resources.
4) Land is Tangible Investment
People can buy and sell stocks, and even currency electronically, but property remains a tangible asset. It holds value and cannot lose that value due to a computer glitch or a new piece of technology. Land is the same as it has ever been. Though with the human population rising steadily and there being no “new” land creation, its value is steadily increasing over time with good care.
5) High Availability, Lower Competition, Great Potential for Value Increase
Farmland of all kinds has been going up in value, keeping pace with inflation and more, for the last two decades. Since 2003, a single acre of farmland is now worth, on average, triple what it was worth then. This is true for both crop land and the less valuable “pasture” land.
With the 1.89 billion acres of land that make up the United States of America having a total value of at least $23 trillion, investing in land allows you to take advantage of an asset that will never increase but may, in fact, decrease over time, driving up its value.
Are You Ready to Start Investing in Land?
Investing in land won’t make you wealthy overnight, but it’s often a much better investment than a savings account…even a high-interest savings account! And quite honestly, the risk might actually be less. No one can physically steal the ground, and there’s a very low likelihood of your property being damaged. Once you buy it, you know where it is and what it is. It’s pretty basic stuff.