Why adding land to your portfolio is a good investment - 15 (+1) Reasons

Did you know that there are 2.43 billion acres in the United States of America? And of those acres, there are millions of them for sale by thousands of sellers across the country. The last time I checked, there were over 250 million listings for people selling their land.

I bought my first piece of land in 2009, and it has been one of the best investments of my life. We have built a beautiful home on it, and with solar and it well, we are completely self-sufficient. That’s not to mention the increase in the value of the land over the last 10 years.

Over those last 10 years, we have been building our family legacy on this piece of land. We are watching your family grow and have experiences that many will never have simply because my kids live on 5 acres.

When I decided to get into the land business in late 2018, it was to help others build their family legacies as well. Are guiding principle and ultimate goal is to help our customers find the perfect piece of property to start building their family legacy.

While we believe building a family legacy is important, that is by no means the only reason owning land is a good idea. Let me share with you my top 15 reasons why we believe owning land is one of the best investments you can make to your family legacy and your portfolio.

So without further ado and or fluff, here go!

15 +1 reasons to own land.

1: It is a Tangible Resource: So, how much have you lost in the stock market over the years? Yeah, me too. With land, however, it is a physical resource that you own. Short of the vegetation being burned off of it (I live in California, where that is more common than one would care to admit), the land will always be there. Should money all of a sudden become valueless, your land would remain a tangible real asset. In the apocalypse, build a fence to keep the zombies out, and you can live off your land.

2: Portfolio diversification: Land is one of the only asset classes that rarely goes down in value. While it may not increase in value as fast as some other asset classes, it typically always goes up. As William Pen Adair once said...

“find out where the people are going and buy the land before they get there“

With a bit of research, and we do a lot of that for you, Find the areas that people are buying land in and get some for yourself. Your investment will go up.

3: The rich and famous sent to: I’ll leave the explanation of this to some notable historical figures who are way smarter than me. First up, Mr. Mark Twain said...

“own land, they aren’t waking it anymore.”

Or Louis Glickman;

“The best investment on earth, is earth.”

Next up;

"Ninety percent of all millionaires become so through owning real estate." ~ Andrew Carnegie.

And last but by no means least;

"Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world." ~ Franklin D. Roosevelt

4:Less Competition: “ I just got outbid on this home again! This is the third house I’ve tried to buy, and somebody keeps coming in and outbidding me“ This was the start of the conversation I had with a buddy of mine not too long ago. When it comes to land with structures on it, there is way more competition than vacant land. I have not heard of a bidding war to get a piece of land. Last time I checked, there was not an HGTV show called Flip This Land :-)

5: Low barrier to entry: As we mentioned above, land is seen as the ugly, red-headed step Child (can I say that? Oh well) of real estate world. Again, that is fine by me! This low competition helps to keep the initial investment into land low. I bought my first ½ acre plot of New Mexico soil for a mere $250. Yup, you read that right. I only paid $250 for a ½ ( 21,780 sq ft) lot of land. I held onto it for a bit and sold it for $1000. That’s a nice 300% return.

6: No Stress Investment: Land in its natural state is just that, land. It can never be destroyed, stolen, or forged. Now, the trick is to buy land that can have “something” done to it in the future. Like, building a house. This will ensure that your land will always hold some sort of value. The other nice thing about Land, there are no toilets, termites, or tenants. Land is about the lowest-stress real estate investment you can make.

7: Low Maintenance Costs: Contrary to popular belief, once you make the initial investment into a plot of land, the maintenance costs are quite minimal. Unless you bought in a subdivision that requires crazy vegetation management practices, ongoing ownership of land can be cheaper than your Spotify monthly subscription. I owned a 40-acre lot at one time in Elko County, Nevada. The annual taxes on that puppy were a whopping $156 per year. Or $13 a month… last I checked, I pay $15 a month for my Spotify privileges. When it comes to property taxes, it is the structure and improvements to the land that raise that property tax rate. Owning a simple piece of vacant land is literally cheaper than dirt.

8: Land is Not Subject to some Government Real Estate Regulations: In 2008, the Safe-Act was enacted as a response to the mortgage crisis and slurry of "creative" mortgages. Then in 2010, President Obama implemented the Dodd-Frank act that applied a multitude of rules to the real estate arena. Here is the cool part… none of these regulations applies to vacant land. No lawyers needed to buy a piece of land in most states. (I’m not a lawyer, so I guess I have to say something like you should consult legal counsel, blah, blah, blah…) what does this all mean for you? It means a ton of money saved! No realtors required to buy a piece of land. Simply find someone willing to sell their land, and with a few signatures and a notarized new deed, the land is yours

9: Great Long-Term Hold Investment: I’ll make this simple. Buy in the path of development. Go online and find a video that shows you a time lapse of the growth of an area over time. Now, try to use some common sence and logic to forecast where growth may occur. They aren’t making more land, but we are making more humans. Buy land in areas that may possibly be developed in years to come.

10: Land Increases in Value: I can’t say that every piece of land will increase in value, but the vast majority will. Especially if you did your homework and bought in an area that has the potential to grow.

11: Land is Plentiful: The last time I checked, there were over 220,000,000 acres of land for sale in the US. Something tells me we’d all run out of money before we run out of land to buy.

12: Builds a Family Legacy: We all, on some level, want to leave some sort of legacy to our offspring. Giving the gift of land and part of an inheritance is one of the more thoughtful bequeaths one can make. By owning land, you are helping to set your family up for the future. Do note; Please be sure you set up some sort of legal will or trust to ensure that at your passing, the transfer of that land to your hairs will go smoothly.

13: It’s the American Dream: To quote William Wallace; "Freedom!" Like Wallace, that is what every brave American soldier has fought and bled for. It is what our founding fathers envisioned when they fled Britten in the hopes of creating a new world. When you own land, you own your freedom.

14: It’s Cool: Okey, ego check. You’ve gotta admit; it would be cool to casually mention to your friends that you own land in (insert areas here) and watch the envy slowly creep across their faces. All of a sudden, you are now the smart one that has taken their legacy/portfolio planning to the next level. You just made yourself the go-to guy for financial advice. Way to go!

15: You can do anything with it: What you can do with a piece of land is limited only by your imagination. I challenge you to let your imagination run wild. Just stop and think for a minute, what is my wildest dream? Do you want to build a motocross park all for yourself? I once sold a 5-acre lot to a client that did just that. Are you looking for a weekend getaway with no cell phone coverage so you can truly escape the 9-to-5? No Problem, I can find you that piece of land. Looking to invest in a future homestead or ranch? No problem, you can find you 160 acres for less than $100k grand. No matter your budget, yu can find a piece of land to call your own.

16: The zombie apocalypse: Who doesn’t love a good zombie movie? If the zombie apocalypse ever happens, owning your own off-grid 40 acres might just come in handy. Throw up a quick fence, dig a well, grab one of those portable solar units, and you are set. That may sound crazy, but for the preppers among us, it’s not as far-fetched as you think.

Bringing it home

As you can see, there are a number of reasons why owning some land is a good investment. I’ll leave you with one more. It’s fun! It’s fun to sit around a table with your family and dream. It's fun to pack up the family for that weekend camping trip to that mountain acre, pitch a tent, and check out the stars.

Or maybe you are looking to build your dream home on a canal or beachfront in Florida. No matter your dream, there is land out there for you. And it's probably more affordable than you realize.

Here at Legacy Equity Properties, we both buy and sell a lot of American land. If you are looking to sell or invest, we can make that process straightforward and painless. We'd love to hop on a call or chat via email or text to see what we can do for you.

Cheers!