Land Investing

5 Reasons to Invest in Land for Financial Gain

By: Robb Brooks
Posted: May 3, 2022

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Using land as an investment can be a great way to diversify your portfolio and increase your returns without increasing your risk exposure. Here are 5 reasons why buying land for investment purposes may be right for you.

1) Real Estate Only Goes Up

Residential lots for sale and land for sale have historically appreciated at a rate above inflation—meaning investing in land as a valuable long-term investment is a sound financial move. If you’re looking to purchase property, start by identifying who will be using it (buyers) and which amenities are available (purchase price). Once you’ve found an ideal piece of land, set aside time to negotiate with sellers or contact an investor or real estate broker (realtor) who can help close the deal.

2) You Can Save Money on Taxes

You’re not allowed to deduct real estate property taxes on your income tax return, but you can still save money on your taxes by purchasing land and taking advantage of depreciation deductions. Depreciation is an expense deduction based on how much a business or investment property loses its value over time. Land has a very low, fixed rate of depreciation; every year you can deduct one-eighth of its value against income or capital gains tax.

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Robb Brooks

Land Bankers, Inc.

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3) Increase Property Value

Buying a plot of land as an investment can increase your property value significantly. This can happen either because you intend to build something on it at some point, or simply because you believe that real estate prices will rise. Land is a great investment tool if you’re looking at short-term gains, but don’t expect it to earn interest over time like a CD or stock.

4) Part of Your Long-Term Investment Plan

The average person’s investment portfolio includes some stocks, bonds, and maybe even a little cash. Those are all great investments and will help you build wealth over time. But an overlooked part of your long-term investment plan could be adding land to your portfolio. Land can provide steady gains over time, offering security and a way to protect your other investments during market downturns. Here are five reasons why land is a solid long-term investment that should be part of every investor’s plan.

5) Everyone Needs a Place to Live

Real estate remains one of most stable assets. While price fluctuations occur, that’s true with any asset. There is no shortage of land on Earth and you will continue to need a place to live; if you invest in residential lots for sale, land for sale, or land for sale by owner – it’s a smart move long-term. Prices have only increased over time, so buying land today will likely mean big profits down the road. Buying and selling land can be lucrative: If you have a steady hand and some money to spare, buying and selling land could be an excellent way to make money quickly. Residential Lots for Sale: You can buy residential lots in many areas of North America at very reasonable prices right now—and potentially make large profits later as values increase over time.

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