Archive for April, 2010

How to Profit with Land

Various approaches to investing in land can range from “expensive and risky” to “affordable and safe.” On the “expensive and risky” side, let’s say a person purchased five acres on the outskirts of a growing city for $435,600 ($2 per square foot) with the intent of rezoning the land and developing a residential subdivision. This is a high-risk approach for the following reasons:

Rezoning might not be successful.

Financing might not be available to construct homes.

Loans may not be available for people to buy the homes.

The economy may weaken, causing demand for homes to evaporate.

The end result might well be a total loss.

On the “affordable and safe” side, let’s say a person did nothing but acquire 500 acres of rural land for the low price of $125,000 (only $250 per acre) with the intent of holding the land for some years into the future. This approach would be much less risky. In fact, history has proven that it is literally impossible to lose money by owning land if it is purchased cheaply enough and held long enough.

Suppose in 1920 (90 years ago), a grandfather had been given the choice of placing a sum of $100,000 in one of the following investments:

Studebaker stock (one of the leading Dow Jones stocks of the day);

United States currency; or

The deed to $100,000 worth of rangeland (20,000 acres worth $5 per acre), which he would place in a safe deposit box to be opened by his grandchildren 90 years later (in 2010).

Which asset would be worth the most to his grandchildren today (in 2010)?

Studebaker stock certificates would be worthless; the company went out of business and no longer exists!

$100,000 cash in the year 1920 has the same equivalent buying power today (2010) of only $10,000. In other words, inflation has robbed the dollar of 90% of its buying power in the last 90 years)!

20,000 acres of rangeland would be worth at least $5 to $6 million!

Buying cheap acreage and hanging on to it through the years might not be the fastest way to make money, but it could be one of safest and surest ways!

To view some spectacular cheap acreage investment opportunities, CLICK HERE.