Archive for the ‘Cheap Acreage Speculation’ Category

Benefits of Cheap Wyoming Land

In order to have the best chance of making money investing in rural land, three conditions are required.  First, a large supply of acreage is needed. Next, the prices must be relatively low. Finally, there must be a minimum of restrictive zoning and land use regulations in effect. Of all the states, perhaps cheap Wyoming land offers the best opportunity in this regard.

Only the larger Western states would offer the first criterion, but only Texas, South Dakota, and Wyoming combine the last two conditions of relatively low prices with a minimum of restrictive zoning and land use regulations. South Dakota and Texas basically have very few subdivision regulations, and Wyoming land is exempt from subdivision control if sold in 160-acre sizes or larger.

New Mexico has a large supply of relatively low-priced acreage—but there are restrictive subdivision regulations. Arizona land is priced too high. Nevada land is relatively low-priced, but state laws prevent the division of land into smaller than 640-acre sizes. Land in Colorado, Idaho, Montana, Oregon, Washington, and Utah is all higher priced, and in addition, these states have restrictive subdivision regulations. Alaska, surprisingly, is also higher priced and contains more restrictions that Wyoming, Texas, or South Dakota. Furthermore, Alaska can be extremely cold and frozen, and it isn’t considered that easy to access by people in the lower 48 states.

Wyoming, however, has it all! It is relatively easy to get to; land prices are among the lowest in the nation; there are no subdivision regulations for land 160 acres in size or larger; property taxes are very low; and there are no state income taxes.

Those interested in low priced rural land certainly need to investigate all the opportunities available with cheap Wyoming land!

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Wyoming Land for Sale at a Cheap Price

Most Wyoming real estate investors take the traditional approach of acquiring land near population centers, like Casper or Cheyenne, and then rely on future development to increase property values. Simply buying a large tract of Wyoming land for sale cheap, located in a sparsely populated area of the state, and allowing time and inflation to create higher values, probably would be boring for them.

The latter approach might be boring to some, but it is an infinitely safer and more reliable method of making money, over the long term. Consider that nothing has to happen, and the owner doesn’t have to improve or develop anything, in order for a tract of cheap acreage to increase in value in future years. It has been proven time and time again that through the years, paper currency always becomes worth less and less, and finite assets such as land always become worth more and more. Therefore, time becomes the ally when buying and holding cheap land.

Conversely, there are countless cases where real estate investors have acquired expensive land near major cities, only to go bankrupt when the economy took a nose dive, politics prevented a needed zone change, building plans weren’t approved, or the financing suddenly became unavailable. While it is certainly possible for urban developers to make substantial sums of money over a short span of time, there usually is a lot more risk and turmoil involved.

Buying a large tract of Wyoming land for sale cheap, even in the middle of the remote Red Desert, and hanging on to it for many years, is almost a “no-brainer” to create greater future values. As history has proven, it is virtually impossible to lose money owning cheap land, if it is purchased cheaply enough and held long enough!

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Where is the Cheapest Land in Wyoming?

Is there any other place besides Wyoming in the entire United States of America where one can find more land for less money?

The reason Wyoming presents such interesting investment opportunities is that there is a large amount of “checkerboard” land ownership in the state. The “checkerboard” ownership in Wyoming is among the largest of all 50 states.

A little history: The Pacific Railroad Act of 1862 was approved by the United States Congress and signed into law by President Abraham Lincoln for the purpose of aiding the construction of railroads from the Missouri River to the Pacific Ocean. This bill gave 10 miles on either side of the tracks to the railroad companies to help offset the cost of construction. The Pacific Railroad Act of 1864 expanded that distance to 20 miles on either side of the tracks. The United States Government retained half of every township given to the railroads by keeping alternate sections. This resulted in the ownership of these townships resembling a checkerboard, with every even-numbered section owned by the government and every odd-numbered section owned by the railroads. Over the years, the railroads resold a large portion of their holdings to private individuals.

For private owners of land in the checkerboard, there is a disadvantage offset by a huge benefit. The disadvantage is that it is almost impossible to secure “insurable access” through federal property; therefore, power and utilities are seldom available, and banks won’t loan for construction where there isn’t insurable access. “Physical access,” however, is a different matter. The government has never blocked access to private property since the Pacific Railroad Act of 1862 was passed; and furthermore, title companies will insure ownership of private land in the checkerboard.

The huge benefit for private landowners in the checkerboard is that “the public can’t cross private land to get to public land, but private owners can cross public land to get to private land.” This amazing policy means thatprivate owners can access millions of acres of public land that the general public can’t get to, enjoy or even visit (because to do so would constitute “trespassing” on private property)! This unique ownership feature, coupled with a low purchase price, makes checkerboard land an asset that can offer substantial future potential.

The cheapest land in Wyoming can be found in the southern part of the state along the I-80 corridor. If you know where to look, land in this area can still be purchased for less than $250 per acre, but these prices are rapidly disappearing.

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The Correlation between Inflation and Cheap Land

What is the correlation between inflation and cheap acreage? Inflation is basically the result of more and more paper currency being printed, that competes for the same existing goods and services. Land, however, can’t be created or printed. Thus, you have the case where more and more paper currency causes it to become worth less and less, while land, because it is in finite supply, becomes worth more and more.

The above hypothesis can easily be tested by reviewing historical data. Let’s take the case of a person who lived in the United States 75 years ago, in the year 1936. This was during Franklin D. Roosevelt’s presidency, and a few years before World War II. In 1936, houses sold for $3,900, new cars for $700, a loaf of bread for eight cents, and gasoline for 10 cents, and the average wage was around $1,700 annually.

Now, let’s assume that this person inherited, in that year of 1936, the sum of $10,000 cash. Let’s further assume that this person wanted to pass the money down to his heirs, to be paid out 75 years later, in the year 2011. But the person couldn’t decide whether he wanted to pass down the $10,000 in cash or buy the cheapest 10,000 acres he could find in the nation and, instead, pass the acreage down to his heirs. In 1936, he could easily have found cheap land for $1 per acre, and thus he could have acquired 10,000 acres for the $10,000.

Would the heirs be better off receiving the $10,000 cash or the 10,000 acres?

Had they received the $10,000 in cash, it wouldn’t have been much of an inheritance. That sum of money in 2011 didn’t have nearly the same purchasing power that it possessed in 1936. In fact, by 2011, the $10,000 would barely support a family’s meager lifestyle for 90 days.

The 10,000 acres, however, would be an entirely different matter. Depending on where the land was located, the 10,000 acres would be worth anywhere from $2.5 million to $10 million, or more!

In summary, the above clearly demonstrates the direct correlation between inflation and cheap land. Through the years, paper currency always depreciates in value, and finite assets like land always appreciate in value.

To view cheap land that can be a hedge against inflation, please click here.

Cheap Acreage Investments

Cheap acreage investments have very little to do with what the land is zoned for, what it can be used for, where it is located, whether there are utilities available or not, whether crops can be grown or not, whether water is available or not, or even if there is a road to the property or not. Instead, these investments have everything to do with price, price and price!

There are countless historical examples of farmland with irrigation systems that was purchased for what appeared to be excellent bargains. Yet crop prices collapsed, demand slackened, operating costs increased, and banks were forced to foreclose on the property. There are also many examples of fully improved lots bordering growing cities that suffered huge price depreciations when an economic recession hit, zoning wasn’t approved, and financing for development dried up. Finally, consider income properties (such as apartments, office buildings, and shopping centers) that were purchased for fair prices, but eventually were foreclosed on because of poor management, excessive maintenance expenses, and vacating tenants.

Conversely, the lowest priced land that can be purchased in the United States of America at any particular time will always, and invariably, be worth more money at some future date. There can be no example shown in the history of the United States where this isn’t true! But the key is to buy the land cheaply enough and to hold it for a long enough period of time. Again, notice that this has nothing to do with where the land is located, the use of the land, the zoning of the land, improvements on the land, or roads to the land—rather, it has everything to do with the initial purchase price of the land!

All investment theories should be tested against solid historical facts. In this case, that becomes quite simple. When the United States was founded in 1776, land was valued in the “wild, unexplored West” (the region extending from the original 13 colonies to the Pacific Ocean—none of which was even part of the new nation at that time) for as little as five cents per acre. Obviously, this land wasn’t improved and had no utilities, no water, and no roads. Now, 235 years later, much of this same land is still unimproved, with no utilities, no water, and no roads. Yet today, it is very difficult to find any of this land for under $250 per acre. So without anything whatsoever being done to the land, it increased in value from five cents per acre to $250 per acre—an increase of 5,000 times!

Fortunately, people interested in cheap acreage investments don’t have to wait 235 years for a payday. But they do have to buy the land cheaply enough, and then relax and wait for at least a few years. There are ways to make money faster, but few that are safer or more predictable!

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Acreage for Sale at Cheap Price is Disappearing.

Acreage for sale cheap is something that the United States of America has very little of anymore. While there is an abundance of land available for sale, it can hardly be called cheap. Land that can be purchased for under $500 per acre is rapidly disappearing.

The very word “acreage” is a common American term that simply refers to multiple acres. An acre contains 43,560 square feet. A lot measuring 200 feet wide and 218 feet long is basically an acre in size. Our entire nation was surveyed into townships containing 36 sections, with each section containing 640 acres.

In Europe and South America they use “hectares” as a land measuring unit, as opposed to acres.  A hectare basically contains 2.5 acres, thus four hectares would be approximately 10 acres. A 50,000 acre Texas cattle ranch being advertised for sale in Europe would be viewed by the Europeans as a ranch of 20,000 hectares.

Regardless of how one views the measurement of land, it is pretty hard to lose, over the long-term, by acquiring large tracts of it at cheap prices and holding for the long term. Large tracts of acreage for sale cheap, located anywhere in the United States of America, present an opportunity that many astute investors would investigate quite closely. After all, land can’t be stolen, destroyed, or mismanaged, and no one can create any more of it!

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Where is Cheapest Land Per Acre in the United States?

Where, in the United States of America, is the cheapest land per acre? Depending on various circumstances and the urgency of any given seller at any particular time, the answer would be somewhere in Nevada, Wyoming, Texas, or New Mexico. In these four states, land can still be acquired for under $200 per acre, and in some very rare instances, for under $100 per acre. In no other state in the union—be it Arizona, Alaska, Colorado, Montana, Idaho, or Utah—can land be found for such low prices.

Occasionally, a section of land (640 acres) will be advertised for sale in Nevada for $80 or $90 per acre. However, the transaction will involve a large down payment or all cash terms; the section is basically landlocked without legal access; there are no mineral rights involved; and Nevada state statutes forbid the division of the land into smaller parcels for resale with expensive and time consuming subdivision requirements.

In Wyoming, 160-acre tracts can still be found for $199 per acre, with small down payments and easy seller financing. These tracts also involve checkerboard land where federal lands have to be crossed for access. Technically, mineral rights aren’t included, but often, exploration companies provide surface owner agreements giving the landowner 2.5% royalties.

Occasionally, land in New Mexico can be found for under $200 per acre, but terms are usually all-cash and state subdivision regulations are not conducive to splitting or reselling the land.

Texas still affords opportunities to acquire 160-acre to 640-acre tracts for as little as $200 to $299 per acre, with excellent seller financing. As in most petroleum producing states, there will be no mineral rights, but there will be recorded and insurable access, and state subdivision laws are very lenient.

In summary, acquiring the cheapest land per acre—regardless of having no mineral rights and regardless of having to cross federal lands—has historically proven to be very financially rewarding over the years!

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Inexpensive Acreage for Sale in America

Twenty-five years ago, major newspapers throughout the United States carried quite a few advertisements regarding acreage for sale—a term generally used to describe large tracts of land. Today, it is becoming more and more difficult to find large tracts of land for sale, especially cheap acreage.

For investment purposes, large tracts of rural land are often overlooked in favor of the stock market. This is unfortunate, because low-priced land has outperformed the stock market over the last 40 years. Today, the Dow Jones is approximately 11,000, about 13 times the 1970 level of 838. In 1970, newspapers in Texas, Wyoming, South Dakota, New Mexico and Nevada carried many advertisements regarding acreage for sale at $15 per acre. Today, it is rare to see classified ads in these same newspapers offering land for less than $350 per acre, about 23 times the 1970 price. Perhaps more important is the fact that many Wall Street stocks of 40 years ago went out of business and no longer exist, while every single acre of land that existed in 1970 is still here today and is worth substantially more money.

The wonderful thing about land is that it is a finite supply, and it can’t be reproduced, manufactured or created. Today, the population of the United States is around 300 million, and by the year 2050 the population is projected to increase to more than 400 million. Yet not one new acre of land will have been created

The other amazing thing about land is that no one can predict—with absolute certainty—what the future will bring as to values or what new uses will be discovered. For instance, 75 years ago who would have imagined that wind farm developments, solar energy projects and communication towers would create substantial cash flow for rural land owners?  What kinds of opportunities might materialize in the future?

People should keep their eyes open for good deals in acreage for sale. It is an exciting asset to own, is certain to be here in the future and can lead to unforeseeable uses and future profits.

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Cheap Acreage Speculation

Large tracts of unimproved land priced at just a few hundred dollars per acre — located in states like Texas, New Mexico, Utah, Nevada, Wyoming and the Dakotas — can provide tremendous long term potential. The dictionary defines the word “speculation” as “a business venture offering the possibility of a large profit but entailing risk.” However, history proves it is virtually impossible to lose money by owning land, if it is purchased cheaply enough and held long enough.

Cheap acreage speculation in the United States today is a real estate niche that is largely overlooked. That is unfortunate, because this activity can produce substantial profits without all the operating complexities and troublesome business cycles associated with residential, resort and commercial developments. Cheap acreage appreciates in value due mainly to inflation, instead of having to depend on rezoning, approval of development plans, financing and so on.

Inflation means that through the years, paper money is worth less and less and finite assets like land are worth more and more. Inflation is caused when a government prints trillions of new dollars, which results in the depreciation of existing dollars. At the same time the dollar is being depreciated, land is appreciating– because not one new acre can be created.

An example of the effect of inflation would be 5,000 acres of grazing land located in the “middle of nowhere” purchased 20 years ago (in the year 1990) for $30 per acre. Today the 5,000 acres would look exactly the same as it did 20 years ago; the use of the land would still be cattle grazing; zoning would be the same; there would be very little population growth in the area; no oil would have been discovered; no roads would have been built, and no development of any kind would have taken place. Yet the same 5,000 acres would now (in the year 2010) be valued at close to $250 per acre. Thus the initial price of $150,000 would have grown to $1,250,000 in 20 years, representing an eight-fold increase. And the amazing thing is that the landowner did absolutely nothing to cause this increase.

How did the stock market perform over this same period? In 1990, the Dow Jones was 2900, and today it is around 10,000, a little over a three-fold increase. What about the value of cash over the same 20 years? According to the U.S. Bureau of Labor Statistics it takes $165 today to buy the same goods and services that $100 purchased back in 1990. This means that inflation robbed the dollar of 40% of its purchasing power in just the last 20 years.

There are countless business people in the United States today who, with brilliance and fortuitous timing, have made huge sums of money in various enterprises. However, speculating in a large tract of cheap acreage just might represent one of the surest and safest long-term assets a person can own!