Archive for the ‘"Cheap Land" is a Relative Term’ Category

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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Cheap Wyoming Land for Sale

In the late 1800s, the history of Cheap Wyoming land for sale was interwoven with the attempt of British aristocrats to create cattle grazing empires. The British were enamored of the new American cattle industry and the potential of utilizing public rangeland. The appeal lay in the fact that private land wouldn’t have to be purchased. These operations were financed by establishing public companies in England and Scotland, with prominent aristocrats serving on the boards of directors.

In 1878, Moreton Frewen was among the first British aristocrats to arrive in Wyoming. His wife was Winston Churchill’s aunt. Flush with money inherited from his father, he settled in northeastern Wyoming and founded the Powder River Cattle Company. For a few years his company grew rapidly, and he grazed 30,000 head of cattle on the public range.

Horace Plunkett, whose father was Baron Dunsany, founded the Frontier Land and Cattle Company. Plunkett’s grazing operations were also quite profitable in the early years. Again, however, instead of buying private land, he relied on free, open rangeland.

British investors started dozens of other cattle companies, but the largest was the Swan Land & Cattle Company, organized by Scottish bankers in 1883. Initial capitalization included almost 100,000 head of cattle and approximately 500,000 acres.

The profitability of these ranches in the early years was astonishing. A three-year-old steer cost $10 to raise and would bring $30 at market. Overall, the annual ROI ran between 20% and 40%. Such financial results made a strong impression on stockholders back in the British Isles.

Within a few short years, however, hard times arrived.

  • First, the open range became overcrowded and uneconomical.
  • Second, the extreme winter of 1886-87 depleted the herds.
  • Third, the marker price for beef cattle declined.

The moral of this story is that business cycles—and cattle—come and go, but land lasts forever and always increases in value through the years. So the British aristocrats should have put their money in private Cheap Wyoming land for sale, instead of relying on free rangeland.

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What are Cheap Land Investments?

The definition of cheap land investments would be tracts of rural acreage purchased for a few hundred dollars per-acre. Such properties would be located in the “middle of nowhere” in several of the large Western states: Wyoming, Texas or South Dakota. Cheap land investments are often overlooked but can be very exciting and financially rewarding.

Other than their homes, the most common assets held by Americans today are bank accounts and stocks. First, let’s discuss the safety factor – how safe is cash in banks and how safe are stocks? For the most part cash in banks is very safe as these deposits are insured by the federal government. Regarding stocks, they can go up, go down and go bust, wiping out stockholders. Simply consider the fate of General Motors, one of the most popular stocks of all time.

Next, let’s review the investment performance of both cash and stocks over the last quarter of a century, or 25 years. According to the U. S. Bureau of Labor Statistics it takes $2,028 in 2010 to purchase the same goods and services that $1,000 purchased a quarter of a century earlier in 1985. Thus over the last 25 years inflation has robbed the dollar of approximately 50% of its purchasing power. In 1985 the Dow Jones first broke the 1,500 barrier and today it is around 10,000, or 7 times higher than in 1985.

How safe are cheap land investments and what has been the historical performance for this type of asset? Cheap land investments are very safe because raw land can’t be stolen, can’t be outdated by technology, can’t be mismanaged, can’t be destroyed by fire and most important of all no more land can be made. Land is a finite commodity and among all assets is the only one certain to still be here in future years. In 1985 the cheapest land for sale in the United States was in the $10 per acre range and today, 25 years later, the cheapest land listed for sale is $178 per acre, or 17 times higher than in 1985.

There are various investments that can make substantial sums of money in a fast period of time such as large scale stock operations, commodity speculations, oil and gas wildcatting, sophisticated hedge fund activities and foreign currency trading. All of these, however, require huge sums of money and specialized knowledge and even then catastrophic losses can occur. In these financial ventures the human factor is involved and there are no guarantees of success or assurances that the asset will even exist in the future.

On the other hand there is a 100% guarantee that land will still be here in the future, and history has proven that it is lvirtually impossible to lose money owning cheap land if purchased cheap enough and held long enough!

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Benefits of Investing in Cheap Land!

The opportunity to invest in cheap land in America should be thoroughly and seriously explored. Cheap land is a very safe asset, and one that is certain to increase in value in future years. Cheap land can’t be stolen, destroyed by fire, outdated by technology or reproduced. All that is required for cheap land to increase in value is inflation and a greater population, both of which are inevitable. Following are just two historical examples to consider.

In the years between 1901 and 1907, the California Development Corporation attempted to build a water canal from the Colorado River westward into California’s Imperial Valley. The goal was to provide a source of irrigation and turn this dry, desolate and uninhabitable area into a subdivision of lush farms. Initially started by private promoters, the project was eventually taken over by the Southern Pacific Railroad with federal support promised by President Teddy Roosevelt. The United States Government owned most of the region, and was offering land for sale at $1.25 per acre. The project failed after thousands of acres were sold and millions of dollars lost, and in 1909, the California Development Corporation was liquidated.

So over the last 100 years, what has happened to land prices in the Imperial Valley? Much of the land is still without water, still desolate and uninhabitable, yet it is very difficult today to find land in the Imperial Valley for less than $1,000 per acre.

For a more recent example of people who decided to invest in cheap land, consider the corridor along Interstate Highway 80 in Wyoming, between the towns of Rock Springs and Rawlins. Local residents refer to the region as “barren and worthless.” Most of the cheap land in this part of the state is in the checkerboard area (ownership of alternate sections divided between the federal government and private owners), which eliminates development potential. Known as the Red Desert, the area has no power, water, utilities or maintained roads.

In 1990, land in the Red Desert could be purchased for as little as $15 per acre. Today, 20 years later, ownership is still divided between the federal government and private parties, the area still no power, water, utilities or maintained roads, and the zoning is unchanged. Yet this same “barren and worthless” land now sells for as much as $500 per acre.

For those who invest in cheap land, it is the per-acre price that is important, not the per-parcel price. For example, a 160-acre tract for $31,840 is far cheaper that a one-acre lot for $4,000. Why? Because the 160-acre tract is priced at only $199 per acre, and the one-acre lot is priced at $4,000 per acre. Ever since the Pilgrims landed in 1620 and Americans began migrating west, people have made fortunes buying land by the acre and selling lots by the parcel!

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Where can you Find Land Dirt-Cheap?

Recently, nervous investors have been jumping off the stock market rollercoaster and fleeing the deflating housing market. So the question is, where can a person invest now and be sure the value of the investment will increase, without the loss risks associated with other investments?

The answer lies in buying land dirt-cheap. Land in the “middle of nowhere” that’s barren and undeveloped. So how can the value of land purchased dirt-cheap increase?

Consider this example: In 1963, Robert P. McCullough, a Los Angeles real estate promoter, purchased 3,500 acres in an isolated area of the Arizona desert and began building Lake Havasu City. Initially, building lots were offered for sale at prices as low as $4,995 each. The city was programmed to attract 75,000 people by 1980. People ridiculed Mr. McCullough and called him a daydreamer.  When there was no stampede of people wanting to settle there, Mr. McCullough decided he needed a promotional gimmick. He purchased the London Bridge, and at a cost of $8 million, he had it shipped from England to Lake Havasu City.

Today, Mr. McCullough has been dead for many years, but Lake Havasu City, and the surrounding Mohave County, are booming and no longer in need of promotional gimmicks. The population of the county is 198,000, there is a community college, and lots can sell for as much as $200,000 and homes as much as $750,000 – all located on what once was land dirt-cheap.

Here’s a different example: Most of the far-western counties of Hudspeth, Culberson, Loving, Reeves, Jeff Davis and Presidio, in the State of Texas, are considered to be barren and worthless. This region is sparsely populated, and the infrastructure of utilities, power, water and roads is very limited. In 1990, you could purchase land dirt-cheap there for as little as $15 per acre. Today, the region is still sparsely populated and the infrastructure is still very limited. But now, this “barren and worthless” land sells for as much as $500 per acre.

What makes the price of land dirt-cheap rise? The answer is “time.” Over time, prices inevitably rise. If an investor can purchase land dirt-cheap and hold it long enough, the price could increase substantially. Land dirt-cheap is inexpensive to acquire and exciting to own, because no one can predict with certainty how that land may be used in the future or how much the value may increase.

In the last 100 years, many investments have disappeared, and their investors have been wiped-out. But every acre of land dirt-cheap that was purchased 100 years ago still exists and is valued at a higher price.
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Foreclosed Land for Sale in the United States

It is not unusual in today’s economic times for a person who previously purchased land to lose the land in default proceedings for failure to keep the payments current. When a lender repossesses the land and offers it for sale again, it becomes foreclosed land for sale. Often, the buyer receives an exceptional bargain because the previous owner already has paid in a considerable equity.

In other words, “One man’s loss becomes another man’s gain!”

A landowner might default and lose ownership for many reasons having nothing to do with the property. The owner might have lost his job; maybe there was an illness in the family; perhaps there was a divorce, or even a death. For these reasons, and perhaps others, ownership of the land was lost, yet the land itself represents an excellent value with great future potential. In other words, the owner’s financial situation “went bad,” but the land is still good.

On the other hand, there are situations involving foreclosures where the owner’s financial situation is still good, but the value of the land “went bad.” These scenarios involve developed land that is no longer economical to develop, and the costs make it too excessive to hold.

An ancient book entitled “The Art of War” contains a clause that states, “A good general ponders the dangers inherent in the advantages, and the advantages inherent in the dangers.” Astute real estate investors should analyze both dangers and advantages inherent in the foreclosure business in much the same manner.

The ideal type of foreclosed land for sale—large tracts of cheap rural acreage—presents an exceptional opportunity that should be thoroughly investigated.

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Cheap Country Land, Where to Find it!

The Civil War ended in 1865, and soon thereafter, the great westward expansion began. Thousands of people headed west seeking cheap country land to settle and the chance to start new lives. These people planned on farming, grazing cattle, harvesting timber, mining for gold and silver, building railroads, starting businesses and constructing towns—all of which required large tracts of low-priced land.

During this migration westward, into an untamed and unforgiving wilderness, a code of conduct began to emerge. The code dictated that a person should “carry a firearm for protection, offer assistance when needed, mind his own business, and acquire cheap country land.”

The Homestead Act of 1862 made it relatively easy to acquire land in the Western United States. A person who was 21 years of age or older and had never taken up arms against the U. S. government could claim 160 acres, located west of the Mississippi River, from the federal government for $1.25 per acre. The claimant had to improve the land and live on it for five years. The $200 purchase price could be paid with a small down payment and the balance could be paid over time.

More desirable land, priced from $2 to $10 per acre, also could be acquired from railroads, land speculators or the states.

The Timber Culture Act, passed in 1873, made additional land available. Under this act, homesteaders could acquire another 160 acres if they planted trees on one-fourth of the land. Any potential settler, including foreign immigrants, could claim land under this act.

The Desert Land Act of 1877 provided 640 acres to a husband and wife who agreed to irrigate the land within three years. The cost of the 640 acres was $1.25 per acre.

In 1878, when the Timber and Stone Act passed, even more land became available. This act provided that federal lands “not suitable” for farming, could be acquired for timber and mining operations. The cost was $2.50 per acre for 160-acre tracts.

In summary, during the last half of the 19th Century, millions and millions of acres of cheap country land were transferred from the federal government to private ownership.

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Where is the Cheapest Land for Sale?

Buying a large tract of the cheapest land for sale today is one of the simplest, safest and surest methods of achieving greater assets tomorrow.

Let’s review the performance of the cheapest land for sale versus Wall Street, gold and cash, over the last 30 years.

  • From 1981 to the beginning of 2011, the Dow Jones went from 1025 to 11,500. So the Dow Jones is 11 times higher than it was 30 years ago.
  • The price of gold multiplied less than 2 ½ times between 1981 and 2011, from $599 to $1,415.
  • The value of cash decreased dramatically over the last 30 years. According to the U. S. Bureau of Labor Statistics, it takes $2,400 today to purchase the same goods and services that $1,000 purchased 30 years ago.

Now, let’s look at how the value of the cheapest land for sale in the United States has fared over the last 30 years.

  • In 1981, the cheapest land for sale in the United States cost about $10 per acre, and today the cheapest land for sale costs around $180 per acre. The cheapest land for sale today is 18 times higher than it was 30 years ago.

Finally, let’s review the risks associated with other forms of real estate investment.

  • Agricultural land can suffer from a decline in the agricultural business.
  • Apartment buildings can depreciate in value during recessionary times.
  • Commercial properties can become financial sinkholes without paying tenants.
  • Prime developmental land in the middle of a city can sit vacant for years due to zoning difficulties, the lack of bank financing, or a downturn in the economy.

In order to be successful, these investments require intensive management, substantial sums of capital, and advantageous timing – and even then they occasionally fail.

On the other hand, purchasing the cheapest land for sale and doing nothing but holding it for a long period of time is a proven formula for success. Every single acre of the cheapest land for sale that existed 50 years ago is still here today and worth substantially more money.

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Land Prices Per Acre

Land can be priced many ways: by the lot, by the square foot, by the parcel or by the acre. The pros, however, the old-time speculators and investors who’ve made millions of dollars dealing in cheap rural acreage, are only interested in land prices per acre.

Land sales companies, however, use many ways to hide and camouflage the per-acre price from the public. Sadly, even the largest and most reputable companies engage in this subtle form of deception.

One way is to advertise a 10,000-acre ranch for only $1 million. The unsophisticated buyer would assume that the price is an astonishing $100 per acre. Yet after delving into the facts more deeply, the real estate broker casually mentions that there are only 500 deeded acres, with the other 9,500 acres being state or federal leases. Thus the real per-acre price is $2,000.

Another widespread method, used by many Internet land sellers, is to advertise a lot for “only” $2,995, and state that it is one of the cheapest land deals available. But when it is discovered that the lot size is only one-acre, then the price is really $2,995 per acre—and that isn’t a cheap land price. A cheap per-parcel price can be an illusion, while a cheap per-acre price is where real value can be found.

The same principal applies to a nightclub serving alcohol. The nightclub buys whiskey by the gallon and sells it by the small glass—a very profitable formula. The same basic formula applies when dealing in rural real estate. A person should always concentrate on land prices per acre. In other words, buy large tracts by the acre, and sell small lots by the parcel.

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Cheap Acreage, a Good Investment

The term “cheap acreage” generally means land that can be acquired for under $500 per acre. This applies to a very tiny percentage of all the land for sale today in the United States. As inflation increases with massive government spending over the next few years, cheap acreage under $500 per acre will soon be a thing of the past. While the federal government can crank up the printing presses and create more paper money, it is impossible to create more land. Thus, there will be an ever-increasing amount of paper money chasing the same finite supply of land which is a formula destined to cause higher land prices in the future.

Some people might ask what cheap acreage can be used for other than grazing cows, hunting, camping, recreational purposes or long term investment. Following are just two examples to consider.

The Imperial Valley Venture

In the years between 1901 and 1907 the California Development Corporation attempted to build a water canal from the Colorado River westward into California’s Imperial Valley. The purpose was to provide a source of irrigation and turn the dry, desolate and uninhabitable area into a subdivision of lush farms.

Initially started by private promoters the project was eventually taken over by the Southern Pacific Railroad, with federal support promised by President Teddy Roosevelt. The United States Government owned most of the region and was offering cheap acreage for sale at $1.25 per acre.  The project failed after thousands of acres were sold and millions of dollars lost, and in 1909, the California Development Corporation was liquidated

So what happened during the last 100 years regarding prices for this cheap acreage? Much of the land is still dry, desolate and uninhabitable, yet it is very difficult today to find land anywhere in the Imperial Valley for less than $1,000 per acre.

The Rio Rancho Story

A more recent example of cheap acreage would be the city of Rio Rancho, New Mexico. In the 1960s, AMREP Corporation purchased 55,000 acres of cheap grazing land located north of Albuquerque for just a few hundred dollars per acre. AMREP began subdividing the land into residential, commercial and industrial parcels and initiated an aggressive nationwide sales program.

In the 1970s, the federal government indicted the top management of AMREP for, among other things, fraudulent activities, because they touted the land as a good investment. Several key executives were convicted and actually served jail time. In 1981, Intel built a $50 million manufacturing plant in Rio Rancho that created a large employment base. In the ensuing years, thousands of people moved to Rio Rancho.

The initial representations made by AMREP that the land was a good investment proved to be true: the 55,000 acres purchased for just a few hundred dollars per acre and resold to the public is now worth many millions of dollars and is basically a suburb of Albuquerque.

The Moral:

History has proven that it’s virtually impossible to lose money owning cheap acreage if it is purchase cheap enough and held long enough!

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