Cheap Rural Land: “The Law of Per-Acre Pricing”
The “Law of Per-Acre Pricing” is very beneficial for those who deal in cheap rural land. Basically, this law states that “the larger a tract of land is, the smaller the per-acre price will be—and thesmaller a tract of land is, the higher the per-acre price will be.” In other words, 640 acres will sell for a higher per-acre price than will 2,000 acres; 160 acres will sell for a higher per-acre price than will 640 acres; and 40 acres will sell for a higher per-acre price than will 160 acres.
One of the basic principles of business is that prices are lower on a wholesale basis and higher on a retail basis. As an example, a person could purchase 16,000 acres of cheap rural land for $200 per acre; he could then sell one hundred 160-acre tracts for $400 per acre ($64,000 per tract); and thereafter, another buyer could purchase 160 acres, then sell four 40-acre tracts for $800 per acre ($32,000 per tract); and so on.
With cheap rural land, there is an automatic per-acre price increase with every division of the land into smaller sizes. However, it is of paramount importance to check with each state, and with each county within the state, to ascertain what subdivision regulations might be applicable. In some states, subdivision regulations are almost prohibitive, and in other states, there are almost no subdivision regulations.
In the 1800s, quite a few western towns were established on cheap rural land, utilizing “The Law of Per-Acre Pricing.” Town promoters would purchase 640 acres from the government for $1.25 per acre, then lay out streets and plot the land into town lots for commercial and residential usage. The original cheap rural land, purchased for $1.25 per acre, would thereafter become small lots in the new town selling for $2,000 or $3,000 per acre.
Dealing in cheap rural land, using “The Law of Per-Acre Pricing,” is an almost flawless method of accumulating substantial wealth. Of course, good business judgment, financial acumen, and good timing are always critical components in the cheap rural land business.
To view cheap rural land for sale, CLICK HERE.