Cheap Land in America
Why should a person buy cheap land in America? Because they aren’t making any more land, and because ongoing inflation will make it worth more money in the future.
Suppose that 25 years ago, a grandfather had died and left his $180,000 estate to his three grandchildren. His Last Will and Testament stipulated that the assets had to be held for 25 years and then distributed in kind to his three heirs. To one grandchild, he left $60,000 in General Motors stock, at the time among the strongest and safest Wall Street stocks. To the second grandchild, he left $60,000 cash in a safe deposit box. The third grandchild received 4,000 acres of “worthless” desert land, located in the “middle of nowhere,” that the grandfather had purchased for $15 per acre, or $60,000.
Twenty-five years later how did these three heirs make out?
The grandchild who inherited General Motors stock received nothing, because the company went bankrupt and was reorganized, wiping out the stockholders.
The grandchild who inherited the $60,000 cash received a currency that had lost half of its purchasing power. According to the U. S. Bureau of Labor Statistics, it takes $122,000 today to buy the same goods and services that $60,000 purchased 25 years ago.
The grandchild who was given the 4,000 acres of “worthless” desert land had an asset valued at $250 per acre, or $1 million.
Buying a large tract of cheap land and holding it for future appreciation is a simple concept; however, most people complicate matters by insisting on improvements such as power, utilities, and maintained roads. Land that has been improved this way already has been marked up substantially in price by the developer, who had to pay for those improvements. Historically, the biggest profits always have been made in cheap, undeveloped land (not properties already improved).
The great thing about owning a tract of cheap land is that nothing has to happen—no rezoning, no development activities, and no population growth—for the land to increase in value. All that is required for cheap land to increase in value is the passage of time and inevitable inflation.
Owning cheap land in America is one of the surest and safest methods of making money, although it is not a “get-rich-quick” scheme. History has proven that it’s virtually impossible to lose money owning cheap land, if purchased cheaply enough and held long enough!
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