“I don’t hunt, and I don’t care about land, why should i buy/invest in it?” Living in Birmingham, AL. I hear this a lot. Contrary to popular belief, not everyone in the south loves to hunt, fish, and get outdoors. And that is ok! I typically respond by saying “Do you like to make money?” This changes the whole dynamic of the conversation. The answer is YES….you can MAKE MONEY investing in land. Most people have a friend or relative that has “invested” in real estate at some point in time. When people hear the term “investing in real estate” they think of houses because there is a likely hood you own one, therefore, you probably know a thing or two about it. Maybe you have watched a TV show where they buy a house super cheap, go in and “flip it” and sell it for a nice profit. Sounds great…..yes it happens, but its also a LOT of work. Odds are you have a full time job and you don’t have time to deal with the mess that goes in to all the details involved. This is where LAND comes in to play. You do not need a lot of knowledge or experience with LAND to be a successful investor….Thats where we help! Lets talk LAND and why it is a good investment:
You do not have to hunt or be an outdoorsman to invest in land. Last time i checked, people were not passionate about their 401k, IRA, Mutual Funds, the Stock Market, etc. As long as you are seeing a return on the investment, thats really all that matters, right? Similar to investing in anything else is “risk vs reward.” You can be very aggressive with your investment, or you can be conservative. It’s up to you as the investor/buyer to decide. What separates a LAND Investment from any other type is the fact that it is TANGIBLE and in some cases more predictable. Yes, you can actually enjoy and use your investment if you want. You seldom ever hear people say “I made some money in the stock market……lets get some friends and go hang out on Wall Street!” Never happens. However, whether it is a long term or short term investment, LAND is tangible, you can use it, you can enjoy it.
The best way to figure out which type of investment works best for you is to contact us to talk about your short and long term goals. But here are couple examples of how previous investors have made a solid return on their investment.
Take a tract of land that has enough road frontage to subdivide into “Residential Mini Farms” consisting anywhere from 5-40 acres depending on the tract of land. Pictured below is an example of a tract of land that was busted up in to multiple mini farms. This allows you as the buyer to purchase a lump some of land for a given price, then subdivide it up and sell it for a higher price per acre. This is considered a more short term, aggressive investment. Given the area and property, this strategy has proven to have solid rates of return if purchased at the right price.
Another popular investment strategy is in “Production Timberland.” This is geared towards the more conservative, long term investor, that desires a more predictable return over a longer period. This investment strategy has also proven to be extremely successful in the past, and is predicted to be so for the future. There are numerous ways to see a return on production timberland through either timber management and harvesting, or in leasing. This strategy also provides a “double hedge” against inflation in the future.
These are just a few ways to invest in LAND. Other avenues of diversifying your portfolio are through Hybrid Land, Recreational Land, Production Farmland, and Conservation Easements. There is a right investment strategy for everyone! Remember, you do not have to be a millionaire, familiar, educated, or passionate about land to invest. Whether you are saving for retirement, or looking to diversify and have a more consistent flow of secondary income, there is a right Land Investment strategy for everyone.
Written by: John Morris is an Accredited Land Consultant (ALC) with Southeastern Land Group and is licensed in Alabama and Georgia.