For many generations, land has been viewed as a hard asset with real, tangible value. You can live on it, build a home on it, farm on it – you name it. A piece of land never “goes away” – it is something tangible, and the ownership of land has always been a goal for people all across the world. More fortunes have been made by owning land than any other investment – some of the people you might have heard of include Donald Trump, Bob Hope and Howard Hughes. During these uncertain times, land and other tangible assets have been favoured by investors from across the world, as they provide an excellent hedge against inflation, which can easily be caused by the low interest rates to stimulate borrowing and economic growth.
The good news is, investing in land is no longer something that is reserved for high-net worth individuals, private equity groups, and pension funds. Individual investors now have excellent opportunities to acquire buildable residential home sites in planned communities across the United States, and it has never been easier, more affordable, or a better time to do so. But how do I know that investing in land is right for me? The best thing you can do – is to start off by answering these four questions:
- Is land the right investment for me?
- How much land should I buy?
- Where should I buy?
- Are you ready to start?
The first question is the most important one – as land is simply not for everyone. You will need to have access to liquid funds that are set aside for long-term growth, such as a college fund or a self-directed pension fund such as an IRA (U.S.) or SIPP. (United Kingdom) If you have a lack of patience, looking for a return in the short term, or can not afford to stay invested for a longer period of time, land might not be for you, as you will most likely not see the returns you might hope for, unless you can hold on for several years.
As with most things related to investments – it’s always best not to put all your eggs in one basket. Take a look at your overall portfolio and how you have allocated it, and decide how much you would like to allocate to a land investment. Remember, land is considered a low-risk investment, but it can also be less liquid and require a longer time before it reaches the levels you want it to.
I think we all know that the secret to a good investment in real estate is “location, location, location”. But what does it really mean? Basically, a land lot is only ever going to appreciate in value if it is located in an area where people want to live, developers want to build homes, and where there are no obstructions (too hilly, too stringent planning rules, no access to services) to building homes and new communities. By following the emergence of new communities and the movement of people, some of the most prolific investors in history have managed to make staggering returns on land investments.
If, after reading through the first three questions, you have gathered that you have enough capital, and that land investment indeed is for you – then please call us today to get started!
Exit strategy – How do I make my money?
Investing in residential land lots is very much a waiting game – you simply buy the lots at the lowest possible price, and then you wait for the capital appreciation to happen over time. Spyglass have managed to negotiate exclusive prices for all lots in the Bella Vista community, so investors can be assured that there is a great chance of seeing a good return on their money. As with many other investments, particularly in real estate, the saying is that “you make your money when you buy, not when you sell” – and this is very much true also when it comes to land investments in Bella Vista. The lots we are offering are part of a large bulk offering, and are significantly discounted from where they were just a few years ago.
Buying residential lots in planned communities allows you to invest in the baby-boomer generation’s desire to live “The American Dream”. Many of these people are currently living in large cities in the North and Midwest, and are dying to get a home “away from it all” which they can design to their own specification, and where they can finally have the peace and tranquillity they deserve. It is this desire that will allow you to make a large return on your money. By buying now, you will get in ahead of the curve, at the lowest possible price, and can hold on for resale over the next 5-7 years. Let’s say you buy your lot for $10.000 today, and sell it five years later for a very realistic $22.000. This would give you a 120% gross return on your investment, or 20% annualized!