{"id":10490,"date":"2023-05-05T04:19:43","date_gmt":"2023-05-05T04:19:43","guid":{"rendered":"https:\/\/www.wallstreetzen.com\/blog\/?p=10490"},"modified":"2026-01-03T07:07:02","modified_gmt":"2026-01-03T07:07:02","slug":"is-land-a-good-investment","status":"publish","type":"post","link":"https:\/\/www.wallstreetzen.com\/blog\/is-land-a-good-investment\/","title":{"rendered":"Is Land a Good Investment? What to Know Before Buying"},"content":{"rendered":"\n

What asset can\u2019t be in a bubble and always has value, regardless of whether inflation is high or civilization is collapsing? <\/p>\n\n\n\n

That\u2019s not a riddle. The answer is land.<\/p>\n\n\n\n

Land will always have value because we simply cannot live without it. It\u2019s necessary for basic human needs like food and shelter.<\/p>\n\n\n\n

When it comes to performance, farmland in the U.S. has outperformed the S&P 500 in the past three decades<\/a>. Other raw land investments can work just as well or better \u2014 if you know how to approach them, what to look for, and where to invest.<\/p>\n\n\n\n

So is land a good investment? It certainly can be. In this article, I\u2019ll explain why it\u2019s such a valuable and reliable asset \u2014 and guide you through popular investment options, how they work, and what to know before buying land. <\/p>\n\n\n

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What is Raw Land?<\/h2>\n\n\n\n

Raw land, a.k.a. undeveloped land is simply a plot with nothing on it. <\/p>\n\n\n\n

It has not been prepared for building or growing crops. It\u2019s land that hasn\u2019t been given a purpose yet.<\/p>\n\n\n\n

As an investment, raw land is dramatically cheaper than developed land. Its value comes from its potential. <\/p>\n\n\n\n

Is Buying Land a Good Investment?<\/strong><\/h2>\n\n\n\n

So, is land a good investment? It can be \u2014 if you correctly gauge its potential.<\/p>\n\n\n\n

For instance, if you buy a cheap plot of land and in a few years a construction company wants to make a 10-story building there, you can make a serious profit. <\/p>\n\n\n\n

Alternatively, even if you can\u2019t find cheap land in an area that will become more developed in the future, you can find a more common plot of land and use it as a store of value or a place to build something yourself.<\/p>\n\n\n\n

Generally speaking, land doesn\u2019t lose value, unless you overpay in the first place or buy something in a completely undesirable area with few buyers.<\/p>\n\n\n

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Want to buy land directly? Don\u2019t make the mistake of buying land that can\u2019t be built on or used for your desired project! Be sure to check the land you\u2019re eyeing in the local cadastre database and consult with an expert in property law before buying.<\/p>\n<\/div>\n <\/div>\n\n\n\n

Why is Land a Good Investment?<\/strong><\/h2>\n\n\n\n

Why is land a good investment compared to things like stocks and bonds? Let\u2019s take a look:<\/p>\n\n\n\n

There is Limited Supply<\/strong><\/h4>\n\n\n\n

The Federal Reserve can\u2019t print up more land! Maybe when we start living in the Metaverse, but not yet.<\/p>\n\n\n\n

Valuable land is more limited than you think, and land with construction potential is usually located in or near populated areas. Since cities and towns take decades or centuries to develop, you don\u2019t have to worry about land inflation.<\/p>\n\n\n\n

Good agricultural land is also fairly rare. Most of it is in use by farmers and food companies. Therefore, there can and will be more bubbles in debt, stocks, and real estate, but not land itself.<\/p>\n\n\n\n

It is a Tangible Asset<\/strong><\/h4>\n\n\n\n

Assets like stocks, bonds, and crypto can theoretically be lost in the case of a catastrophe (like a company going bankrupt or the government defaulting on its debt). <\/p>\n\n\n\n

Although events like this don\u2019t happen every day, they do happen. With land, you can rest assured that your investment won\u2019t simply disappear.  <\/p>\n\n\n\n

The Market is Less Competitive<\/strong><\/h4>\n\n\n\n

Wall Street folks use trading algorithms to trade stocks, bonds, and such with incredible efficiency. It makes the financial markets super-competitive.<\/p>\n\n\n\n

It\u2019s a different story with land. Not every plot is in a constant, endless bidding war (like most products on the stock market). <\/p>\n\n\n\n

That means overall, it\u2019s easier to find favorable raw land deals \u2014 especially if you\u2019re looking in an area you know well.<\/p>\n\n\n\n

Flexibility<\/strong><\/h4>\n\n\n\n

With most assets, you only have two options \u2014 buy and sell. Not so with land. You can also:<\/p>\n\n\n\n

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  1. Build something:<\/strong> If you buy land and build a house, you can price in the work you put into the project and turn a profit by selling later. You can also use what you build.<\/li>\n\n\n\n
  2. Rent it out:<\/strong> Agricultural land can be rented out easily enough. You can also rent out non-agricultural land for public events and other projects.<\/li>\n\n\n\n
  3. Split the land into multiple smaller plots and sell individually: <\/strong>If you have a large plot with construction potential, you can consider splitting it into multiple lots and selling each one to individual contractors or investors. Multiple reasonably-sized plots are usually more valuable than a single large one.<\/li>\n\n\n\n
  4. Give the land construction potential:<\/strong> If the land isn\u2019t ready for construction because it is ruined or lacks infrastructure, you can buy it cheaply, take care of those problems, and increase the land\u2019s value dramatically.<\/li>\n\n\n\n
  5. Make a deal with a construction company: <\/strong>If a company wants to make a building on your land, you can make a deal \u2014 for instance, they might give you an apartment or two as payment \u2014 after they\u2019ve finished construction.<\/li>\n<\/ol>\n\n\n\n

    Types of Land Investments:<\/strong><\/h2>\n\n\n\n

    1. Farmland<\/strong><\/h4>\n\n\n\n

    Fertile farmland will always be necessary, and therefore, it will always be valuable. <\/p>\n\n\n\n

    Considering how quality farmland is becoming more and more scarce due to countless ecological problems we have, it is very reasonable to assume that arable land will become more scarce (and valuable) in the future. <\/p>\n\n\n\n

    No wonder institutional investors have put serious capital into fertile land over the years \u2014 like Bill Gates, who owns more than 270,000 acres<\/a> of farmland. <\/p>\n\n\n\n

    Plus, the value of average cropland has nearly doubled between 2008 and 2022<\/a>. This is not incredible growth, but arable land almost never depreciates.<\/p>\n\n\n

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    But finding farmland is tough, and it can be expensive.<\/p>\n\n\n\n

    That\u2019s where a service like AcreTrader<\/a> comes in. <\/p>\n\n\n

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    With AcreTrader, accredited investors have the chance to buy a stake in highly-vetted farmland projects at a fraction of the cost of buying land outright. <\/p>\n\n\n\n

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    2. Residential & Commercial Development Land<\/strong><\/h4>\n\n\n\n

    As long as you don\u2019t mind the potential administrative hassles and waiting to cash in, investing in land suited for construction projects offers many potentially profitable options, such as:<\/p>\n\n\n\n