Vail Daily column: Is land a good investment?
Ask a Realtor
All my friends tell me to buy rental property with my investment money but I am more attracted to land purchases. I am not sure why, but I want to own land and I don’t want to deal with renters. I realize I will not get any income and I will have to pay taxes and possibly HOA fees, but I just feel good about being able to own my own piece of dirt. Can you give me some reasons supporting my possibly unsupportable desire to be a dirt owner?
Dear Dirt Owner,
You are not the only investor that feels and operates this way. Some dirt owners have made a lot of money when they bought the right property at the right price and time. Actually, recently Jeramy Stephens, of Stuttgart, Arkansas, spoke at the 2015 Realtors Conference and Expo in San Diego, and offered the following reasons on why “land may be your best investment.”
Price of Beef
First, he spoke of ranch land being more in demand now that the price of beef has shot up (did you notice the price of steak at the store and restaurants you frequent?). If you own the land and are not a rancher, then you can certainly lease the land to cattle ranchers.
Lease Land to Farmers
Second, you could produce hay or alfalfa or lease to hay farmers. There are years that a good hay crop (sometimes 2 or 3 cuttings) will be very valuable.
Third, ranch land sometimes has mineral rights that you can sell or lease. This has been very lucrative for many ranches. You may not love the look of oil and gas wells, but the owner of the mineral rights think they look beautiful!
Commercial and Residential Development
The fourth reason Stephens mentioned was a commercial and residential development land investing strategy. If you are aware of what direction commercial and/or residential development is headed, then you can look to purchase property that is still currently an “outlying area” and wait for the development to come your way.
Low Lot Prices
Here in Eagle County, we have a fifth opportunity that is still available in some areas. Our lot and acreage prices dropped to extremely low levels in the last depressed housing cycle. Lots became very cheap to buy because clients were buying homes at reduced prices, so purchasing land did not make sense then. Many of those lots and acreages are still at very low prices, but may not stay that way. Check with your knowledgeable Realtor to find out where the best deals can still be found. So, there are five reasons for you to use and we did not even count the one you mentioned in your question. It just feels good to own your own little piece of this magnificent earth!
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or http://www.SkiAndTeeHomes.com.