Written by Tom Culclasure, National Land Realty
My granddad beat this saying into my head from early on in my life. He always told me, “Son, they ain’t making anymore land. Get all you can!”
When people think of real estate investments, they associate them with rental properties, commercial properties and/or foreclosures. But people rarely think of raw land as an investment and end up missing out on one of the greatest opportunities.
Read more: Top Questions to Ask When Buying Land
There are many benefits to owning land. First, land ownership gives the owner peace of mind. As a long term, tangible asset, raw land doesn’t wear out or depreciate, and there is nothing that can be stolen or broken on it. It is a limited resource that is relatively inexpensive to own and requires little maintenance. In other words, it is a relatively hands-off investment. There is also little competition in the land market as most real estate investors are focused on investments such as rental and commercial properties.
Contrary to popular belief, there is a large profit to be made in land ownership, but it is not a get rich quick scheme. Here are a few examples of ways to make a profit through land ownership:
1. Buy and hold
Purchase land at a good price, hold and sell after appreciation.
2. Establish a farming lease
Farmland has historically produced larger returns than stocks, bonds and mutual funds over the long run. A land owner can normally earn enough from agricultural leases to cover the taxes and insurance, and still make a small profit. However, keep in mind that farmland is normally more expensive and will require more capitol to get started.
3. Establish a hunting lease
Hunting lessees normally take excellent care of the property they are leasing. They also do a great job of patrolling the property and keeping away poachers. As in a farm lease, land owners normally earn enough from a hunting lease to pay the taxes and insurance.
4. Offer owner financing
Land loans can be difficult to secure from traditional banks at times. Offering a buyer owner financing is a way to sell the land and earn interest. Most owner financing deals offer higher interest rates than traditional banks.
Read more: How to Buy Raw Land in a Digital World
About the Author: Born and raised in the midlands of South Carolina in Calhoun County, Tom Culclasure has always had a great appreciation for the outdoors. From his earliest memories of riding around his family’s farm with his father and grandfather, he was taught to appreciate the outdoors, be a steward to the land and preserve the natural beauty of our wonderful state. He attended the University of South Carolina and earned a Bachelor of Science degree in biology from Charleston Southern University. Tom later attended the Charleston School of Law and spent 12 years working in the legal field in the beautiful city of Charleston. After spending all that time in an office, he jumped at the opportunity to get back in the field and joined the team at National Land Realty. His legal background brings a unique skill set and excellent negotiation skills to the land brokerage business, enabling him to better serve his clients. Visit his profile page at National Land Realty here.