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Is land a good investment?

We've wanted to buy a second home with the hope of renting it, but financially that is out of reach right now. So, we're considering buying land and just waiting to build until we have the finances to do so. I know it wouldn't give us an income like a rental, but it's also something we can afford and would hopefully gain value over time. Worst case, we would sell it in the future. So, is land a good investment?

Asked By David | Union Pier, MI | 41 views | Investing | 1 month ago

Answer(1)

Novice

2 Answers

Shirley Russell

Chase International

(1)

s Land a Good Investment? Investing in land can be a highly strategic and profitable real estate decision, but it depends on several factors, including location, market trends, and long-term appreciation potential. Here’s what you need to consider before purchasing land as an investment: 1. Appreciation Potential Land is a finite resource, and in high-demand areas, it tends to appreciate over time. If you buy in a growing market with strong infrastructure development, you could see significant gains. Areas near booming metropolitan regions, vacation destinations, or future commercial projects often yield the highest returns. 2. Lower Holding Costs Compared to rental properties, land has minimal maintenance costs, no tenant issues, and lower property taxes and insurance (depending on zoning and location). This makes it a relatively low-risk, long-term investment. 3. Future Development Potential Since your goal is to eventually build a home, securing the right lot now can lock in lower prices before land values rise. Additionally, if zoning allows, you could explore short-term rental options such as RV pads, tiny homes, or glamping sites to generate some income while you wait to build. 4. Market Liquidity & Exit Strategy Unlike rental properties, land can sometimes take longer to sell, especially if it’s in a rural or undeveloped area. However, if you buy in a desirable location with growing demand, your resale value could be substantial, allowing you to profit when the time is right. 5. Key Considerations Before Buying Land Zoning and Land Use Regulations – Ensure it aligns with your future building plans. Utility Access – Check for water, electricity, and sewage availability. Market Growth Trends – Research areas with increasing property values. Property Taxes & HOA Fees – Factor in annual costs. Final Verdict: Is Land a Good Investment? Yes, buying land can be a smart real estate investment—especially if you choose a location with high appreciation potential. While it won’t generate rental income immediately, it serves as a long-term wealth-building asset with low holding costs and future development opportunities. If your budget doesn’t currently allow for a second home, land investment is a strategic stepping stone toward that goal. Would you like help analyzing specific land opportunities in your target area?