Is Buying Land a Good Investment?

Most people have hopes of owning a house one day, but only a smaller group want to own land, undeveloped, untreated land. There’s something mystical about owning your own land – it makes us feel like pioneers using string and pegs to mark out our domain. But is it a worthwhile investment in modern times? True, it’s a finite resource, so theoretically it can only increase in value. But can you, in your lifetime, make a profit off of buying a piece of undeveloped land?

The answer is that worst of all possibilities: maybe. More specifically, the answer depends on what you plan for your land, and how proactive you want to be with regards to it. If you plan on selling it to a big developer down the road for lots of money, check out how it’s zoned before you buy, because that can kill commercial dreams right there. Sure, you can try to get your land re-zoned, but that puts you at the mercy of city politicians, and that of course could go several ways.

If you want to keep your land open (i.e. not building something yourself, like a home), keep in mind that you’ll continually have to pay taxes on it, meaning that land that doesn’t actively make you money will slowly drain you of it. And if you do want to build your dream home on it, make sure you consult a developer first. What may look like a beautiful plot of land to you can be an architectural nightmare to the well trained eye, and you don’t want to end up with a useless plot of land that you can’t build on. Land can be a wonderful investment, if you’re smart about it. However, if you’re a novice, make sure you consult experts before you sign on the dotted line.