How to Invest in Raw, Undeveloped Land
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How to Invest in Raw, Undeveloped Land

Tired of seeing your stock market investments deteriorate before your eyes? Wish you could earn more than 2-3% on your CD's?  You've heard for years that real estate makes the best investment, but what type of real estate provides the greatest returns?  As Mark Twain suggested: “Buy land, they're not making it anymore!”

When you own raw land, no one calls you in the middle of the night to fix their toilet.  Neither do you have to lie awake at night wondering how to attract a new tenant to your strip mall.  Owning a large tract of unimproved land makes you money while you sleep.  It requires no attention and doesn't call or write.  It just quietly appreciates in value until the day you're ready to sell.  At that point you receive its appreciated value and buy two more parcels to replace it.

But what about buying in today's recessionary market?  Surely you've heard the expression "Buy low - sell high!".  Now is the absolute best time to begin your land investment portfolio, but you'll need to do some research first to find the best buy in your area.  You've got to know what land has been selling for, and compare that to current asking prices.

In real estate there are two ways to buy: 1) retail, and 2) wholesale.  If buy buy a property at the average "asking" price, you're making a retail purchase, and will have to wait, possibly for years, before it appreciates to a profitable level.  As my first partner once told me: "We're going to pass up the good deals when we find them, and wait for the great ones!"  You want to pay a price that is at or below actual selling prices.  When you do, the property can actually be worth more than you paid on the day you buy it.

Keep in mind that there are always land owners who "must sell". Some circumstance in their life has changed requiring an immediate sale.  As a result, they are likely to accept a low price offer, one well below "retail".  Think you should feel guilty for taking advantage of their situation?  Don't!  In the first place you didn't cause it, and secondly, you are doing them a huge favor by providing the money they desperately need to correct their "situation".

The price you pay is just one of many factors to be considered.  Others include: 1) location, location, location, 2) available financing, 3) road frontage vs. a right-of-way, 4) zoning or restrictions, 5) a boundary survey, 6) title insurance, 7) topography, 8) appeal to potential buyers, and much more.

In summary, the potential return from owning land vs. the risk involved is a no-brainer.  Time and a wise purchase decision are the only factors needed to insure that your investment pays off in spades.  Read more about buying land as an investment at http://www.ncmountainland.net/BuyerTip/buyer.html

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