Why is land investing a good investment?
Investing in land is a wise decision for many reasons! On the financial side of things, it allows you to diversify your portfolio and protect yourself against the stock market’s volatility. It provides an opportunity to make money by renting out the property that you own. There are also low entry costs and tax benefits when investing in land because of its long-term nature.
From a different standpoint, a parcel of land offers the opportunity to start fresh! It can be a great place to create the perfect getaway location. That’s the beauty of investing in undeveloped land- you can transform it into the land of your dreams!
Last but not least (and perhaps the biggest benefit of all)- owning a piece of land can be very rewarding because it has intrinsic value and can provide peace of mind for years to come!
So if you’re looking to invest in your own piece of Colorado mountain land for sale, it could be a great way to diversify your portfolio, invite more peace into your life, and put more cash in your pocket!
Investing in Land to Diversify Your Portfolio
Investing in raw land can be a great way to diversify your investments. Why is it important to diversify your portfolio, you might ask? Since we can never be 100% sure of what the market might do at any given moment, a well-diversified portfolio is important in any and every market condition.
Investors who are serious about protecting their investments should invest in more than one asset class. More commonly said- you should never put all your eggs in one basket (in case that basket falls and all your eggs break into tiny bits and pieces).
For example, you could invest 20% of the money that you have set aside for investing into raw land and spread it out among different types of properties, such as residential or commercial real estate. This will protect against volatility in the stock market because when stocks go down, so do shares of companies who own property- but not yours! You’ll still make good money off renting out the land and/or any homes on the parcel of land, which is what we’ll talk about next.
Renting Out Your Raw Land
Land investing can provide you with a steady stream of monthly income if you choose to buy and rent out your land. This is an excellent way to provide for your future financial needs while at the same time saving up for retirement. It’s not too hard either- all you need to do is find out what type(s) of raw land best suit your desired use and budget, buy it in bulk, and rent them out yourself (or hire someone else to manage this).
You can even lease portions of the land if you want just one part rented or leased instead of the whole thing. The flexibility here allows those who invest wisely in raw land better access to reliable rental income each month.
The best part is that the rent amount doesn’t need to be high to make a profit- even a few hundred dollars per month can give you some really good returns when spread over an entire year. Plus, who doesn’t love passive income? In the end, you can make a lot of money by renting out your raw land!
Low Entry Costs
Raw land typically has low entry costs as well! A low entry cost typically means that the amount of money paid upfront will be much less than the amount required for other types of investments. In other words, your chances of finding an affordable plot of land that you can invest in are very high. This makes land investing an accessible choice for almost any budget!
Tax Benefits
Land investment can be a great way to reduce your tax burden. If you rent part of the land out yourself, that rental income is generally not taxed unless it exceeds $14,000 in one year.
Renting all or part of your raw land out for agricultural purposes also provides some nice tax benefits: The IRS considers this use “a form of farming,” and (as long as the gross receipts don’t exceed $15 million) will allow you to claim a pretty decent deductible.
Your Home Away From Home
With a raw piece of land, you can make it into whatever you want! You can build your dream home with a wraparound porch or a rustic cabin with a wood-burning fireplace. You can become a homesteader and live a more self-sufficient life. Or you can leave the land exactly how it is and embrace the wide-open space. You can ride horses, stargaze, and escape the noise of everyday living. Undeveloped land is like a clean slate- the possibilities are endless!
A Rewarding Real Estate Investment
Land offers great diversity and endless possibilities! You can build on the land, rent the land out, or use the land for your own recreation. Buying land gives investors a feeling of security and lasting peace of mind, especially when they know that their purchase is a long-term investment.
Investing in raw land can create value over time, generate a great income stream straight to your pocket, and can offer much more than just owning stocks or bonds as investments. Overall, land investing is almost always a good investment because of the many benefits it offers!