Other than gold, land has been one of the best and time-honored investments a person can make. Even though the market can be volatile in the short term, the value of a piece of land only trends upwards in the long term.
Also, like gold, land investments can never zero out. Forex, stock, and even crypto may be subject to losing all their value due to bad governance or changing laws. However, by investing in land, you stand to make capital gains to avoid risking the complete loss of all your wealth.
Living on a base means that you don’t have the normal living expenses of a civilian. Investing in land is a great financial idea regardless; find out why and how in the rest of this article.
Commercial and Residential Property Make Amazing Sources of Passive Income
Good land investment is like buying shares in an amazing and profitable company, only much more beneficial. With stock investments, you generally buy low and sell high to make short and medium-term gains. Investing in a well-established company and sticking around for decades tends to be better if its share price grows steadily and if the dividends are generous.
A land investment, though much more expensive, is a guaranteed long-term growth investment like a company that will never fail. If you can rent the piece of land out to a family or a business, you can receive an extra monthly income on top of steadily growing wealth.
Investing in Land is Versatile
With most investments, your only real options are when to buy and when to sell. Their value and governance belong to forces out of your control. However, you can do anything legally conceivable to bring out the best of your land investment.
If you want to buy an empty lot and wait for the value to grow quietly, you can do that. Rent the land out to a business or build a rental house if you have the time and resources to manage the building, screening, and renting affairs. Building your dream home is a great way to increase the land’s value and plan for your future.
You can even be involved in increasing the land’s value and profitability. Making one or more easy modifications can greatly increase a property’s value. Buy a run-down house, fix it up, and sell it off if you want to make huge once-off gains.
The average return on investment of a house flip was 40% in 2020. Getting into the flipping business is very resource-intensive, to the point where it may not even count as passive income, and yet incredibly rewarding.
Investing in Land is a Great Retirement Asset
Most people retire on a fixed income, which really hurts if you’re still facing increasing rental prices. Instead be the landlord, own the house you live in, or both!
By building a home to live in, you already plan for the future, but you can go a step further and design it to accommodate your future needs. Methodically widening doors and adding safety features can save you a great deal of hassle in the future. You will also be able to sell the property at a higher price if necessary.
Future planning doesn’t have to involve you tailoring your house for future needs. Renting your property out to someone supplements your income, which comes with its own set of retirement benefits as well. Unlike a fixed pension, you’ll be able to increase your rental price (within reason) to account for future inflation.
Lastly, if you’re looking for a lump sum to retire on, then you could also sell some (or all) of the property you own. You can tailor your retirement plan to suit your needs because land investments are that flexible.
Investing in Land Doesn’t Need Huge Amounts of Capital
Depending on which state you live in and your credit score, there are many financing options available to you, no matter what kind of land investing you want to get into.
Veterans qualify for certain loans that aren’t available to normal citizens, including the Veterans Association (VA) Loan. You need to have served for a certain amount of time to qualify.
But once you qualify, you simply need to provide proof of eligibility to start the process. One amazing feature of these loans is that some veterans won’t even have to put a down payment on the land they buy.
VA loans also come at a lower than average interest rate. You can save on your monthly repayments and use your savings to upgrade your property to grow its value further.
If you’re in debt, a VA loan can also help you re-finance and consolidate what you owe. Those not in the position to buy can still look forward to making a land investment and using a VA loan to help them on the journey.
Clubbing Together on Land Investments
Taking on 100% of the risk can seem daunting to some people, especially if you put most of your eggs in one basket. Diminish your risk by pooling your resources with trusted partners. Buying a property with three other people means you only get 25% of the profit, but your risk and expense are less as well.
This model can be applied to raw land-lot investing, flipping houses, and commercial property. Theoretically, you could even club together on residential property, but be sure that all members of the group understand their roles, responsibilities, rights, and privileges.
Start Investing in Your Future Today
It’s never too early or too late to plan for your future. Whether the next stage is buying your first house or retiring, investing in land is one of the best ways to secure that next step. Such investments entitle you to full control of your asset and all the benefits it generates.
You can finance your investment alone, with a loan, or with trusted partners as long as you’re comfortable with the arrangement and handle the responsibilities and risks well. Lastly, make sure you know exactly what the investment’s future tax implications will be to maximize security and peace of mind.
Do you want to find out more about building a passive income portfolio? Check out some of our other blogs to learn about different ways in which members of the military can structure their property portfolios.
