WHY INVEST IN CHEAP RURAL LAND
Why should a person buy cheap rural land? Because they aren’t making any more land, and because ongoing inflation will make it worth more money in the future.
Suppose 25 years ago, a grandfather died and left his $180,000 estate to his three grandchildren. His last Will and Testament stipulated that the assets had to be held for 25 years and then distributed, in kind, to his three heirs. To one grandchild, he left $60,000 in General Motors stock, at the time among the strongest and safest Wall Street investments. To the second grandchild, he left $60,000 in cash in a safe deposit box. To the third grandchild he left the deed to 4,000 acres of “worthless” desert land, located in the “middle of nowhere,” which the grandfather had purchased for $15 per acre.
Twenty-five years later how did these heirs make out?
The grandchild who was given the General Motors stock received nothing, because the company went bankrupt and was reorganized, wiping out the stockholders.
The grandchild who inherited the $60,000 cash received a currency that had lost half of its purchasing power. According to the U. S. Bureau of Labor Statics, it takes $122,000 today to buy the same goods and services that $60,000 purchased 25 years ago.
The grandchild who was given the 4,000 acres of “worthless” desert land had an asset valued at $250 per acre, or over $1 million.
Buying a large tract of cheap land in the USA and holding it for future appreciation is a simple concept; however, most people complicate matters by insisting on improvements such as power, utilities, and maintained roads. Land that has been improved this way already has been marked up substantially in price by the developer, who had to pay for those improvements. Historically, the biggest profits always have been made in cheap open land that is undeveloped (not properties already improved).
The great thing about owning a tract of cheap land as an investment is that nothing has to happen – no rezoning, no development activities, and no population growth – for the cheap land to increase in value. All that is required for cheap rural property to increase in value is the passage of time and inevitable inflation.
Owning cheap land as an investment in the United States is one of the surest and safest methods of making money, although it is not a “get rich quick” scheme. History has proven that it’s virtually impossible to lose money owning cheap rural property, if purchased cheaply enough and held long enough!