Investing in Land Is Often Safer Than the Stock Market—Here's Why
It’s no secret that the stock market has not been immune to the pandemic. The past few months have demonstrated just how fragile our economy can be. Historic losses were recorded by stock markets around the world starting in March.
The economy’s fragility lead many investors to move out of the market and seek more secure ways to invest their funds. One investment avenue that stands the test of time—and pandemic—is land. Investing in land can be a rewarding avenue for those who prefer more stability and consistency. Here are some practical reasons why you should consider adding land investment to your portfolio.
Finite Supply Leads to Increasing Demand
As the population of the world continues to increase, the amount of available land is steadily decreasing. This inverse relationship between the two makes land a viable, dependable option for investment. Investing in land is a long term commitment with low liquidity until you are able to sell your land. The smartest investors, however, invest for the long haul. This makes investing in land all the more profitable, especially in a growing area. Land in growing areas will become more scarce, making your property more valuable.
Low Maintenance & Affordability
When you begin the process of investing in land, finding a motivated seller is key. The cost per acre will vary depending on the location of your land, but with the right seller, getting a reasonably priced plot of land is highly feasible. The only maintenance required will be mowing and securing the land; you can put as little or as much time in as you want.
As a landowner, you will have a plethora of options for turning your land assets into liquid cash. From harvesting timber to agricultural and hunting leases, all of these options and more are great ways to earn a profit off of your land investment.
Land is Hedged Against Inflation
Land, being a hard asset, is typically a superb hedge against inflation. This means that as the price of goods and services steadily increase over time (referred to as the Consumer Price Index or CPI), your land’s value will increase with them compared to other investments such as stocks and bonds—which will usually lose their value as the CPI increases.
Land’s low correlation with stocks and bonds also helps it remain secure despite economic recessions, making it a reasonably low-risk investment. As an income source, land offers the possibility of continuous cash flow, making it a profitable investment as well.
Confidence During Uncertain Times
In addition to the economic fallout, the pandemic has caused a general state of uncertainty and social unrest. As an infectious disease, the coronavirus is more likely to spread in densely populated, urban areas. The statistics have proven this to be true. Also, the availability of basic necessities such as food and shelter was called into question. Additionally, during the shelter in place orders, the country witnessed civil unrest when protests broke out after the death of George Floyd.
Investing in land offers you and your family a defensible and secure buffer from the outside world that provides you with additional natural food and water assets. If you invest in land, you will have peace of mind knowing that you have a safe and resourceful place to go should you ever need to.
Ready to Invest in Land?
Invest in something that will continuously give back to you. Get the peace of mind that comes from knowing your family is provided for and your assets are protected. Contact Tutt Land’s professional property management experts and let us help you navigate the land purchasing process. We are here to help!