Why is land investment better than the stock market?

written by admin on January 14, 2009
The recent upheaval in the stock market highlights some major weaknesses in stock investments. If a company goes bankrupt, your entire investment may be lost. Your asset was on paper only. It wasn’t tangible property. Just the hint of trouble sets off investor panic. Even if you are one of those wise, patient wait-it-out investors, you don’t have any guarantee your investments will wade through the upheaval.

If you are looking for an investment that demonstrates low risk with reasonable returns, land is a far better asset than stock.  Values may fluctuate, but the primary asset remains, so in most cases the investment will pay off.

Here are six reasons you should invest in land:

1) Usable land is a limited resource. There is only so much to go around. As population increases, the value of land increases. Timber land has reflected a similar increase in value. Even with the adjustments occurring in the housing market, real estate will also regain value as the law of supply and demand continues working.

2) The cost of building materials and labor continues to rise. Money you invest now in building will appreciate along with the land value.

3) Tax breaks are possible when you buy property. Some property improvements are tax deductible, and depreciation can reduce your current taxes. You can’t take advantage of depreciation when you invest in stock.

4) Financing a stock purchase is unusual. You have to put more of your money at risk right up front. Financing a property purchase is the norm. You gain financial flexibility when you invest in land. Even if you choose to pay the balance up front, you get to choose how much risk you are taking. You control the outcome. In today’s market every stock investment is inherently risky.

5) When you purchase real estate, renting your property becomes a possibility. Whether you purchase farm land or a house, renting the property can help you pay a mortgage off early.

6) Most land investments are permanently tangible. This means that you can experience them with your senses, not just see their value printed on a piece of paper. They are real.



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