Looking for a Solid Investment? Raw Land Can be a Smart Money Move
As the economy continues to take hits, people begin to worry about the nature of their financial futures. As inflation rises and prices of everyday items seem to be climbing with each day, people consider ways they can secure their wealth and avoid losing money as the economy recovers.
So what is raw land investing and is it a smart money move for you?
What is Raw Land?
People have always understood that real estate is a solid investment move. Investing in raw land is another less-talked-about approach that also invests in a tangible asset. Raw land refers to a plot of land that is not developed, has no structures on it, and has not been prepared for construction. In other words, this is terrain usually in the outskirts or undeveloped areas of a city that is untouched.
Raw land usually comes in larger plots of a couple of acres or more. For real estate and other investors, buying raw land is like purchasing a blank canvas that offers an abundance of opportunities.
So is it right for you? Like anything in the financial realm, it depends on your goals, your vision, and your current circumstances. So let’s explore this question a little further.
Is a Raw Land Investment Risky?
When looking at a possible investment of any kind, advisors and financial experts will always suggest considering the possible risks. In the world of financial investment, the term ‘risk tolerance’ is the standard operating procedure. According to Investopedia, risk tolerance is defined as the degree of variability in returns that a person is willing to tolerate as they engage in financial planning.
As any investor knows, there are ebbs and flows in the market. An investment today might suffer the whims and tribulations of the market but will stabilize and grow over time. Some people associate risk tolerance with age, as this means a longer time horizon in which an investment has time to grow and provide returns.
Does Raw Land Appreciate in Value?
When it comes to real estate investments, people often speak in terms of appreciation. The term appreciation refers to a property increasing in value over a period of time. According to Fortune Builders, raw land appreciates for two key reasons:
- Limited supply: Expansion and development are constantly happening. As populations grow, cities are always adding on neighborhoods, building schools, and shopping centers.
- Increasing demand: Because of the need for expanding development, there is increasing demand for land. People always search for land on which to build structures, factories, or to develop as a use for a farm in rural areas.
Different Types of Land Investments
When investing in raw land, there are a couple of land options that an investor might consider. And although a land investor doesn’t need to have a set plan on what the land will be used for, having an idea of the uses of the land can help you find the right plot for you. Options include:
- Commercial or residential land plots
- Livestock or cropland plots
- Small farmland investing
- Hunting
- Off the grid living
How Does Financing Work for Raw Land?
There are several options when it comes to financing a raw land investment. Several approaches are possible when buying a lot of land regardless of what you plan to do with it.
Lot loan: Not to be confused with construction loans. Construction loans are short-term loans that are used by people who intend to buy a land lot to begin building a home right away. A lot loan is an option for people who have a vision to build a home in the future but are not going to start building right away.
Company financing: Some companies that sell plots of land directly to investors may have their own financing options. Companies like Lone Star Investments make it possible to invest in plots of land in Texas and go directly through them for financing.
Why Texas is a Great State in Which to Buy Land Plots
Texas is a vast state with plenty of open and unused land. In the last two years, thousands of people have relocated to Texas. In 2021, Texas passed Brazil to become the 9th largest economy by GDP. Despite the growing population and development, Texas continues to have vast squared-acreage that is open for the future.
Texans don’t move out as often as people come to the state from other places. In 2018, the Federal Reserve Bank of Dallas posted that Texas has the highest retention rate of any state. The state has massive agriculture, farming, oil and gas industries, tech sectors, and no state tax. All of these aspects make the state a popular destination for people of all ilk.
At the same time, Texas is geographically diverse, culturally diverse, and possesses a unique culture, history, and spirit.
Interested in a Raw Land Investment? Learn More About Affordable Land Plots in Texas
If you’re someone that thinks about the future, you know the value of investing today for the rewards of tomorrow. When it comes to investing in raw land, Lone Star Investments has you covered. With affordable acres and gorgeous plots in West Texas, you can secure a solid investment for your family’s future.
Want to learn more? Call us today and learn about the process and our affordable plots!