Buying Land as an Investment
According to an article in the Finance section of Yahoo!, a couple in California has decided to buy a tract of land adjacent to their home as a potential investment. Man and wife, both previously teachers, are heading towards retirement and as they do so, do not feel that they can continue to live in CA on their retirement compensations as the cost of living in this area continues to rise. By purchasing these two acres, the couple could potentially divide up the land, as the sum of the parts would be much greater than the whole. Even though some financial advisors suggest that investing in land is not such a great idea because of the income forgone over the years that the land doesn't sell, some advisors think that this is a worthy investment. If the family did sell the land, it would sure generate a profit that is much greater than any state-compensated retirement; and if worst came to worst, by owning the land across from their property, this couple could forever cherish their great view of the California mountains.
Labels:
land investment,
retirement
4 comments:
This seems like a good investment in the long run because California is such a desirable place to live for many. I believe income could be doubled by dividing the land and selling it as individual plots. This could potentially double or even triple the income of this retired family, and could help with financial security. The price of the land they purchase will continue to increase over the years with the steady growth of the economy currently, generating even more additional revenue for the family.
Are they taking into account the implicit costs to themselves such as the upkeep of the land and the cost to them of owning the land. They'll have to pay taxes, as well as keep it considerably nice for them to even be able to sell it. Now add on the price of the land. Is it really worth it?
Perhaps eventually, that land could be a good investment. California is known as a place of growth and change. People continue to move there, and buyers (commercial or residential) could seek it out in the future. Regardless of the current value, the chances of selling it cheaper seem unlikely.
Perhaps this couple isn't looking for the long run. They are retired and unfortunately that means that they will be dieing sooner then later. Honestly, long term advantages or disadvantages may not render a lot of their decision. This could perhaps bring down costs if they rent it or sell it in the future, but the short term benefits are nice. More space and saving a view they have enjoyed all there life.
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