Why Buy Land Now?

In Part 3 of our posts about Baby Boomers and their desire to buy land, we’ll look close at how land help build a solid investment portfolio. Baby Boomers will continue to drive a portion of their investment portfolio into real estate, specifically raw land, fueling the demand for land like never before.

For example, a developer purchased a large tract of land in Western North Carolina and divided it into 1800 parcels ranging from 1 to 6 acres. The lots range in price from $40,000 to $100,000 (depending on the size of the parcel and it’s location in the subdivision). Within one year they sold 800 parcels!

The essence of their promotional campaign – buy the lot and grow your money as the property appreciates (like it is a stock). At some point the landowner will either build on the lot or sell it. They also offer an affordable monthly payment program to those who cannot pay in full. There is no “deed restriction” for this community which means the buyer is not required at ANY time to build on the property.

One of the other motivations for this generation to invest in land is that they are nervous about having all their funds in investments related to the stock market. Certainly we have seen a lot of volatility in the stock market in recent months. More and more investors are taking a portion of their investment portfolio and purchasing land. Why? The premise is – historically land has never gone down in value.

Developers are sensing this trend and shifting their strategy. In the past, a developer purchased a large tract of land near a city and then subdivided it into lots to build houses. Now they are buying land in desirable rural locations throughout the country, dividing it into smaller parcels and marketing to Boomers. As documented above, they are having great success.

Even Wal-Mart is addressing the migration to rural areas 

FL and AZ are no longer the primary destinations for retirees. Retirees are looking all over the country to purchase rural land on which to retire. The core criterion for their purchase is that the parcel is within a reasonable driving distance of a Super Wal-Mart and medical care. Wal-Mart has sensed this trend and they are building many of their new stores at rural crossroads cities throughout the US – thus opening up areas of land originally thought too far from amenities and supplies.