Is Land A Good Investment Right Now?

With all of the ups and down over the last few years in the real estate market, many investors are left to wonder if it is yet safe to purchase and invest in land. Buying land does not have to be frightening and if you keep these basic principles in mind, you should not have any problems.

I have always heard that using the banks money to buy real estate is a good idea, but buying your own real estate is best done using your own money. Putting the bank at arms length allows you to save money over the long haul and will limit any amount of control they have. To have a home that is paid off is the utmost in stability and mental ease, because you do not have to worry about the possibility of losing your property. I realize this is not an option for most people, so maybe consider it as an ideal more than anything else. For those whom this strategy is a possible or realistic one, real estate is the safest place to store your cash, and avoid being taxed on it.

Besides the fact that when you buy a home outright, you can always rent it and you will have a nice littler income generated from it. Using real estate to establish a foundation for your retirement fund is a great way to acquire rental properties, but it also works to reduce your tax liability as well. The smart thing to do is to pay for a house with that money instead of pay your taxes, so you will be taxed only on the income generated in the form of rent, and not the amount you put down. You tax professional can explain all of the ins and outs of using your income in this manner.

Following the gigantic real estate boom that has become the hallmark of this decade, many more building lots than were needed were built, so buying them, as opposed to rentals, is the second best idea but works if you have less money. You can get some very good deals on the building lot market, especially when buying REO lots in bulk. With the long term in your plans, buying building lots and holding them is a great idea, and only if you can do it without involving the bank, otherwise stay away from them for a few more years.

I advise people to buy with any means, other than bank financing, due to fees, interest and other prosperity killers. Buying building lots and letting them sit empty or joint venturing with a builder is a good idea as long as you are not left holding the bag for the fallout if things go sideways, as they sometimes do.

The author enjoys writing articles about boise real estate & boise idaho homes. Click on the above links to learn more about these topics!