Is a Lot a Safe Investment at the Current Time?

During the latest real estate boom, many speculators were cashing in by purchasing land and finding a buyer who was willing to pay more than what it was originally purchased for. There are a few guidelines for investing in land and they are easy to remember and apply.

The first rule to remember is that if you own real estate the “right way” then it is always a safe and good investment. Putting the bank at arms length allows you to save money over the long haul and will limit any amount of control they have. In times like these, being free of the bank is vital and offers the highest degree of freedom and stability. I realize this is not an option for most people, so maybe consider it as an ideal more than anything else. After achieving this monumental feat, realizing the freedom that comes from doing it, and avoiding the taxes that can prevent it can be a windfall.

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. Let us say you earn $300,000 per year in your business and the income tax for your tax bracket would simply take about half of that amount, if not more. If you use the tax laws in the most advantageous manner possible, you can simply take your pre-tax income and spend it on real estate, which will offset your tax liability on your net sheet. I do recommend sitting down with your accountant to outline the exact plan to do this as your first step.

If you do not have enough money to purchase a rental outright, maybe you can save enough money to simply buy a building lot and wait until you can save up more money to build on it, after all, there are more than the market needs right now. Waiting on the extra building lots to be absorbed into the market may take time, but as soon as it happens the market will be a good bet again. They really are actually a good one right now, they simply will not yield much return for a while which makes the scenario in which you would invest an investment with a higher return more appealing.

Using a note from the original land owner works better than using a mortgage due to the fact that you are dealing with a person, not a corporation. There are other options for getting rentals from the land you own, like doing joint ventures with a local builder, so keep your eyes open and make sure to cover your own assets in all of your business dealings.

The author enjoys writing articles about boise real estate & boise short sales. Click on the above links to learn more about these topics! Don’t reprint this exact article. Instead, reprint a free unique content version of this same article.