Now May Be the Time to Buy Land

Many markets within the Western states are waning from the stress of few to little land sales. In the local markets of Idaho there are up to 35 years of inventory and longer in rural small town communities. The question here is: Not what land is for sale but rather whose cash is for sale. I have cash and it is for sale to the highest bidders who brings me the largest acreage with the greatest list of amenities. Is that not what you are thinking? I have cash who wants it the most! If you are a seller and don’t need the sale take the property off the market you are contributing to an oversupply.

If you are a buyer consider making lots of offers on virtually every property out there for dirt cheap and flush out the sellers that need your cash. If the offers are really low don’t bother to even look at the property until you receive a response from the seller. Naturally, 99% of the offers will be rejected but that 1% might be a winner. Your broker/attorney will need to advise you on how to steer clear of specific performance clauses within the contract. Usually this is done with an inspection contingency of a period of days with all good faith deposits to be made only after you approve in writing of the properties condition.

If you have cash in a 401(k), SEP IRA, or a long term cash savings account land may prove to be an excellent investment if you have 10 years or more to retire. However, be mindful that ongoing maintenance such as taxes and upkeep must be paid from the retirement account so do not spend everything in the account unless your plan is to contribute to the account each year. I do not recommend financing the land unless markets generally improve across the country. Land typically will not generate enough revenue to pay for the land note.

Land is also difficult if not impossible to bank finance so I cannot recommend investing in land if the cash is intended for another purpose in the near future. Large properties can take years to entice another cash buyer to invest and flipping can be very risky.

Landownership obliges the owner to be a stewart of the land, safeguard it for future generations. If you are searching for land to purchase consider employing a land broker who can demonstrate a basic knowledge of land. Also read through Land Buying–A Buyers checklist.

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