What’s coming next? What options will I have to make money before I sell my new asset? How liquid is my asset in a time of crisis? These may be the questions a potential should ask themselves.
The basis of of any investor’s always be made by determining what’s coming next. They are going to have several options to utilize the asset before they sell their asset. Finally, they will know how easily that asset can be liquidated into cash in case of an emergency. All these things are especially important when an investor decides to purchase a new plot of land.
What’s coming next? Does the investor know that this new land purchase will be in the path of a growing economy? Do they know if it’s near growing metropolitan city? Will a company want to buy this land from them for its natural resources? Will a company want to build a factory on the lot purchased? Being able to take all things into consideration will allow the investor to make the right decisions by looking into the near and far future and seeing what lies ahead.
What opportunities will I have to make money before I sell my new asset? One of the obvious options is by renting land to larger companies. Will wind or solar power want to rent the space from me? Does my lot get more wind or sun? Is it in a valley? Is it flat enough for solar panels? Can I create connections quickly enough in the solar or wind industry to make a quick profit? Knowing what you are going to do with the land before you buy is a great thing to contemplate before you buy your land.
What is the liquidity of my asset? Meaning, how fast can I off-load this asset in a time of need for myself, my family or my company. An asset that you can not sell to someone else quickly might not be an “asset” to you at all. Finding a plot of land for a reasonable price that you know will increase in price over time will increase the liquidity of your land. Also, liquidity might be determined by how much land you can donate and turn into a tax write off. Investors all over the United States are donating land to save other parts of their income. Land can be a simple way to lighten your tax burden in a couple years when you need it the most (especially if you buy it for a lower price and inflation brings its price up over time). It could be the difference between bankruptcy and foreclosure and staying alive.
Finally, what all investors need to remember when buying land is that it is full of different commodities - raw materials that can be bought and sold. Your job as an investor is to determine what commodities can be used to make short term gains while you wait for the long term payout.