Is Land Investment Safer? 

When American humorist and writer Mark Twain said, ’Buy land, they’re not making it anymore,’ he was definitely on to something. 

Land is finite, and that scarcity gives it lasting appeal.

Yet, despite its obvious logic, land remains one of the most misunderstood investments.

Many people are put off by its perceived complexity, potential legal hurdles, and questions about safety and returns.

Every investment is a calculated risk – a bet that an asset will grow in value based on research, trends, or sometimes even just a hunch. Some investors are comfortable with high-risk plays, but others are less so and want something solid in return.

For many, that means nothing tangible – stocks, gold, real estate, or bonds they can track and understand.

The concept of land investment fits that bill in some ways. It’s physical and it’s tangible. But it’s also layered with nuance, and for that reason, it remains underused and underestimated.

So, is land a safe investment?

It absolutely can be – in the right hands and with the right strategy. But like any asset, its success depends on your goals and how well you manage the details.

Is Buying Land a Good Investment?

There are many ways to invest in land, including farmland, raw land, residential, commercial, industrial and more. Different strategies exist, like land flipping, buy-and-hold and targeting real estate construction. 

In all cases, land is a tangible asset that usually appreciates over time. You can hold onto it for future development or sell it when the market is right. 

As the surrounding areas grow, your land may become more appealing to developers or businesses, which can lead to significant returns. 

While it can serve as a reliable store of value, raw land typically does not generate immediate cash flow. It may require development before it becomes profitable. 

This speculative nature means you must be patient and prepared for the long haul.

Unlike stocks, land is a ‘fixed asset’ that cannot be turned into cash quickly. Selling land can take time and involve steep transaction costs, real estate agent fees and title insurance. 

Furthermore, adding land to your investment portfolio can help spread risk. Its value does not always move in sync with stocks or other assets, making it a low-risk hedge against inflation. 

However, as property prices rise, land values often increase as well. If you can buy land in places where more people are moving into, the demand rises, leading to higher prices over time. 

While the fundamental appeal of land investment is evident, particularly in certain emerging markets, it is important to conduct thorough due diligence.

However, there are some benefits and drawbacks.

Pros and Cons of Land Investment

Buying land can be relatively safe as part of a longer-term strategy. However, factors like location, zoning regulations and potential future development must be considered. 

Here’s a more detailed view: 

Pros:

• In desirable areas or those with potential for development, there are generally value increases  
• Land is a stable, tangible asset that doesn’t depreciate as fast as other assets  
• Land can help diversify an investment portfolio 
• It can increase in value, especially when developed into residential, commercial or industrial real estate. 

Cons:

• Less liquid than other assets and can take longer to sell
• Zoning regulations can impact land use and value 
• Ongoing maintenance, property taxes and insurance 
• Value can be affected by real estate market downturns 
• Legal issues can develop over land use and boundaries, etc.

How to Invest in Land

Like buying real estate, land can generate high returns, but the capital required to enter can be significant. 

Of course, owning land directly is always possible, but there are other ways to gain exposure without having to commit larger sums. 

We’ll discuss some of the best markets for buying directly later, but land-based stocks, trusts and funds are also available for those who want a softer landing without the commitment to full ownership.

These include:

• Exchange Traded Funds (EFTs) 
• Agriculture and farmland stocks
• Real Estate Investment Trusts (REITs).

If you choose the direct route, you can expect to hold land for a considerable time. 

However, land flipping or speculation is gaining traction as demand outpaces supply, allowing investors to seek faster profits. 

The most simplistic way to describe land flipping is finding off-market land at discounted prices, purchasing it and making improvements as needed. 

Unlike real estate, with land, it does not involve much effort before you can sell.

The challenge is finding a motivated seller who can sell you a land property at a discounted rate. Typically, most investors go after real estate to sell or place on the rental market – they’re going after houses on land, not the land itself.

On top of that, you can start flipping land wherever you want. This offers the scope to invest all over the world in the best markets. 

By investing in land, you also avoid all the challenges and additional costs of building the structure itself. And you need less capital. 

Plus, you don’t have to deal with the tenants or anything involved in actually owning a home because it’s just the land with little to no improvements.

Obviously, you’ll have to do due diligence, do a title search and assess easements and any liens on the land, but you have to do that with any type of real estate.  

Investing in Land vs Rental Property

Typically, the downside of investing in land is having to wait for any kind of success or return on investment.

It’s generally a more conservative strategy than turning houses for quick profit.  

You never really know when the market is going to turn. That said, buying in the path of development is one way to get more value. 

As more government investment pours into certain parts of a city, green belt area or rural tourist destination, you can spot the early signs and get in early. 

If you buy a land lot in the middle of that value and hold it for two to three years, the value will increase. Do you know the exact date or year that the market will explode? 

No, but it could produce a better return than parking your money in something else. 

In the worst-case scenario, you could be left holding the land and paying fees and charges, but you still have an asset that could appreciate in the long run.

If you buy land in the development path and spread the risk by buying multiple lots, the chances of one or more of them turning a profit are higher. 

Investing in Land: FAQs

Access Emerging Markets for Land

In theory, you can buy land anywhere in the world. Some countries in Asia and the Middle East have rules about foreign ownership, but they are the exception, not the rule.  

Still, Asia is attractive as a continent for a number of reasons, including the good quality of life and lifestyle benefits, along with the relatively low cost of living.

Tax-friendly countries here also have a lot of investment opportunities, as do countries in Latin America and Southern Europe.

That said, there is no substitute for local knowledge. Looking for overseas deals online is not recommended and usually leads to inflated prices.  

You need boots on the ground, whether you’re visiting the country or hiring a local attorney who speaks the language and understands the legal system. 

Buying land can be a relatively safe investment that appreciates over time, especially in areas with growing populations and development.

Knowing where to start, however, can be a challenge. 

That’s why, at Nomad Capitalist, we provide hands-on support to investors and entrepreneurs entering offshore markets, optimising their taxes and ultimately, going where they’re treated best.

Whether you’re looking to diversify your portfolio, secure a Plan B citizenship or plant a flag in a high-growth emerging market, there are endless possibilities. 

We have a worldwide network of lawyers, estate agents, accountants and tax and company formation specialists. Our expertise and real-world experience come together when we advise your holistic, bespoke action plan. Discover how we do things here.