| Are you aware in the midst of a slumping housing | | | | purchasing land. Why? The premise is - historically land |
| market that land in many places is appreciating in | | | | has never gone down in value. |
| value? So why aren't more investors pursuing land as | | | | Developers are sensing this trend and shifting their |
| a part of their investment strategy? The answer is | | | | strategy. In the past, a developer purchased a large |
| that most investors are focused on the | | | | tract of land near a city and then subdivided it into lots |
| over-developed residential and commercial real estate | | | | to build houses. Now they are buying land in desirable |
| markets and haven't considered raw land as a viable | | | | rural locations throughout the country, dividing it into |
| option in which to build their real estate career. | | | | smaller parcels and marketing to Boomers. As |
| Land is the place to be in 2008 and 2009 | | | | documented above, they are having great success. |
| According to the USDA, there are 2.2 billion acres (yes, | | | | Even Wal-Mart is addressing the migration to rural |
| that's billion with a big B!) in the United States. Of the | | | | areas |
| total amount of land, 1.6 billion acres can be bought and | | | | FL and AZ are no longer the primary destinations for |
| sold. Some of you are thinking, "So what - are people | | | | retirees. Retirees are looking all over the country to |
| really purchasing land, especially when prices for | | | | purchase rural land on which to retire. The core |
| houses in many places are falling?" The answer is a | | | | criterion for their purchase is that the parcel is within a |
| resounding, YES! | | | | reasonable driving distance of a Super Wal-Mart and |
| In an article for LandFlip.com, Emily Wilson, a realtor in | | | | medical care. Wal-Mart has sensed this trend and they |
| Shelbyville, TN (south of Nashville) was asked to | | | | are building many of their new stores at rural |
| comment on how land is selling in her area. She stated | | | | crossroads cities throughout the US - thus opening up |
| "acreage is selling better than homes in subdivisions in | | | | areas of land originally thought too far from amenities |
| our Middle Tennessee area. We sell a lot of horse | | | | and supplies. |
| farms and high dollar properties, and them that | | | | Why is there a surge of interest to move outside the |
| have...still want more, but if I were depending on starter | | | | big city? |
| home sales for a living, I'd be crying hard times. Instead, | | | | Boomers are moving to rural areas to experience the |
| our company sales are up $1 million over this same | | | | beauty, peace and serenity of the country. Unlike |
| time last year." | | | | previous generations, they are retiring earlier and want |
| 97% of the United States is designated as rural land | | | | to live where they can hike, bicycle, garden, start a |
| When most investors think of land, they think of | | | | horse farm or simply commune with nature. Ultimately |
| parcels in or near the city limits. Most of these | | | | it is to leave suburbia and its complications. It is a |
| properties are zoned as commercial parcels. I don't | | | | dream for a new start in the "second half" of their life. |
| focus my efforts on this type of property. But rather, I | | | | I talked recently with a 50 year old investor from New |
| pursue rural or raw land as 97% of our country is | | | | York City. He has lived his most of his life in an |
| designated as such. Raw land is property that is far | | | | apartment. He commutes over one hour each day to |
| from existing patterns of development. Also, it has no | | | | and from his office. He loves gardening but has never |
| improvements such as utilities, landscaping, drainage or | | | | had a back yard to enjoy this hobby his entire adult life. |
| buildings. It can be as small as a quarter acre or as | | | | He is starting to think about his retirement years. His |
| large as thousands of acres. More than likely the | | | | dream is to buy a parcel of land in rural GA so that he |
| parcel is on a dirt or gravel road. If one is to live on it | | | | can fulfill his yearning of having a garden and a more |
| they would have to first drill a well for water and install | | | | relaxed lifestyle. He is working hard to make that |
| a septic tank on the property. | | | | dream a reality. This is one example why those |
| The demand for raw land is increasing all over the | | | | nearing retirement look at land as a part of their future. |
| country like never before. One group that is buying | | | | Boomers are buying raw land in all shapes and sizes |
| land in this economy is: | | | | What type of land are Boomers purchasing? |
| Retiring Baby Boomers | | | | Remember it is about the destination - living in a rural |
| According to a poll commissioned for the National | | | | setting. Most envision living on a small parcel of land |
| Association of Realtors (NAR), 60% of Boomers want | | | | (20 acres or less). They don't desire a large tract of |
| to retire to a rural area or small town. Also, one in four | | | | land as their focus is living near a small town (near a |
| Americans born from 1946 to 1964 own more than | | | | Super Wal-Mart and medical care). |
| one property, according to a survey of nearly 2,000 | | | | Ryan Folk, editor of keeps his finger on the pulse of |
| Boomers by Harris Interactive for NAR. | | | | recent land sales. According to Mr. Folk, what is selling? |
| Boomers have "an almost insatiable desire for real | | | | He says "Small home-site/retirement tracts under 20 |
| estate," David Lereah, the NAR's chief economist said | | | | acres... [and] very large, beautiful farms, ranches and |
| in a statement. They see real estate as "a way to | | | | plantations." |
| build and protect a nest egg." | | | | Not only are small parcels of land selling, but there is |
| Why vacant land? "For a lot of people, it's a dream to | | | | also a growing segment of Baby Boomers that are |
| have a second home, but they really can't afford it," | | | | purchasing 100's and sometimes 1000's of acres. Many |
| says Peter Francese, founder of American | | | | Boomers have the financial means to purchase larger |
| Demographics magazine, who was asked by the | | | | tracts of land. |
| NAR to help interpret the survey, "So, they buy a lot." | | | | I was at a wedding recently and sat next to a retiring |
| Real estate ownership has become a key component | | | | army colonel. When he learned that I educate |
| of the Boomer's retirement plans. The July 2008 issue | | | | investors on the dynamics of land, was he ever giddy! |
| of Business Week reports that "Baby Boomers are | | | | He had a dream of leaving the concrete jungle and |
| retiring at the rate of 10,000 every 24 hours ...within 2 | | | | making a new start in a relaxed, carefree setting far |
| decades a record $17 trillion will change hands from | | | | from the stresses of life. He recently purchased 300 |
| corporate pension funds and 401(k) retirement plans | | | | acres in southern GA within a half-hour drive of a |
| into the hands of retirees." This group will continue to | | | | mid-size city. During his due diligence (the process of |
| drive a portion of their investment portfolio into real | | | | investigation, performed by an investor, into the details |
| estate, specifically raw land, fueling the demand for | | | | of a potential investment) he learned that he could |
| land like never before. | | | | subdivide the land. He plans to retire on 50 acres and |
| For example, a developer purchased a large tract of | | | | then subdivide the rest in the next 5 to 10 years. This is |
| land in Western North Carolina and divided it into 1800 | | | | a growing trend among those looking to retire. |
| parcels ranging from 1 to 6 acres. The lots range in | | | | How can investors profit from land? |
| price from $40,000 to $100,000 (depending on the size | | | | Some of you are saying to yourself: How can I as an |
| of the parcel and it's location in the subdivision). Within | | | | investor profit from land? Are there really that many |
| one year they sold 800 parcels! The essence of their | | | | land opportunities that I can get into this niche market? I |
| promotional campaign - buy the lot and grow your | | | | have been a part of over 600 land deals. My |
| money as the property appreciates (like it is a stock). | | | | observation is that there are millions and millions of |
| At some point the landowner will either build on the lot | | | | landowners who are ready to sell. Are you surprised |
| or sell it. They also offer an affordable monthly | | | | to learn that in some places in the country there are |
| payment program to those who cannot pay in full. | | | | actually more buyers then sellers? I make a living |
| There is no "deed restriction" for this community which | | | | connecting buyers and sellers. The marketplace needs |
| means the buyer is not required at ANY time to build | | | | more investors to get involved! |
| on the property. | | | | There hasn't been a better time in our history to profit |
| One of the other motivations for this generation to | | | | from land. Right now there aren't enough investors to |
| invest in land is that they are nervous about having all | | | | reap the rewards of profiting in vacant land real estate. |
| their funds in investments related to the stock market. | | | | Learn to buy dirt as they are not making any more of |
| Certainly we have seen a lot of volatility in the stock | | | | it! |
| market in recent months. More and more investors are | | | | Here's to your success in real estate. |
| taking a portion of their investment portfolio and | | | | |