More people — including CRE investors – are discovering the advantages of buying land to diversify their portfolios. After all, investing in raw land can be a sound move with minimal risk. It can offer a reliable source of passive income.
And since land is finite and tends to appreciate over time, it holds its value and can help you stabilize your holdings.
But remember: Not all land is created equal. The location of your property plays a huge role in how well it will hold its value and the potential returns it might generate. That’s why finding the right piece of land — and at the right price — is crucial.
Thinking about buying raw land? Let’s dive into the benefits so you can decide if it’s the suitable investment for you.
The flexibility of land investments
When you think of real estate investments, what springs to mind? Residential or commercial properties are probably the first things you imagine — and it’s not surprising why.
After all, many investors chase passive income from rental properties to build reliable cash flow and diversify their portfolios.
But is that income passive? Unless you have the budget to pay for professional property managers, running these rental properties can be highly stressful and time-consuming.
If you want an investment that is easier to manage, consider alternatives like timberland, hunting land, or farmland loan.
These tangible assets are much more flexible. You can directly harvest timber or farm your property yourself if you want to take a more hands-on and arguably more rewarding approach. Not the farming type?
No problem — you can lease it out to third-party operators and enjoy passive income while your land appreciates.
The portfolio-diversification benefits of owning land
Key takeaway: Whether you dream of developing a profitable farm or simply want to watch your investment grow, the land provides plenty of options to build a solid foundation for your financial future. Let’s dive deeper into its many benefits:
1. Land ownership is a low-maintenance way to introduce real estate into your portfolio mix.
Unlike multi-family or commercial buildings, land requires minimal upkeep. You can leave it untouched, and it won’t lose its value, or you can add simple features like a fence for security and to establish property lines.
And because raw land is essentially a blank canvas that you can use however you wish — for development, recreation, or farming, depending on its location — you have plenty of room for creativity and strategy when you decide to monetize it later.
2. Land can be a profitable investment in the long term.
Because raw land suits the buy-and-hold investment strategy, you can allow it to appreciate over time without the hassle of constant management. You don’t have to deal with tenants or repairs.
You don’t need to do anything at all. When the market is correct, you can simply sell your land for a profit.
Do you need to generate income while you wait for that perfect time to sell? In that case, you can lease your land and use the rental income to easily cover property taxes and other costs.
3. Land ownership is not as expensive as you might think.
There are many deals to be had especially in emerging markets, so you can start investing and diversify your portfolio even with a smaller budget.
Of course, you need to protect your investment with careful planning. Start by setting a realistic budget and defining your diversification goals. Consider working with a real estate agent or a land investment expert in the area you’re interested in.
4. Land is a stable asset.
It is less susceptible to market fluctuations, so it’s pretty easy to allow your investment to grow steadily over time. As a tangible resource with limited supply, land also tends to consistently appreciate, providing you with a sense of security and peace of mind. You can build long-term wealth and create a legacy for future generations with a strategic approach and the suitable land loans.
5. Land can be your ticket to a comfortable (even luxurious) retirement.
Let’s say you own a sizable piece of farmland. Instead of managing crops yourself, you can lease it to a thriving agricultural operation that can handle the day-to-day work while you receive consistent rental income.
Over time, the value of your farmland is likely to increase as agrarian land becomes scarcer. This creates a dual benefit: regular income and asset appreciation.
Or, let’s say you own a commercially zoned piece of land. Why not lease it to a stable business to create a steady rental income stream?
As the property’s location becomes more desirable, its value will rise. This means your investment is not only generating income but also growing and appreciating — all without you doing much.
Are you a developer at heart? After buying your land, you can explore options like subdividing or improving it to increase its value and boost your returns.
These are three examples of how land can be an intelligent portfolio diversification tool and retirement goldmine. It offers a degree of stability and potential growth that many other investments simply can’t match.
6. Enjoy flexibility depending
Enjoy flexibility depending on where your land is located and any local zoning restrictions, you can use it for farming, storage, recreation, or building a commercial facility.
Or if you prefer a hands-off approach, you can simply hold onto it as an investment. The possibilities are endless, and best of all, you adapt your plans as your life changes — which is the point of diversifying your portfolio.
7. Land ownership can lighten your tax burden.
Did you know that property taxes on vacant land are typically lower than on developed properties? Beyond this, there might be tax credits or deductions available to landowners. These provisions vary depending on your specific situation and local laws, so consult with a tax professional before you buy anything. By maximizing your potential for tax savings, you can significantly boost your overall return on investment.
8. Land is a reliable appreciating asset.
Unlike buildings, land doesn’t depreciate because it’s a finite resource — there’s only so much of it to go around. Demand for land also often increases as populations grow and economies expand, making it a uniquely profitable investment.
And while stocks, bonds, or other real estate can fluctuate in value, land has a proven track record of holding its worth. It can add a steady and reliable component to your investment portfolio.
Conclusion
Whatever your portfolio diversification goal — whether you’re seeking security, aiming to double your money, looking to create some passive income, or simply want to add low-maintenance real estate into your mix — land ownership provides a range of advantages.
Unlike suburban real estate or even rental properties, rural land investments offer unique advantages and stability.
We can guide you through the land investment process, helping you make informed decisions and secure the best opportunities.
Connect with our experts to find the perfect piece of land that meets your needs and provides your portfolio with the numerous diversification benefits of land ownership.
Explore land loans today
Private Capital Investors now offers land loans on top of commercial real estate loans. Tell us about your project and we can tailor land loan solutions to your unique needs.
100% financing
No down payment? Not a problem. Our 100% land loans free up your capital for development or other investments.
Low credit score? It’s not the end of the world.
Being commercial real estate specialists, we understand the potential of every land project. We have land loans for borrowers with less-than-ideal credit scores.
Need a land loan fast?
We offer quick land loan closings so you can grab those once-in-a-lifetime land-buying opportunities.
Eligible types of land
Secure the land of your dreams for vacant, rural, or operational agricultural loan for financing.
Looking to invest in recreational land or explore alternative agriculture? We have options for you. From cattle ranching to citrus groves, our specialized loans support a wide range of agricultural pursuits.
Eligible land transactions
With our land loans, you can buy new land to expand your operations or grow your existing farm if you need more acreage. You can also use the proceeds to finance agricultural activities (from full-time farming to part-time hobby farming) or to pay for unexpected expenses.
Are you looking to invest in recreational land for activities like fishing, hunting, or camping? We have land loans for these purposes, too.
Your land loan specialist
Need land financing in Miami, Denver, Phoenix, or anywhere else in the US? We’ve got you covered! Enjoy benefits like:
- Low rates starting at 7%
- Nationwide lending – we’re where you are!
- Lightning-fast approvals – get funded in as little as 14 days
- Flexible credit requirements – good credit is helpful, but not always required
- Exceptional customer service – we’re here to guide you every step of the way
Unlock your land’s potential with our financing.
Private Capital Investors can help you turn your dreams of owning land to diversify your portfolio into a profitable venture. Contact us today for a free consultation.
