Is A Lot A Safe Investment At The Current Time?
With all of the ups and down over the last few years in the real estate market, many investors are left to wonder if it is yet safe to purchase and invest in land. Buying land does not have to be frightening and if you keep these basic principles in mind, you should not have any problems.
The first rule to remember is that if you own real estate the “right way” then it is always a safe and good investment. Putting the bank at arms length allows you to save money over the long haul and will limit any amount of control they have. In times like these, being free of the bank is vital and offers the highest degree of freedom and stability. I realize this is not an option for most people, so maybe consider it as an ideal more than anything else. After achieving this monumental feat, realizing the freedom that comes from doing it, and avoiding the taxes that can prevent it can be a windfall.
Keeping your real estate that is free of debt as rental or income properties is a great way to compile a source of income that is always there when you need it. If you earn a six figure income and want to avoid paying the full amount of taxes on it, you can reduce your tax liability on your net sheet by buying real estate. Why not simply use your own income to purchase your investment property, as opposed to sending it in to Uncle Sam, and then be taxed on the income generated by the property, which will be dramatically lower. As always, get the input of your accountant before you try anything like this or you may end up costing yourself.
If you do not have enough money to purchase a rental outright, maybe you can save enough money to simply buy a building lot and wait until you can save up more money to build on it, after all, there are more than the market needs right now. Waiting on the extra building lots to be absorbed into the market may take time, but as soon as it happens the market will be a good bet again. They really are actually a good one right now, they simply will not yield much return for a while which makes the scenario in which you would invest an investment with a higher return more appealing.
Whenever you involve the bank you incur fees for loans and interest payments on top of mortgage insurance they insist you pay, which all run up your monthly payment and actually increase the likelihood you will fail. There are other options for getting rentals from the land you own, like doing joint ventures with a local builder, so keep your eyes open and make sure to cover your own assets in all of your business dealings.
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