Can you Time the Land and Real Estate Market?

The short answer is No, not to perfection, but you can get pretty darn close to it. The most lucrative strategy to buying real estate in Arizona, or in any state or any investment for that matter, is the long held quip, “buy low and sell high.” The typical Arizona market is just starting to climb the growth ladder as population expands and job growth continues, we are seeing prices are already starting to rise. Now is one of the best times to make money with real estate. The condition of this market is favorable to you, the buyer, but this will not be the case for very long as prices continue to rise.

If you are looking for a short term hold, take action now! I can’t say it plainer than that. Many people are asking “how can I make money with land investments?” Simple. Buy land. Buy now at low prices and with terms that are favorable in a growing area. Sell in two, three, maybe four years or to maximize your investment for greater returns hold onto your land through the next real estate cycle or the one after that.

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Wide open spaces, sunshine, and healthy lifestyles are only a few of the favorable living conditions that Arizona has to offer to its residents. Did you know the state also has seen one of the highest percentages of population growth in recent years due to economic growth? Phoenix is at the top of the list. Also, did you know that Arizona is one of the top states in the US with the highest real estate price appreciation for the last 20 years? Some of the highest appreciation cities include Lake Havasu City (6), Prescott (8), Bullhead City (12), Prescott Valley (16), and Kingman (18) according to Neighborhood Scout with data tracking back since 1990.

Prices of land in Arizona are down significantly but they tend to follow the single family market which is already reaching higher price points. When land prices come up, the sharp rise is likely to be fairly quick. Considering that values of land increase over time, now is particularly a great time to buy land. Increasing population growth, environmental laws, demographic migrations, rising costs of living and other factors continue to put pressure on values of land. It’s only a matter of time before we see the historical cycle’s upward march.

As you consider it, these are some tips to keep in mind as a land investor (not necessarily relevant if you have a different reason for purchasing land such as for personal or commercial use).

  • Look for land parcels for sale where the city streets and paved roadways end. Lots located outside the city limits, but aligned to development paths can have dramatic appreciation when new city infrastructure goes in.
  • Rural land parcels potentially have the best chance for long term appreciation. Speculation on city lots can involve more risk if you are novice to real estate investing.
  • Look for lots for sale by owner. As a buyer, you are in a position to ask for terms you want right now in the marketplace and that will change as prices rise. Owners are generally more flexible than constitutional sellers and realtors.
  • Real estate is a stereotypical scarce resource. One cannot go out and create land. Real estate is also tangible. People can see it, live in it, walk on it and make money from it.

Quality real estate properties purchased at the right price with reasonable financing can weather off recession over stocks and other investment alternatives. In summary, try to keep in mind these main points. Inflation will raise prices on everything, including land. The increasing demand from migration and market conditions for Arizona properties is putting pressure on the land market. Lastly, it’s important to use well-researched practices for greatest returns.

Has anyone had success investing in the land market? What other tips do you have for fellow land investors? Leave your comments below.