Resale and Investment: Thinking Long-Term When Buying Land

Let’s switch hats – from a happy new landowner to a savvy investor. Even if you intend to keep this land forever, it’s wise to buy with resale in mind. Circumstances change, and land is an asset. If you buy smart, your land can appreciate and give a solid return or easily find a buyer if needed. Tips to future-proof your purchase:

Location, Location (for Land Too): Proximity to growing areas generally increases value faster. Land within an hour of a major city often appreciates as urban sprawl extends. If you’re buying far out primarily for cheaper price, know that resale pool might be smaller too (fewer buyers want extremely remote). Doesn’t mean don’t buy remote – just know appreciation might be slower unless something like wind turbines or a new highway pop up. If you can snag land near a desirable town (with good schools, pretty scenery, etc.), that’s a plus. Hill Country land, for example, has historically appreciated well due to high demand and finite supply.

Unique Features Sell: Think about what would make your land listing stand out in the future. Live water (creek, river) is a huge selling point – if you’re deciding between two properties now and one has a year-round creek, that feature could pay dividends later. Same for big views, a nice lake/pond, or a well-kept vintage barn. Don’t underestimate human interest – a property with a story or rare feature (old oak grove, historical marker, etc.) can lure buyers. If your land has something special, protect it and highlight it when time comes to sell.

Avoid Odd Configurations: If thinking resale, a weird shape or landlocked portion is a headache. Try to buy land with a regular shape and clear access. Easements through other properties to get to yours can deter future buyers (as you probably know from when you were a buyer). Also large percentage of floodplain or unusable swamp might hurt resale except to specific buyers. Ideally, get a property with a good balance of features (some open, some wooded, etc., unless you have a specific use in mind).

Improvements – not Over Improvements: If you plan to improve the land (build a mansion, put in elaborate facilities), consider the market. Building a $1M home on a $200k piece of land in a county of modest land sales might make it hard to recoup that if you had to sell. Land buyers often value the dirt more than the house (unless it’s also something special). So, enjoy improvements but know ultra-custom projects might not return dollar for dollar. Practical, quality improvements (good fencing, cattle pens, a decent cabin) generally add value; highly personal or expensive ones (luxury lodge, huge pool) might only appeal to a narrow segment.

Maintaining Value: Keep up with maintenance. An overgrown, junky property will fetch less than a well-maintained one. It’s like “curb appeal” for land – mow the front pasture, fix broken gates, keep paths clear. It signals the land was cared for. When you go to sell, present it in its best light: mowed, maybe wildlife feeders filled so you can see deer activity, etc. That can literally influence offers by tens of thousands; buyers often make emotional decisions on land.

Market Timing: Land markets cycle. If interest rates are high or commodity prices low (which affects farmer buying power), land can stagnate. Ideally, hold until a seller’s market to sell. That might mean weathering downturns. If you buy at a good price to start, you have more flexibility. Resist panic selling in a down market if you can – land tends to hold value better than many assets because they aren’t making more of it. But it can take time to find the right buyer, so factor that into liquidity plans.

Income Streams to Help ROI: If you ever sell, having income can sweeten the pot for an investor-buyer. Things like a wind turbine lease, solar farm lease, cell tower, or even a reliable hunting lease can add perceived value. You shouldn’t buy land solely hoping for those, but if an opportunity arises to put, say, a cell tower on a corner for rent, that could make your property more attractive (though ironically a massive power line or pipeline might decrease beauty – balance that). If you manage timber, periodic timber sales bring income and attract buyers who want productive land.

Exit Strategy Options: When time comes, you could sell whole or subdivide. Many folks buy larger tracts, then eventually split and sell part at a premium per acre (smaller tracts usually fetch higher per acre). If your land is easily split (multiple road frontages, etc.), you have that flexibility. If it’s one contiguous block with one access, subdividing might require building a road, which could be costly. At least think of how you’d sell if needed – knowing those options can guide any improvements (like maybe you’d add a second gate on the back 40 if you might spin it off one day).

Legacy Consideration: If selling isn’t in your vocabulary because you want to keep it in family, then investment thinking is more about land health and passing it on. Teach heirs the value (monetary and personal) of the land to help ensure they keep it or at least sell it wisely if they must. Estate planning can save them a lot of taxes (step-up in basis, etc.), meaning they won’t be forced to sell to pay estate tax under current laws if you plan.

Treat your land purchase not just as a passion, but as part of your portfolio. Buy smart, maintain it, and you’ll likely see solid appreciation over time. Land can be both a joy and an investment – those aren’t mutually exclusive. With a bit of foresight, you can have your fun now and confidence that down the line, the land will return the favor financially if asked to.