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The author of this blog comes up with a compelling argument of why the buy and hold strategy may be back for acquiring residential real estate.  Well, what about raw land?  He points to three key indicators of a viable buy and hold strategy in residential real estate:

1.  – Long term population trends must be rising.

2. – The cost of construction will continue to rise over time.

3.– Normal rules for supply and demand will dictate value in the housing market.

In raw land the investing return chart would look like a gradually ascending straight line and then immediately shoots way up once a developer enters the market.  Housing is much more slow and steady.  Almost like comparing a blue chip stock like IBM to a penny stock that costs very little, but has tremendous upside potential (or you may not see any return).

I think the days of buying a house as your largest investment are officially done.  Kaput. Over.  It really never made much financial sense.  Emotionally speaking it’s fantastic.  Good schools for the kids, nice lawns and you can make as many improvements as you like.  Yet, once you factor in the property taxes, interest costs on financing, repairs and maintenance, property insurance and all the other headaches associated with home ownership it makes more financial sense to rent.  This article spells out the reasons renting makes more sense today.

Nevertheless, owning land has none of the headaches of home ownership and all of the benefits of investment leverage and seriously higher return on investment potential.  Plus, you can always make improvements just like with housing and enjoy your land forever without any of the maintenance costs.   They say land is the basis of all wealth well.  I think it’s also the basis of happiness with an investment as well.  You can’t take your kids camping on a stock or bond!

In short buy and hold land and you’ll be happy, your family will be happy and eventually your bank account will be happy.

There really are plenty of ways to make extra money using only the land you already own without selling it. If you could use a few additional bucks, and we all could from time to time, you should consider some of the options you have. If you are a land owner, even if it’s only a small tract, you have access to some of the best ways to make extra money out there. Don’t continue living life from paycheck to paycheck, take advantage of these ways to make extra money.

Paintball:

Many folks love paintball wars, but it’s really hard for most to find a suitable place to play. Use this as one of the ways to make extra money each month. Try to section off all or part of your land. Allow groups to rent it for the day to have their wars. This is one of the best ways to make extra money for those that own some land. In fact, you could easily charge $40 per person, for a half day. You can see just how quickly that could add up. In no time, you could have a great business, making lot of cash on the side. It really is one of the most successful ways to make extra money.

Pasturing animals:

If you have some fields, or even some wooded areas, you can use it as one of the ways to make extra money. Rent out the area to someone in need. Just take a look through the paper, there are tons of horse owners out there that just don’t have the space they need for their animals. You can capitalize on this and use it as one the best ways to make money without having to do much of anything. If you already have the land, you may as well explore the ways to make extra money with it. You generally won’t have too many problems finding people willing to rent your land for these purposes.

Hunting rights:

If you own land suitable for hunting, you can lease or rent your land out to hunters. This is one of the best ways to make extra money. If you have big deer in your area, there’s a good chance you can charge a premium price for rights to your land during the season. Best of all, you can charge by the person or charge a flat fee. You are in control with this one, making it one of the best ways to make extra money, while maintaining full use of your land during the off-season. If you have wildlife on your land, you’ll have no problems finding someone to pay you to use it.  “Duck season.  No, Rabbit season…”

Storage:

If you have a building on site, you won’t have to invest a dime, making it one of the more lucrative ways to make extra money. It may even be a wise investment to have the building put up. Have you noticed how many mini storage rentals there are? Those with an old barn could store four wheeler or boats during the off-season, making it one of the easiest ways to make extra money using your land. People have lots of toys these days. Trailers, campers, snowmobiles, classic cars, just about anything you can think of. Best of all, nobody seems to have enough room to store their stuff, making it one of the realistic ways to make extra money.

Camping:

You may be able to start a primitive campground with little or no start-up money, making it one of the simpler ways to make extra money. If you have a field, a few stakes to mark the sites a few campfire rings may be enough to begin. Simply place an ad in the paper or Craigslist and you’re sure to get plenty of inquiries. You just may end up starting a legitimate business without much effort at all, making it one of the better passive income ways to make extra money.

Logging:

Chances are there are loggers in your area that will pay big bucks for the timber. They will do all the work, and pay you when it’s all said and done. This can really be lucrative for those with larger wooded chunks of land. It’s one of the hands off ways to make extra money. You’ll be surprised at just how much you can make this way. Call the loggers in your area to find out if they are interested. Without much effort, you could get a check for thousands of dollars. Best of all, the trees will grow back on their own, making it one of the renewable ways to make extra money.   Timberland is big business.

Flea markets:

Rent out your space and start-up a flea market business. All it takes is some ambition. You can charge the vendors $15 per table, per day. Do you know how many small tables you can fit on an acre of land?  Tons of them to be sure, making it a great and low-cost way to make some extra cash on your parcel. Give it shot, it just may work in high traffic areas.

Cropland:

If you have a field, there’s a good chance a farmer would rent it from you to plant crops. You can expect to earn some cash this way, without too much trouble. If there are farmers in your area, and you have some tillable land, it’s one  surefire way to make extra money.  Best of all, you really don’t have to be involved in much of anything other than cashing the checks.

Power leases:

I know what you’re thinking…  In this day of alternative energy couldn’t I make several thousand dollars a month leasing my rural land to a wind generating company or alternative power company?  Well, that’s a more in-depth blog and I’ll be discussing that in the near future.   I like the way you’re thinking though…

Conclusion:

When you own land, you have plenty of ways to make extra money either passively or actively without quitting your full-time job.   No matter what you decide to do, you will want to make sure these ways to make money are legal in your area. Be sure to get all the correct permits with the County and double-check the laws. Now that you know some of the ways to have that raw land bring you some extra cash, check them out and get started.

I avoid Home Owner Association or HOA or POA fees like the plague.  I once got involved in a gorgeous development in Treasure Lake Pennsylvania and learned the hard way how these HOA’s work.  In an ideal world the HOA would provide needed services for the community and keep the standards of the community high enough to insure the value of the community is protected.  In reality, they are toxic politically with cliques and special interest groups jockeying for power and there narrow causes that have nothing to do with the community as a whole.  I found working with these groups absolutely exhausting and without any real business logic.

Today, when I look for raw land I avoid any community no matter how beautiful if it has an HOA attached to it.  I have found most people whom invest in raw land like the idea of no restrictions and low holding costs as they watch their investment grow.  Nobody likes a third-party telling them how to live and then charging them more money year after year for services they may or may not deem important for them.  I think some of these communities can be wonderful, but if you’re just investing in the land I would advise against buying where there is an HOA.

Cool YouTube video I found– The Power of Words

When I was 22 years old I came up with a theory of the meaning of life and I still think it holds true for me today.  I was sitting on a gorgeous beach off of Coogee Bay in Australia pondering what it all means.  Suddenly, in a moment of clarity it just came to me.  The meaning of life is to serve.   Think about it.  We are all interconnected and we're all serving eaching other in one way or another.  We get pissed when somenone isn't "pulling there weight" and we consider people like Mother Theresa saints for serving the poorest in the world.  Bill Gates was rewarded with billions for making all of our lives easier with his Windows operating systems and Mother's are revered (or should be) for their service and sacrifice raising chiidren.  You serve your family, community and whomever else you interact with daily doing what you do. Every plant and animal serves us in the food chain and we are lucky to be on the top of it.  So basically, the meaning of my life is to serve our real estate investors the best way possible so what I do in my life has meaning.  I used to think that teachers and doctors and clergy had the most meaningful of lives because the way they serve us is so important, but why judge it?  You're probably serving someone the best way you know how and it's most likely making a positive difference in the world. I know this blog is not about existentialism, but the next time I interact with a customer you will know it means much more to me than money or status or accomplishment.  It is the meaning of life to me to serve and serve well. 

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 We are a new breed of land sellers that don't do credit checks and don't use 30 page long contracts. We don't try to confuse you with legalese and complicated financial notes.   We are old school land sellers… 

Remember the days when a land deal was done by a simple hand shake?  Well, we are doing it the same way except via the internet.  Your word is your bond and we use simple contracts stating very clearly the following:

We guarantee the property is free and clear of liens or encumbrances.  That is no title issues.

We guarantee you will love the property or we will exchange for property you do love or refund you.

We guarantee the property has no environmental issues.

You guarantee you will pay us on time each month. 

That's it.  Old school.  We use a five page purchase sale agreement, a two page land contract and a two page promissory note all written in plain English with no legalese to confuse you.  Old school.  

Interesting article from Steve Bergman of Inman News quoting:

"Two years ago, H. Ross Ford, CEO and president of TCN Worldwide in Plano, Texas, argued in print that the credit squeeze following the subprime blow-up created opportunities for raw land acquisitions.

His thesis held that in certain hot markets like Nevada or Florida, homebuilders had amassed large amounts of raw land for development, but with the value of that land heading deep into a trough they needed to dispose of all that acreage.

I asked Ford if his argument was still valid two years later. "The dynamics haven't changed," he replied. "A tremendous amount of raw land has become devalued in the course of the economic cycle. As such there are opportunities to buy at the bottom of the market."

Most of these opportunities have been unrealized, generally for two reasons.

 1. If you don't have the cash, it's tough to find financing for raw land deals. Ironically — but logically — in places like Florida, Las Vegas or Southern California where there are tremendous bargains in raw land, the likelihood of getting financing are the slimmest.

2. For investors, a second roadblock has been a reluctance by financial institutions to just dump assets, including raw land, into a commercial real estate market that is already flooded with product."

Our company is able to manufacture more demand simply because we are able to finance on easy terms.  I know our property isn't prime residential buildable lots in the suburbs, but it's good land at a great price.