by Javier Morales

Created on: September 28, 2007

You have thought about owning your own car and house and investing in the stock market, but why not try staking a claim to a piece of land?

During an upswing in development, land appreciates faster than buildings. If you have enough capital to invest in land, now is a good time to invest in vacant office and industrial-zoned land, as land shortages and low vacancies in existing buildings drive values up, according to property experts.

In other words, during an upswing phase in office and industrial property such as what is happening now in many places, land appreciates much faster than developed properties.

The difficulty lies in the shortage of zoned office and industrial land. It is very good to bank in land, if you can find it. The residential market, on the other hand, is fully priced and you do not as a rule buy an asset that is fully priced.

Residential property prices should grow at about the consumer price index inflation rate for the next number of years. Therefore, office and industrial-zoned land is a good investment. Land values are skyrocketing for all types of commercial land.
The value of industrial-zoned land has risen 300% in the past 18 months in many parts of the world. This applies to zoned retail, commercial and industrial land. All three sectors have seen enormous growth in value.

Investment properties have not increased in value as much as vacant zoned land. The reason for the increase in the value of zoned land is due to the low vacancy levels in existing buildings and also the shortage of supply of land which is ready to be developed.

It can take up to 18 months or more to rezone land from agricultural or residential to other uses, whilst the demand for zoned land is such that developers are not able to wait that length of time and therefore require land that is already correctly zoned.

These factors have put upward pressure on land values. The increasing rentals in all the sectors have also made it possible for developers to pay higher prices for land and still achieve acceptable returns on new developments.

Since lots are guaranteed to be built and located within the respective community while priced wholesale, the greatest value is in the price itself.

For example, if the MLS (Multiple Listing Service) listings for quarter acre interior lots within a given community range between $15,000 and $17,000 and they are provided to you wholesale than it is a very fair deal regardless of the exact location and physical attributes of the specific lot.

Land

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