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Dr. Kalinda Rose Stevenson
Why Real Estate Investing In Raw Land Is A Safe Strategy During The Recession
Welcome back!
Real estate investing, for some people, has gone from a fast way to create wealth to a faster way to lose money. Do you wonder if there are any safe real estate investing options during the Great Recession?
A friend attended one of the best-known real estate investing seminars. She did what she was taught to do, and bought investment property. Her plan was to rent the properties, make profits, and generate wealth. This wealth-producing strategy has worked in good economic times and bad economic times. It worked especially well during the years when real estate values seemed to be on a never-ending climb to unprecedented heights.
Unfortunately, real estate prices can also go down. My friend bought rental properties when market values were at their peak, just as the “real estate bubble” was about to burst. The last time I talked with her, she told me that she had seven mortgages on rental properties and no tenants. She was broke. She was being sued by a contractor who worked on one of her investment properties. And her real estate agent turned out to be a crook. Her wealth-building dreams collapsed as her real estate investments turned into a nightmare.
Who knows how many times this story is being repeated right now? How many foreclosures, how many bankruptcies, how many broken dreams are the result of real estate strategies that worked so well during boom times, but left hopeful investors stuck with bad investments when property values started to drop?
So, do you give up entirely on real estate investing during this time of economic crisis? It’s a fact that great fortunes often start in the worse economic situations. Even now, when the news media tell us on a daily basis that these are the worst economic times since the Great Depression, it is important to remember that real estate investing still works, and still creates wealth. The important point is to know what you are doing, and to adjust for current conditions.
This leads to the question: What kind of real estate investing protects your nest egg and increases your wealth during the down cycles of real estate markets?
One of the safest real estate investments is raw land that is pre-development land. Even if prices are stagnant now, pre-development land will increase in value during the next real estate boom. How do you know that that there will be a next real estate boom? It is the nature of real estate to undergo up-and-down cycles. In addition, the population is increasing dramatically, and real estate development will continue to sprawl farther out from developed areas. This means that pre-developed land will be developed, sooner or later.
What are the advantages of buying raw land rather than developed properties, such as houses or apartments? One of the biggest advantages is that you are not going to rent out pre-development land to tenants. This means that you are not depending on income from rents. You don’t have to worry about evicting tenants who lost their jobs and stopped paying the rent.
If you have investment money you want to put to work, such as money in an IRA, but you don’t want the headaches and heartaches of dealing with rental properties, one of the best options right now is to put your money into well-chosen pre-development land.
Kalinda Rose Stevenson, Ph.D. invites you to attend a FREE webinar about investing in raw land, “How Strategic LandBanking Lets YOU Be Part Of The Great American Land Grab Right Now.” She is the author of No Money Limits For Real Estate Investors: Discover The Money-Making Secret In The Real Estate Game That Transforms Your Money Struggles Into Financial Abundance, National Best Books 2007 Awards Winner in Business: Real Estate Category and Finalist in Business: Personal Finance Category.
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