Buying land?

[Jerry-rigged]

So my wife and I are out driving around this weekend looking at land - 1 - 1.5 acre lots. These were in deed restricted developments, in parts of town that I feel will be high growth in 5-10 years. If my wife and I build, it will probably be in 5 or so years.

My question is, if we buy and end up not building, what kind of return would we get on the land? Is break even about the best we could hope for (after taxes every year, etc.)? Is land value as volatile as stocks?

There have been two other times that my wife and I have been "on the bubble" about a land purchase, in both cases, we passed, and the lots sale price in that area went up by 50% in 2-3 years. :( This kinda makes me feel like jumping on one of the lots we saw this weekend.

Jerry.

[InfamousJ]

"what kind of return would we get on the land?" Ha, doesn't everyone in this world want to know the answer to that question.

Gotta go with your gut as risk and reward go hand in hand. You could also lose so in the end it is up to you. But you'll never know if you don't take the chance.

[Jerry-rigged]

OK, you got me there.

I guess what I am looking for is kind of a " Historical Market average"

I hear that stock funds historical average about 105 a year, bonds about 3-4%, where does land fall? Excluding the freak crash market, how volatile is land as an investment?

[Kosta]

Run a model on the "carry cost" of the land, take a hard look at the area growth (speculation) and decide when you need to exit the market (how long to stay in). This will help take some of the guess work out of it. Real Estate has always appreciated, on average 4% but where elese can you place your money and do better.. that is the question.

[stargazer]

Land will only go up. They are makin no mo. The thing Vickie and I go by mostly is the area, schools, taxes.

I am looking in the Marble falls area along with the San Leon area....OK Before you go UUUUGGGHHH to San Leon.....I have been told by some folks I trust that the San Leon area is the next Kemah....... In'73 you could get some property in Kemah, with a home, very cheap, Now look at what they are selling there. 100K for a lot and an old tear down house.
Same goes for San Leon...resonable price ' Now' but wont be long before it also is in the 100k price range.

Marble Falls seems to be an Investment area, from what we can gather, Is a good deal but, You have to weigh the cost of infastructure vs growth for the area you are looking at.
Land is always 'As I see it" an good investment (Its a medium term thing) and the old adage Location, Location , Location, is still true there.

Just my $.02

[nellayor]

My dad always told me that they won't be making anymore land, so if you find some you like and you can afford it, buy it. I've been looking down around the Rockport area for some land to buy. At this point I'm wanting to retire down there, quite a few years away, but not a bad investment, because rarely IMO will land depreciate. It seems to always increase in value. Just not always at the same rate. So if by the time we retire we change our minds, hopefully we can still sell for a profit.

I agree with stargazer about two things. Location, Location, Location, and about Marble Falls. It is a pretty little town close enough to Austin. It should continue to keep growing. The prices there are still reasonable. Right now people are making a killing on their land in the Dripping Springs area. The Dripping Springs area is booming and land is going at top dollar. Epecially East of Dripping. People who bought land just a few years ago are even making a killing.

[ptfisher]

J-R

Living in Alvin gives you great Proximity to water. Over the years Houston has grown in population. As peoples incomes rise they look for recreational property. Galveston/SLP property are getting harder to find and more expensive. I would look at areas south of you for better bargins. Bastrop Bayou, San Bernard river, Caney Creek and Colorado River ( I don't care for the Brazos River). It will be an investment the family can enjoy ( fishing/boating ) until you decide to build a house on it. If your in a neighborhood all you can do is drive by and look at it. If you do elect to sale it down the road, list it in Houston. It will sale a lot quicker.

PT

[Jerry-rigged]

My family has a weekend house on a "good fishing" creek, so that is not a priority for my home. The development I am looking at now will have water access (if the deveoper keeps to his plan), but only one waterfront lot (irreguler lot) Wife an I have decided to wait till the end of summer to buy - she is just starting a new job (and starting to pay student loans :( ) so we are going to give the loans and job a month or three to settle down before we jump on anything.

Jerry