According to the December LANDTHINK Pulse results, 50% of respondents said they would rate land as an “excellent” investment heading into 2024. We’re only two weeks into the new year, and the 2024 land market forecast looks bright. The land real estate market has remained a strong pillar in an otherwise tumultuous economic year. There were fluctuations that sparked discussions about the future of the land and residential real estate market. Increased inflation and fierce competition to buy properties in a lower-than-average inventory market were hot topics.
Last month, the December Pulse asked: How would you rate land as an investment heading into 2024?
The investment landscape has been evolving over the past few years, but land ownership is still on the radar for long term investors looking to park cash somewhere and forget about it for a while. Investing in land has always been considered a solid investment. It is a tangible asset, is less volatile than other investments, requires little to no maintenance, and you can make money off it quickly.
In an era of historic inflation, one alternative investment has been making its way into portfolios as a diversifier and potential hedge against stubborn price pressures: land.
But if you’re wondering whether 2024 is a good year to invest in land, the answer is a resounding yes, no matter what actually happens. Specific factors make this year the time to add a new land asset to your portfolio. Let’s explore some of the reasons.
Optimistic Economic Picture
The global economy continues to gradually recover from the pandemic and Russia’s invasion of Ukraine. The growth trajectory is expected to continue in 2024. A growing economy often leads to increased property values. With the 2024 presidential election on the horizon, investors may become increasingly concerned about the ramifications of an election on their portfolios. Hard assets like land are tangible and have intrinsic value through good times and bad.
Land Is An Inflation Hedge
Land, especially farmland and timberland, have historically done well in inflationary conditions compared to other asset classes. While inflation remains a big risk to financial markets, land holds its physical value throughout time and its finite supply results in value appreciation over time. Compared to other investment types, like stocks, annuities, and cryptocurrencies, land real estate is widely considered to be a low-risk investment. Land is one of the most stable, tax-friendly investments a person can make and there are many ways that investors can incorporate land into their portfolio.
Land is a Finite Resource
Land is scarce and demand for food is rising. Land scarcity can be caused by numerous factors, including population growth, urbanization, environmental degradation, and natural disasters. Population growth is the primary causes of land scarcity. As the population increases, the demand for land also increases, leading to a shortage of available land. As demand continues to outpace supply, land is poised to be a smart investment choice in 2024.
Land is Versatile and Offers Cash Flow
Land is one of the best kept secrets of the real estate investment world. Whether for development, commercial use, agricultural production, or simply holding as a long-term investment, land offers versatility. Owning land offers plenty of opportunities for generating income or making use of it yourself.
Technological Trends Revolutionizing Real Estate
Technological advancements, such as augmented reality and blockchain, and fractional ownership are making land investment more accessible and transparent. Emerging technologies are redefining the processes behind buying, selling, owning, and managing properties. Blockchain technology ensures transparent, secure, and streamlined real estate transactions by eliminating the need for intermediaries. This integration of technology into real estate is not only providing more convenience and accessibility but also opening up new opportunities for investors.
Sustainable, Regenerative, and Eco-Friendly Trend
Growing environmental consciousness – and a desire to do better when it comes to the impact of development on the planet – means that there may be a higher demand for eco-friendly properties. Investing in land in 2024 allows for the opportunity to be part of sustainable development initiatives and be involved in the climate change movement. Try investing in regenerative agriculture. As agriculturalists and scientists seek solutions to the growing demand for sustainable agriculture products, many look to regenerative agriculture.
Long-Term Potential for High Returns
Investing in land is an excellent way to secure long-term growth and reap high returns on investment. There is only a finite amount of available land, making it an attractive commodity for investors in our fast-growing world.
Land as an investment vehicle offers unique attributes compared to traditional asset classes. Considering the economic outlook, emerging technology, and growing demand for food and housing, land investment stands out as a prudent choice for those looking to expand their investment portfolio. Land is where investors should set their sights as the new year gets underway.
Do you have a suggestion for next month’s Pulse question? Submit your question and we might choose yours!
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