Buying Large Tracts of Land as an Investment

Buying Large Tracts of Land as an Investment

In the USA or Western Europe, one can buy a large tract of land (if it can be found) with reasonable security. It is expensive if it is in the “path of progress”. If it is not in the “path of progress”, it may be cheaper. Possibly it can be used to grow timber or leased to a farmer. The yield will be low and the holding time may be long. When development time comes there may be significant resistance from neighbors and people who are using or would like to use neighboring properties.

The good news is that so long as the taxes are paid ownership is pretty secure. Eminent domain could be exercised; but compensation is usually fair. Even if the property is “downzoned” compensation must be paid. Tax benefits can be obtained by placing property in a “preservation trust” of some type. This limits future uses.

In parts of Asia, South America and Africa. Huge tracts of land can be bought relatively cheaply. Ownership may not be as secure as in other parts of the world. In South America, “Campesinos sin Tierra” and the “Mayennes” make a practice of moving onto unused or unguarded land and claiming squatter’s rights. The governments there lack the political will to evict them. In many African countries. The black governments are seizing white owned land for redistribution to blacks. This seem fair enough, since the white owners seized the land from the blacks in the 1st place. This is not a practice that encourages investment however. Usually redistribution means giving the land to the ruler’s relatives, friends and supporters.

In many countries there are also problems with getting good title. Title insurance is not always available. In some countries it can be obtained at a fairly high cost. The high cost is still cheap compared to buying a property and not owning it. The next blog will identify some countries where land is still reasonable and will discuss how to own the property securely.


David Segrest is a REALTOR with Segrest International REALTORS. His webpage is http://www.segrestrealty.com