Sometimes Savvy - Ask Vinny

Dear Sometimes,

The #1 reason I recommend investing in land is because it is a finite asset. Investing in land not only diversifies an investment portfolio but can also provide a place of joy and respite. Unlike a commercial building that blocks the sun and creates revenue, land is something that can become very personal. If you think land will show you a 12% cap rate like some commercial investments, then I wouldn’t recommend the investment. However, land is typically a safe place to park money and, on average, will show a slow 3%-5% annual return. Many of our clients will park money in land for a 10–15-year hold and then move into something else, and others will fall in love with the land and never sell. What is nice about land is that it is all in the eye of the beholder; if you want a short hold and flip, great; if you want a safe place to retreat, land can be your insulator. There are many reasons people invest in land, and it all just comes down to the individual and their personal goals.

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