Credit Crunch and Land

 Stock Market and Land

In the credit crunch and economic crisis it makes even more sense to have quality land as part of you portfolio for these reasons:

1. Its a hedge against inflation. The currency can be inflated by the politicians, but they can’t print anymore land.

2. It is a hedge against deflation. Deflation causes financial instituiton failures and that doesn’t effect your land.

3. It is not dependent on someone elses promise. Bank instruments, money market funds, stocks bonds are dependant on some company to fulfill its obligations. Land is yours, plain and simple.

4. All these bailouts will lead to higher taxes. Doesn’t effect land in the short term since you can just hold it and not sell.

5. Currencies can go up and down. Your land will stay.

6. No matter what happens, you have a nice piece of land that is yours. 

by Andreas Paramonoff

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5 Responses to “Credit Crunch and Land”

  1. John Says:

    What about liquidity? Land might be a good investment in turbulent times, but it might be hard to sell in a hurry.

  2. Andreas Paramonoff Says:

    Yes, land can take longer to sell than other investments and I wouldn’t recommend land as a short term investment.

    But many sellers can sell their land faster if they are willing to provide their own financing.

  3. harish Says:

    Does the slow down in construction affect the value of rural land ? I was of the impression that the rural land values are mostly based on speculation of future construction.

  4. Andreas Paramonoff Says:

    Although land values may have dropped a little, they have not dropped nearly as much as developed real estate.

    This is because rural land is not as dependent on bank loans as other real estate and land is not only purchased for development but also for recreational purposes and for holding for living in in the future. Land is also being held because it makes an excellent inflation hedge and inflation is definitely a concern givent he endless bailouts.

  5. Sam Pitroda Says:

    You have put a pciture of beautiful land near a lake, which I think is misleading. Most of the land you are looking at I believe are unihabitabe lands in deserts or other worthless place. How can you say that those types of land are hedge against inflation. Prices for those land won’t go up even to cover the inflation, it might even go down

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