In the State of Hawaii, the Island of Hawaii, commonly called the "Big Island" because it is bigger than all of the other islands combined, land is being added all the time. As the volcano spews lava and rocks, the island expands. It takes many years for the newly formed land to be useful for planting. The combined lava and rocks have to be weathered to form the rich topsoil suitable for planting crops. Elsewhere in the contiguous United States, there is a finite amount of land, which makes land by all means a valuable commodity.
One can predict the future profitability of a real estate purchase within a span of a few years. The fact remains that the land value will always tend to go up, barring cataclysmic global events.
I remember my grandfather giving away a small piece of land to one of his tenants. It was not much, about 100 acres. It was located too far away from where he lived at the time and he did not want to travel that much anymore after World War II. What he did not think of at the time was that it was bordering a huge lake, which, 50 years later became a tourist attraction in the region. The land became a most desired location and the heirs of his former tenant were richly rewarded. I always thought that whoever created the wealth has the authority to dispense it, but I do sometimes wish that I could visit those spas built in that land without having to pay. Just a wish, not a nagging yearning.
No one can predict with absolute certainty where the greatest gain in the value of real estate will be. In these tumultuous times in the financial markets, it is understandable to be a little scared. The newspaper heralds the double digit declines in housing values, but keep in mind that each market is unique, each town is unique. Everything goes in cycles like the seasons. If you are a long term investor you ride the waves, just like a surfer.
The next question then is must one buy a developed real estate or an undeveloped land? The choice is always up to you and is dictated by your financial situation. There is only one caution you need to be aware of and it is never to fall in love with your purchases. You must be ready to let it go when it is time. Always keep in mind that we borrow it and then enjoy it for some time and then let it go for someone else to use and enjoy.
The people will come and go, the buildings will get run down and replaced. Nothing is permanent. Only the land remains.
Who is Ted Turner? Answer (A) The ex-husband of Jane Fonda (B) Founder of CNN (C) Donor of US $1B to the UN (D) Owner of the largest acreage in the US.
Answer? Take a guess.
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