Boyd -

Buying vacant land at the bottom of the real estate cycle, riding the upcycle higher until it ends, and then selling at the peak ... offers you more upside leverage than any other type of real estate investment.

Most people don't realize that it is the land that is appreciating most, not the bricks, lumber, and nails that sit on top of the land.

The cost of the improvements (labor and materials) appreciate at about the same rate as inflation. It's the value of the underlying land that is most affected by the swings in the cycles.

Of course, as compared to houses, investing in vacant land does have it's disadvantages ... no income, harder to finance, property taxes, etc. That's why market timing can be critically important: the downside can eat you alive.

Robert Campbell


Timing the Real Estate Market