There are various reasons why people buy raw land. Many people focus on the outdoor attractions, like the mountain views, the weekend camping trips, and the great hiking, fishing and hunting. Others are focused on securing property for a future vacation home or homestead to live on. There are also those who purchase land purely as a long-term investment. Regardless of your motivation, it is important to understand the financial outlook of your investment over the long term, and how it compares to other things that you may do with your hard earned money. So, let’s dive right in!
Steady Growth You Can Count On
You might have seen headlines about real estate prices going wild over the last few years. While some cities saw “bubbly” spikes that are starting to cool off, rural land in the West has followed a much more sensible, steady path. According to a recent Realtor.com article, since 2019, raw land in the Western U.S. has grown at an annualized rate of roughly 4.5% per year. For those of us that have been in the business for more than a few years, we can clearly see the increase in our acquisition prices compared to just a few years ago. A large part of this growth was seen in the COVID years, as people turned towards outdoor activities, remote working and general desires to get out of the city rat-race, with more of a flat trend in the last few years. This modest annualized growth rate is actually great news for us, because it’s sustainable. A 4.5% yearly increase is a healthy, “boring” rate that outpaces inflation without the scary spikes that lead to a crash. The market has moved past the “frenzy” of a few years ago and settled into a steady rhythm, meaning you can make a calm, rational decision without feeling rushed.
The Power of Forced Savings
One of the most powerful reasons real estate builds wealth isn’t just price growth—it’s the way it changes how you save. Numerous studies support the idea that a mortgage or land financing with a fixed monthly payment acts as a “forced savings account.” According to these studies, researchers find a nearly one-for-one rise in a person’s net worth for every dollar of debt they paid down. Essentially, as humans, it’s hard for us to put $300 a month into a savings account, but we will always make the best effort to pay our property bill. Over time, those payments build up as “equity” in the land, creating a substantial nest egg that you can eventually sell or pass down to your children. It’s one of the most effective ways for the average family to build long-term wealth because the “savings” happens automatically every month.
A Finite Asset in a Growing World
Another reason land in the West feels so secure is simple math: they aren’t making any more of it. As more people look for ways to escape crowded cities, the demand for “space” continues to climb. According to recent market data, land inventory is still 24% lower than it was before 2019. This low supply acts as a safety net for your money. When there is less of something available, it has the potential to hold its value much better than “paper” investments like stocks, which can fluctuate wildly based on the news of the day.
The Once in a Blue Moon Bonuses
Every once in a while, you’ll hear stories about a landowner getting a “windfall”—maybe a cell tower company offers a monthly lease to put a tower on a ridge, or a small solar project needs a few acres for a local grid. While these things can happen and can significantly boost a property’s value, they are “once in a blue moon” events. You shouldn’t buy a piece of land expecting a solar company to knock on your door next Tuesday. However, the fact that land can host these types of things is just another reason why it’s a more versatile asset than a suburban condo.
Other Key Benefits to Owning Land as an Investment:
- The Vacation Benefit: think of land like a savings account you can actually visit. If you put $10,000 into a traditional bank account, it sits there as a number on a screen. If you put that same money into a 5-acre parcel, it grows in value over time while you get to use it. You can camp, park your RV, or just sit by a fire. Most of us find that the “memories made” on the land are worth just as much as the financial growth.
- Real Estate with no Headaches: Many people want to invest in real estate, but they don’t want the headaches of being a landlord. There are no roofs to fix, no toilets to plunge, and no “emergency” calls from tenants at 2:00 AM. You own a piece of the earth, and it stays there, waiting for you whenever you’re ready to visit.
- Minimal Annual Holding Cost: Raw land has virtually no holding costs. In many rural Western counties, your property taxes can be as low as $5 to $20 a month, with no HOA’s, utility bills or anything else.
Raw land isn’t a “get rich quick” scheme. It’s a tangible, low-stress way to grow your money while owning a place to escape to on the weekends. The market has settled into a healthy, predictable pace. If you’ve been waiting for the “right time” to buy, the current stability of the West makes it a great time to stop dreaming and start owning.