North Carolina Land Expert Eric Andrews talks about land as an investment, especially land in Pittsboro and Chatham County North Carolina.
Speaker 1: Is land a good investment?
Speaker 2: Most people say, no, land’s not a good investment because it doesn’t, pay dividends. It usually don’t rent it. It has no rental income. If it does, if land does have rental income, really the best you’re probably going to get is what you’re paying in taxes. That’s the other thing. That’s the negative. Not only is it not paying income, but you have to pay property tax on it. And, and then the other thing that people always talk about is the opportunity cost of capital. So you have $100,000, you just bought a piece of land for $100,000. That’s not doing anything, but now you can’t do anything with that $100,000. So, there’s some people that say, land’s not a good investment. And if we look at the chart overall, all the land in the United States pretty much follows inflationary index.
I mean, it’s not a huge spike. It is a limited supply. They’re not making any more of it. That’s what that’s when everyone always says. And as the population grows, the value of the land goes up. Our land in the United States is not only used to live on, but it’s also used to grow our food or to get us minerals or fossil fuels. So that land is being used for other things. But 10 years ago, if you bought 20 acres on 7-51, we’re probably talking about 15,000 an acre. And I actually had people say to me, is that a good investment? I’m like, wow. It’s not like it’s going to double in price. I thought 15,000 an acre was pretty maxed out.
I underestimated the physical barrier of the lake and how much people would want to be on the east side of the lake. So really that 7-51 area appreciated much, much, much quicker than I thought it would. A 20 acre piece now could go for $800,000, even a $1,000,000 right now. So that’d be a pretty good investment.
Speaker 1: Yeah.
Speaker 2: 300 turned into a 1,000,000 in 10 years. So it certainly paid for its taxes. The thing that people need to know about land is it’s highly speculative. You have to know where you’re buying and road frontage is important. Corners are important. And if you have that crystal ball, you want to know where do people want to live 10 years from now, and land can be a great investment. If you figure that out.