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“Buy land, they are not making it anymore”

It is hard disagree with the above quote. Ownership of strategically located land has always been, and always will be, a sound investment. It has stood the test of time and will continue to preserve and generate wealth for generations to come. So why don’t more investors take advantage of the current opportunities in the USA land sector? It is certainly a great time to invest there and there are some sound opportunities available.

Most investors in places like Hong Kong, Singapore and Malaysia focus on the UK market and have little knowledge of the USA. London apartments have long been an investment favourite for investors in these countries. The London market has performed extremely well over many years and is a superb place to invest. However, many investors cannot access the market there as prices have soared in recent years. Land in the USA is a much more affordable investment with investment levels starting from US$10,000. Some people will be concerned that this will only buy something in the middle of a swamp or so far from civilisation that-one will want to live there in our life times. However, this is not the case, it is merely a reflection of the current state of the USA market.

Residential land in established communities in Florida can now be bought from under US$15,000. Prior to the GFC in 2008, many of the plots were selling at close to US$100,000. There has certainly been a lot of pain in this market for investors over the last five years. The fact remains though, that Florida is one of the growth states in the USA and the population is set to steadily increase over the medium to long term. Builders are gradually coming back into the market and housing starts are showing signs of improvement. Permits for future U.S. home construction rose to their highest level in 5 years in October, suggesting the housing market recovery remained intact. Single-family homes are by far the largest segment of the market. The Commerce Department advised that building permits jumped 6.2 percent to a seasonally adjusted annual rate of 1.03 million units. That was the highest rate since June 2008.

The demand for land is not going to surge over night and prices will not double in 2014. Nevertheless, the signs are there that the worst is over and Americans have started building homes again. They will need land with approvals in place for this. When you can buy a building plot for under US$15,000, the downside is negligible. It really is worth a punt on the recovery of the USA single family home market – the returns may be excellent over the next five years.

As an alternative to buying land already zoned residential, investors can buy pre-developed land through Walton. Some investors will worry that the company will fail to secure planning approval, but it has never failed to do so and with 56 exited projects it has a sound track-record. Rather than simply wait for the land to increase in value, Walton adds value to it by securing all the necessary approvals to allow a developer/builder to start construction. Investors do not have the flexibility of being able to sell when they want to, as they do with individual ownership of a building plot, but for investors who want a ‘hands off’ profitable 4-6 year investment, it is ideal.