Daily Real Estate News  |  August 29, 2008  |   Consider Stocking Up on Land
More small buyers are investing in undeveloped land.

"There is a really attractive market emerging for the small investor," says Eric O'Keefe, editor-in-chief of Land Report magazine. "With credit tightening, what you're seeing in essence is some of the air being let out of the bubble that was driving prices up."

Buying land is no slam-dunk. An investor must be able to judge which land is most apt to deliver a profit down the road and be able to hold onto the property long enough to benefit.

Also, variations in prices make these kinds of investments painful for the faint of heart. For instance, the Texas real estate commission reported that land prices went up by 20 percent in 2007. But land values in Southern California have tumbled at least 50 percent along the coast and as high as 90 percent. inland, investors say.

Plus, ownership can be expensive. Besides high borrowing costs, there are property taxes and liability insurance costs to pay.

Nevertheless, some investors are convinced now is the time. "It's a delicate business, but it's just about bad enough to be good again," says William Shopoff, chief executive of Shopoff Group, a real estate investment firm in Irvine, Calif.

Source: Investor’s Business Daily, Brad Kelly (08/29/2008)