Guys, given our current economic situation what would be the best time to buy land?
I would be paying 100% up front.
Is there any way to avoid taxes?
I personally think that prices on all real estate (even land) will come down considerably if the lending standards get contracted and the credit market settles. But then again, the Fed is lowering rates to ridiculous low levels again so the bubble could continue...
100% payment with no debt is a perfect way to go. You can't avoid the property taxes, though. And they're going up everywhere.
I'd wait for the crash to bottom out. I think the RE will lose about 90% of its value in terms of gold.Originally Posted by Allen72289
For example, I have a friend who did not take my advice and bought a house in 2004 for $300,000. Today in the neighborhood a house hasn't sold for over a year. He would be lucky to firesale the house for $250,000. In 2004 the house cost about 700 ounces of gold. Today the house costs about 275 ounces of gold. In my opinion, the crash will bottom when the house costs 70 ounces of gold.
You could always buy the land with a mortgage and put the rest of the money into physical gold. Then sell the gold monthly to pay the mortgage down.
The place to be right now is cash, denominated in gold.
In a few years time.
wait at least a few years (like, at least 3). we're in the midst of the biggest housing crash in our nation's history, which will effect land prices for a while.
"Aggressive wars, income taxes, national IDs, domestic spying, torture regimes, secret prisons, Federal Reserve manipulation -- we don't have to take it any more." -- Ron Paul, Sept 27, 2007
The property taxes suck. Just for the 5 acres I bought aross the street from me, the property taxes are $398/yr per acre. And we don't use the land for anything at all, other than just to look at it and pick mushrooms in the woods in the fall. Sucks.
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I'm debating this issue myself. You have 2 opposing factors (at least): 1) the continued slowdown in the real estate market and turmoil in the credit markets, which could certainly worsen if the general economy weakens, and 2) as the dollar drops due to fed rate cuts and the aforementioned economic weakness foreigners will have a GREAT deal if they want to invest in real estate here, especially in areas where prices were never really overextended (Texas, the Carolinas, etc.).
The Fed seems determined to avoid a general economic recession so I think inflation is the risk of the day as they will pump liquidity until they have clearly avoided a recession (at which point all prices increase like crazy IMO.....land less so than gold, but still increasing I believe). However, you can lead a horse to water, but you can't make it drink....so lowering rates won't immediately (or necessarily) lead to more confidence in credit risks or return stability to the CDO/CMO markets, and potential homebuyers who are getting laid-off in an economic slowdown or are just having trouble paying for gas aren't going to be eager to jump back into the ARMs that everyone has been dissing for the last year or so (hopefully).
So there are a lot of factors influencing the whole thing. I'm about to buy a house, but only cause I'm in Houston where RE is still cheap, and because I can take advantage of my relatively good credit, and because I need a place to hide my safe that will be packed full of gold, silver, and guns. If I could afford some land out in the Texas countryside I would CERTAINLY buy that as well right now because I don't think it will get much cheaper in the long run. Short-term is questionable, but the long-term collapse of the dollar means land is worth more in dollar terms.
I would stay away from buying land in the overheated markets (FL, CA, NV, etc.) until there's 'blood in the streets', if you will. Those markets have a ways to go before they become cheap enough so that foreign investors start to enter the markets en masse, or until the local fundamentals match up with the cost of housing.
So to answer your question it depends on where you want to buy, what your purpose is, and what your timeframe is. The next speculative real estate bubble is being created right now, assuming the dollar doesn't collapse in the meantime leading to more general economic turmoil. In either of those scenarios I'd rather own land I live on, than renting the entire time (or holding USDs).......deciding exactly when to make that purchase will be more art than science.
Well, what's your expected rate of return on the land? What's the price? Buying land simply because it's land is not a good idea -- even off-the-grid survivalists know that they need to be smart investors.
$2000 a year for 5 acres? Are you serious? In Berkeley, CA the property taxes are approx. $17,000 a year for a house valued at $800,000 on only 1/8th of an acre.
Allen
When the cycle turns from bull to bear or the opposite the trend usually lasts 5 to 7 years. Believe me you have LOTS of time. Don't try to catch a falling knife, there is lots of pain coming yet and the end is nowhere in sight. I've been through these things before but this time its different, this is by far the worst credit crunch and destruction of confidence I have ever seen.
My advice is take your money saved for land and buy gold and silver RIGHT NOW and when it doubles or triples then look at real estate then but once a bear market starts and a bubble bursts it will take a long long time to reverse.
If you remember nothing eles remember this.......A bull market is born in total despair and a bear market is born in total euphoria (like we just witnessed for the past 6 or 7 years in residential housing) Get it? In other words, when people you talk to act disgusted at you whe you bring up the word real estate, thats your signal. We aren't there yet.
Meanwhile you can get your daily housing bubble information HERE
For General Information on Gold
LIST OF ALMOST ALL COIN AND BULLION DEALERS EN LOS ESTADOS UNIDOS
THE NUMBER ONE SITE FOR EVERYTHING GOLD, SILVER, BASE METALS YOU NAME IT IT'S HERE
JIM SINCLAIRS SITE...DAILY COMMENTARY ON GOLD.....EVERYONE READS THIS SITE
Thanks guys.
=D
Property taxes are the same as rent. Keep it as low as possible. That usually means buying land very far away from urban areas.
Calculate all prospects in terms of taxes/acre. That way you can compare the tax rates between different acreages in different areas. One of the biggest things which affect property tax rates is schools. Local school boards have a large say in how much money is dedicated to local education. Some are much more wasteful of public funds than others. If a new school building is being planned expect property taxes to increase substantially. If there is a high birth rate or a lot of new people moving in there will likely be a spike in property tax rates in the near future. Older populations of more conservative minded people will be more careful about property tax increases.
Avoid lake property or property which is near any areas of future development.
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Matthew Chapters 23 + 24
Wow. My uncle has lived 8 miles outside of pierce idaho.
His situation relates to this.
Now people are coming in and buying all kinds of land and his property tax has doubled. :/
It aint time yet!
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