Created on Monday, November 02, 2020
Updated on Monday, November 02, 2020
by Land Century
Many people wonder what the safest investment options are during a recession. Today, we will explain why investing in land is one of the best decisions during recessions or financial downturn.
No matter how the economy performs, the land retains value, as it's a resource we can't provide more of when we run out. There will always be a need for land, and recessions don't last forever. Raw land investing is a smart idea as a property is a more stable source of investment. Property values always go back up after a recession ends.
We're going to discuss how land compares to the stock market in terms of investing. We'll also give you reasons why land is a more stable investment option during recessions.
Land Value vs. Stock Market
If you're looking for a safe investment during a recession or financial downturn, the best solution is to invest your money into buying land. Investing in stock markets can be incredibly risky as it's a volatile market that suffers from fluctuations daily.
Stock Market Investing
Owning stocks during a recession can be a risky venture. Stocks are liquid assets, meaning they can be bought and sold instantly. This process is great when the market is booming, and you want to maximize your earnings.
But during a recession, the stock market can become volatile. Because you can trade stocks so quickly, the price value can fluctuate immediately. What was once a highly profitable stock can suddenly lose you a fortune in a matter of hours.
A smart investor doesn't just rely on one source of income for their portfolio. It's best to have other investments that retain a more stable value on the market.
No matter what shape the economy is in, the land will always have value. As any homeowner or real estate agent will tell you, the property value will fluctuate based on how the economy is going. But it will always have value, as it's a resource that will still be needed.
The price of land can vary from year to year and even reduce in value during a recession. But when the recession is over, and everything goes back to normal, land price goes up.
The price of anything depends on demand and supply. Costs will be higher when there is an immense need or want. But when everyone stops wanting it, the price drops.
During a recession, land offers a more stable investment. Even if the market drops, it won't drop as much as a liquid asset like stocks, which change daily. So you'll still have a valuable asset, even if it's not worth what it was before the recession.
Reasons for Real Estate Investing During a Recession
There are multiple reasons why it's a smarter, more financially secure move for real estate investing during a recession. Let's take a closer look at some of these reasons so you can better understand the benefits of investing in land during a recession.
Land is Not Volatile
Property values change over time based on the economy. When the economy looks good, land values will be higher, as more people want to build. There is a demand for land, and it drives the prices up.
But when the economy is in the tank due to a recession, construction isn't on many people's priority list. Expansion stops happening. Land value can go down because a dollar's value isn't the same as when the economy was normal.
However, even though the land value may drop during a recession, the value comes back when the recession is over. Many people use recessions as the perfect time for long term investing during the recession.
During recessions, many people lose everything. Jobs disappear, money gets tight, and many people find themselves with the difficult decision of having to sell their land or homes to escape the bills they can't afford.
What this means for investors is that the market floods with new properties. Some of these can be prime locations that may not be worth much during the recession but will be worth a fortune when things go right side up.
If you know what you're doing, you can end up with some valuable pieces of land during recessions, and put yourself in a position to make a large profit when you're ready to sell or develop.
Another benefit of purchasing land during a financial downfall is that you can save a ton of money because property values are low.
You may think that it's a waste of your money to purchase it because a property is low. But during a recession, the price of everything drops, including property value.
Once the economy recovers, the property values will go back up, as more people will want to build new homes, businesses will need a place to make new stores.
So you could be sitting on a gold mine by buying a bunch of properties that have recently come up for sale during the recession. If you bind your time and be patient, you could flip the property for a tidy sum after the recession ends.
Another reason why land investing is a smart financial move is that there will always be a need for land. And the more you own, the more money you stand to make.
Land is a prime asset to invest in, as there is a limited supply, and it will always be in demand. You can't make more land once we run out of room to build.
So it's a limited source, which puts the ball in your court in terms of maximizing your profits. Recessions happen, but they always end.
And when it's over, and land value goes back up, you can sell off all the property you've purchased, making a mighty profit.
During times of recession, many people face financial problems. But recessions are the perfect time for finding land for sale, as you get a better deal, there's more available to choose from, and you know that land will be a desirable asset once things go back to normal. If you're looking for a valuable asset to invest your money during financial downturns, you can't go wrong with land investing.