Why Rich People Are Buying Raw Land (And Why You Should Consider It)
More people are buying raw land in the
United States than ever before.
While the wealthy are snapping up a significant portion
of property, average individuals are also increasingly turning
to land to diversify their financial portfolios,
often due to concerns about the stability
of other assets in the coming years.
Why the Wealthy are Investing in Land
Prominent figures like Bill Gates, Jeff Bezos,
and Ted Turner own millions of acres combined.
This is driven by several fundamental economic realities.
First, land is a finite resource; they are simply not making any more of it.
As the population grows, the demand for resources like food
and housing increases, positioning land as
a valuable long-term asset similar to gold or silver.
Land occupies a unique financial class,
operating independently of the stock market.
While stocks, bonds, and mutual funds fluctuate,
land tends to remain relatively stable.
In an environment where traditional assets like treasury bonds
may struggle to keep pace with high inflation,
fund managers are increasingly
advising investors to diversify into real, tangible property.
Innovative Ways to Make Money From Land
Purchasing raw land does not inherently provide “mailbox money”
or passive income in the traditional sense,
as it is a piece of earth rather than a business.
However, there are many ways to make it profitable:
- Traditional Uses: Agriculture, ranching, timber harvesting, mining, and grazing remain viable ways to generate revenue.
- Modern Rental Models: Some owners utilize “Land BNB” models, where they rent out small tracts of land—sometimes as little as five acres—to campers and backpackers looking for a private getaway.
- Energy Production: Developing wind or solar farms on your property can create opportunities to generate and sell electricity.
The Role of Water as a Resource
Water is arguably the most important resource tied to land.
Many people are unaware of the vast water tables
existing beneath the earth.
Because bottled water is incredibly expensive relative
to its source—often costing significantly more per gallon
than gasoline—investing in land with access to water
can be a strategic move.
Developing a well to tap into this resource
can provide long-term utility and value.
How Wealthy Investors Use Their Land
The massive landholdings of figures like Bill Gates
and Jeff Bezos are often put to work immediately.
Bill Gates focuses on farmland, producing crops like potatoes
that are sold to major food corporations.
Jeff Bezos has utilized a significant portion of his
Texas property to test aerospace technology.
It is important to note that these high-net-worth individuals
are not necessarily hands-on farmers.
A significant portion of agricultural land in the United States
is farmed by professionals who lease the land from the owners.
This allows investors to hold the appreciating asset
while others manage the operational side of the property.
Understanding the Cost and Value of Land
When considering an investment, it is helpful to understand
the basic metrics of land value.
An acre of land consists of 43,560 square feet,
which is slightly smaller than a standard football field.
The cost of an acre can vary wildly based on location,
as real estate is hyper-local.
However, there is generally an economy of scale involved.
While smaller tracts of land might be priced higher per acre,
purchasing massive acreage in the hundreds
or thousands often significantly lowers the cost per acre.
Financial and Tax Considerations
There are distinct tax benefits associated with land ownership.
For example, interest paid to a bank or mortgage company
for a loan used to purchase investment land can often
be deducted as an investment interest expense.
Regardless of how you choose to use the land—whether you farm it,
rent it out, or hold it—the most consistent way to view land
value is through the lens of long-term appreciation.
As more people seek to acquire property, demand increases,
which drives value upward.
Holding land while the market continues to expand is a strategy
many use to protect and grow their wealth.
