There’s an old saying in real estate: “Buy land—they’re not making any more of it.”
It might sound like a cliché, but the more I study today’s market, the more true it becomes.
At an event I attended last week, an investment banker turned developer shared an insight that stuck with me: as land costs rise, it’s becoming nearly impossible to build affordable housing. The numbers just don’t work for builders at lower price points. That means the homes we see today—single-family houses on acreage, tucked away with room to breathe—are quickly becoming rarer.
We picked up on this trend very early in 2012 while living in Arizona. We wanted to start building homes…But not just any home…We wanted to build homes that WE would like to live in which means we wanted to build homes with massive 4 car garages, nice back patios, and MOST importantly LAND…Minimum 1 acre lots…See in Arizona, every builder was a track home builder looking to optimize profit which means the smaller the lot, the more money.
We took the opposite approach. We were not competing with those builders…We instead built homes on land that we knew people would pay a premium for. And it worked.
Funny enough, we were paying either 100k or less for an acre from 2012-2019…And then covid happened and the value of those lots 5x over the last 5 years in some areas! Why? Because it’s a scarce asset that they no longer make!
Land ownership is THE most powerful wealth-building strategies. It’s tangible. It’s finite. And as demand grows, so does its value. The trick is can you hold out long enough like some of those farmers did in Arizona that ended up selling for 500k per acre when they bought those large tracts for $500 per acre 25 years ago.
The Real Value Is in the Dirt
When people look at real estate, they often obsess over the house itself—the finishes, the layout, the upgrades. But here’s the truth: buildings wear out, land doesn’t.
A cost segregation study actually reinforces this. When accountants break down a property for depreciation, the structure (roof, HVAC, flooring, appliances) is what gets written down and depreciated. Why? Because it all loses value over time. But notice one thing: the land itself is never depreciated.
That’s because the IRS (and centuries of market behavior) recognizes what most people forget: the house may age, but the dirt it sits on only becomes more valuable. Appreciation in real estate is tied less to the drywall and shingles and far more to the location—the soil, the lot, the street, the neighborhood, the city growth pattern.
This is why the old saying still rings true: location, location, location. A 40-year-old home on the right half-acre will often outpace a brand-new home built in the wrong spot. Land is the irreplaceable ingredient.
So if you’re evaluating property, stop making the mistake of fixating on countertops and cabinet colors. Stop, take a look at the yard. That’s where the appreciation lives.
Sorry wives…This might just be the one argument I will win with my interior designer wife:)
Speaking of new builds on LAND in a great location…
We just finished a brand new build that highlights the very principle this developer was talking about—quality housing on valuable land.
-> View the New Build Here
If you’ve been waiting for “the right time” to invest, remember this: the best time to own land was yesterday. The next best time is today.
A few days before he turned 80
He was sittin’ out back in a rocker
He said, “What you been up to lately?”
I told him, “Chasing a dollar”
And in between sips of coffee
He poured this wisdom out
Said, “If you want my two cents
On making a dollar count
Buy dirt
Speaking of new builds on LAND in a great location…
With over 15 years of experience in real estate investing and property management, I’ve seen firsthand the incredible opportunities this industry offers. I’d love to share my story with you and explore how we can make real estate investing a successful part of your journey.
