Which do you think is a better asset over the next 5 years: Gold or Land

[Mr. Smith Guesser]

Maybe this isn't exactly the right forum to post this question. But I know that a lot of coin collectors are gold bugs; and maybe more specific natural resource (i.e. oil, natural gas, etc.) bugs. So I thought that I'd ask it here...

 

Let's say you won some kind of contest where the prize was 1,000 ounces of gold or the equivalent market value of land in whatever U.S. state you'd like. We're talking raw, undeveloped land and if you chose the land, you can also have it zoned anyway you'd like or even split the zoning. The only catch is that you can't sell either for 5 years.

 

Some arguments for gold:

 

1. Gold is more liquid than land, so after the 5-year mandatory hold period you could unload it for cash almost immediately

2. You don't pay property taxes on gold, and you'd have to pay 5 years minimum of property taxes on the land

 

Some arguments for land:

 

1. You can hunt, farm, or even lease on land during the 5-year hold period, whereas the gold would just be sitting in a bank vault or under your bed. So basically, the land could potentially provide cash flow while gold would not.

2. There is plenty of gold still in the ground that would be mined if it was economically feasible. You can't make more land without a massive investment like the Palm Islands in Dubai. Mark Twain put it best: "Buy land, they're not making it anymore"

 

Basically my question to you is, which do you think is a better asset over the next 5 years: gold or land?

 

[trozau]

Land - big brother will have a record of your ownership and purchase price for additional taxation when you liquidate.

 

Gold - if acquired quietly under the radar will be a hidden asset and free of taxation later when you liquidate (if also liquidated quietly under the radar).

 

Maybe just do half amounts of both.

[World Colonial]

The value of land and its future prospects is very location specific. I have my ideas of where the better places to own it are located but I don't really think it is necessarily a good financial value.

 

Land is more frequently bought with leverage and though I don't know how much by location, I presume it is artificially inflated by the credit mania. There is no doubt whatsoever that there is a global asset, credit and debt mania and its going to bust just like the prior two instances in 1999 and 2007, it's just a question of when.

 

Unless I was very knowledgeable in a local area or concurrently knew that I could use land practically, I'd still rather own gold, whether it is relatively overpriced or not.

[Mr. Smith Guesser]

The value of land and its future prospects is very location specific. I have my ideas of where the better places to own it are located but I don't really think it is necessarily a good financial value.

 

Land is more frequently bought with leverage and though I don't know how much by location, I presume it is artificially inflated by the credit mania. There is no doubt whatsoever that there is a global asset, credit and debt mania and its going to bust just like the prior two instances in 1999 and 2007, it's just a question of when.

 

Unless I was very knowledgeable in a local area or concurrently knew that I could use land practically, I'd still rather own gold, whether it is relatively overpriced or not.

 

Good points. Land is definitely location-specific. But in the scenario you can pick to own the land anywhere you want. But it would have to be the equivalent value of the 1,000 ounces of gold...so like $1.2 million at today's spot price. For $1.2 million you could buy thousands of acres in Wyoming, Montana or New Mexico. In NYC or Washington, D.C. on the other hand, you might have to shell out a million bucks much for a 0.25 acre lot.

 

Personally, I don't know which I choose without really sitting down and thinking about it. I can see upsides and downsides to both.

[brg5658]

For $1.2 million, you could buy about 150-200 acres of prime farm land. The "thousands" of acres of land in Wyoming and Montana you are referencing must be desert-land or rolling grass land. Even in the cheapest of locales, you could buy maybe 2,500 acres of non-arable pasture land.

 

I wouldn't even think about buying land in a metropolitan area. Sure, there is potential upside, but you can't predict the variables and "fashions" as much as you can for farm land. Prime farm land will always be sought after as it has actual utility and production potential. I think you may also need to take into consideration that you can earn income from farm land. I purchased 150 acres of farmland 5 years ago, on a 10 year note -- and the crop share income essentially pays for the land payment, plus there is a tax write-off for the interest and farm expenses.

 

I would always favor owning something that can actually produce. Gold bars don't produce anything. I'm sort of in the camp with Warren Buffet on that topic.

 

Just my opinions.

[cpm9ball]

I'd rather have the land.

 

Chris

[johnny9434]

Land - big brother will have a record of your ownership and purchase price for additional taxation when you liquidate.

 

Gold - if acquired quietly under the radar will be a hidden asset and free of taxation later when you liquidate (if also liquidated quietly under the radar).

 

Maybe just do half amounts of both.

ill agree with that. ill go with the land for starts. at least i can grow something on it ( for now )

[World Colonial]

Good points. Land is definitely location-specific. But in the scenario you can pick to own the land anywhere you want. But it would have to be the equivalent value of the 1,000 ounces of gold...so like $1.2 million at today's spot price. For $1.2 million you could buy thousands of acres in Wyoming, Montana or New Mexico. In NYC or Washington, D.C. on the other hand, you might have to shell out a million bucks much for a 0.25 acre lot.

 

Personally, I don't know which I choose without really sitting down and thinking about it. I can see upsides and downsides to both.

 

You mentioned raw land but I am still in the camp that prefers to own my personal residence free and clear, a modestly priced one in a decent neighborhood in a location where I actually want to live. I would choose a combination of buying a house that I actually wanted for cash and the rest in bullion stored outside of the country where i lived.

 

I don't think most developed world residents are cut-out to be farmers. I've never done it but It's a lot harder than many may realize. Presumably, many more could so if they had to and yes, you can always lease it to someone else. But agriculture is subject to its own cycle and you are still subject to getting stiffed for non-payment.

 

There isn't a clear but answer either way. Its a matter of personal preference, relative risk tolerance, As always, "it depends".

[KMAG100]

 

Basically my question to you is, which do you think is a better asset over the next 5 years: gold or land?

 

I would say your investment horizon is to short for either to make much sense. You are hoping to hit if you have to flip in five years. Both are better for long-term investments not short- term investments. IMHO

[coinman_23885]

Where is the land? How much would I pay in taxes? How much would insurance be to protect yourself should someone hurt themselves (in a non-contributory negligence state especially )? Is there a lake or river system that could be useful to you? How much land are you actually getting? Is it farmable or desert land? Are there any environmental or other hazards to cause you pain? Are there potentially endangered species or protected wet lands? Is there a chance that the population could explode and the area turn into an urban or semi-urban area with lots of business? If so and I could have it zoned as commercial real estate, I would take the land hands down. I still probably would choose the land regardless as I see more upside potential.

[coinman_23885]

i would always favor owning something that can actually produce. Gold bars don't produce anything. I'm sort of in the camp with Warren Buffet on that topic.

 

+1 and happy birthday!

[wdrob]

 

Yeah... Happy Birthday Brandon!

 

Land is better. And better land is goodest.

 

 

 

 

[WoodenJefferson]

150 acres near Williston, North Dakota (Williams County) will yield 15 oil wells ( one well every 10 acres) that should bring in roughly $1,500 per day X 365 days = $547,500 X 5 years = $2,737,500

 

Give me the land.

[brg5658]

Yeah... Happy Birthday Brandon!

 

Land is better. And better land is goodest.

 

Thanks Bill and Kenny!

[michael]

Let's say you won some kind of contest where the prize was 1,000 ounces of gold or the equivalent market value of land in whatever U.S. state you'd like. We're talking raw, undeveloped land and if you chose the land, you can also have it zoned anyway you'd like or even split the zoning.

 

with that zoning add on

 

NO BRAINER

 

the land.............................................................................

[RWB]

Land zoned for office buildings in the middle of Manhattan or San Francisco that also has a rich vein of gold running through it.

[cpm9ball]

Land zoned for office buildings in the middle of Manhattan or San Francisco that also has a rich vein of gold running through it.

 

What good would it do to have a vein of gold running through an office building?

 

Chris

[Mr. Smith Guesser]

Land zoned for office buildings in the middle of Manhattan or San Francisco that also has a rich vein of gold running through it.

There you go...best of both worlds. I know you're just kidding, but sure you could choose a plot of land with in ground gold or silver resources. There's plenty of gold and silver resources in Nevada. Lots of gold in Alaska and so forth. The problem, however, is going to be getting those minerals out of the ground. There are a crazy amount of environmental regulations which restrict mining in the U.S., which is one of the main reasons that many North American mining firms choose to develop land in Mexico or elsewhere.

 

Edited to add: Wages are another reason mining companies (and others) want to work in Mexico.

[Mr. Smith Guesser]

For $1.2 million, you could buy about 150-200 acres of prime farm land. The "thousands" of acres of land in Wyoming and Montana you are referencing must be desert-land or rolling grass land. Even in the cheapest of locales, you could buy maybe 2,500 acres of non-arable pasture land.

 

I was thinking you could get somewhere between 3,000 and 5,000 contiguous acres for $1.2 million at the maximum in WY, MT, or NM. But yeah, it would probably be desert or grass land as you mentioned.

[BillJones]

There is no hard and fast answer to this question. With land, three things matter, location, location and location. If it's in the wrong place, it can be a millstone around your neck. Also if you have some special circumstances, it can be a pain the butt.

 

I have a two-thirds interest in a piece of land that I inherited from my mother who had inherited it from her sister. I would love to sell it, but I can't because the relatives who own other third won't sell for tax reasons. In the mean time I have had to put it in an LLC because of concerns about somebody coming on the property and getting injured. It costs me money every year to keep it. So that piece of real estate is currently less than worthless to me.

 

I know, I know, you can go to court and try to force a sale, but it's a hassle. A coin or piece of bullion, on the other hand can sit in the safe deposit box, even if you don't like it. As the saying goes, "It doesn't eat," so there is only the opportunity costs of what you could do with the money if you sell it.

 

[cpm9ball]

For $1.2 million, you could buy about 150-200 acres of prime farm land. The "thousands" of acres of land in Wyoming and Montana you are referencing must be desert-land or rolling grass land. Even in the cheapest of locales, you could buy maybe 2,500 acres of non-arable pasture land.

 

I was thinking you could get somewhere between 3,000 and 5,000 contiguous acres for $1.2 million at the maximum in WY, MT, or NM. But yeah, it would probably be desert or grass land as you mentioned.

 

You could always ask Parker Schnabel what would be a good location.

 

Chris

[Brol]

for 1.2M I would buy 3-4 houses in my area and rent them. Buy gold $20's with the rent income.

[cpm9ball]

for 1.2M I would buy 3-4 houses in my area and rent them. Buy gold $20's with the rent income.

 

Umm.......the OP stipulated raw, undeveloped land.

 

Chris

[jom]

I would always favor owning something that can actually produce. Gold bars don't produce anything. I'm sort of in the camp with Warren Buffet on that topic.

 

Just my opinions.

 

Absolutely....there is really no contest. The OP said you can have land anywhere in the US so the "location, location" argument against land is moot as I can select the land anywhere I want. So presumably I'd know where to select the proper tract. Also, the OP said that you get the land but that does NOT mean you can't develop the land and produce from it. Buffet has the right idea.

 

Again, it's no contest.

 

jom

[mtnstyne]

For $1.2 million, you could buy about 150-200 acres of prime farm land. The "thousands" of acres of land in Wyoming and Montana you are referencing must be desert-land or rolling grass land. Even in the cheapest of locales, you could buy maybe 2,500 acres of non-arable pasture land.

 

I was thinking you could get somewhere between 3,000 and 5,000 contiguous acres for $1.2 million at the maximum in WY, MT, or NM. But yeah, it would probably be desert or grass land as you mentioned.

 

Scratch MT off the list, anything on the West side of the state goes for crazy prices ($20k/acre) and the East has oil under it. You can get some grassland in the middle but not for $400/acre.

[cpm9ball]

For $1.2 million, you could buy about 150-200 acres of prime farm land. The "thousands" of acres of land in Wyoming and Montana you are referencing must be desert-land or rolling grass land. Even in the cheapest of locales, you could buy maybe 2,500 acres of non-arable pasture land.

 

I was thinking you could get somewhere between 3,000 and 5,000 contiguous acres for $1.2 million at the maximum in WY, MT, or NM. But yeah, it would probably be desert or grass land as you mentioned.

 

Scratch MT off the list, anything on the West side of the state goes for crazy prices ($20k/acre) and the East has oil under it. You can get some grassland in the middle but not for $400/acre.

 

Personally, I wouldn't want any tract of land close to Yellowstone. It's been about 640,000 years since the last super eruption, and I wouldn't want to be around waiting for the next one.

 

Chris

[tommy44]

"Personally, I wouldn't want any tract of land close to Yellowstone. It's been about 640,000 years since the last super eruption, and I wouldn't want to be around waiting for the next one"

 

To be safe from the next super eruption at Yellowstone you would probably have to be on Mars.

 

[Matt_dac]

Gold for me please.

 

Easier to liquidate and buy whatever I want (including land that better suits my needs than a single 1.2M plot that I would be paying crazy taxes on whether I could use it or not).

 

 

 

 

[cpm9ball]

"Personally, I wouldn't want any tract of land close to Yellowstone. It's been about 640,000 years since the last super eruption, and I wouldn't want to be around waiting for the next one"

 

To be safe from the next super eruption at Yellowstone you would probably have to be on Mars.

 

I can't find any real estate agents on Mars.

 

Chris

[World Colonial]

"Personally, I wouldn't want any tract of land close to Yellowstone. It's been about 640,000 years since the last super eruption, and I wouldn't want to be around waiting for the next one"

 

To be safe from the next super eruption at Yellowstone you would probably have to be on Mars.

 

I can't find any real estate agents on Mars.

 

Chris

 

Give them time. Remember, no one is making any more land there either.