Saturday, May 5, 2007

Newbie Investor's Land Speculation Goals

Let me buy a $15,000 single family lot in the desert above Los Angeles. The goal is that the lot will sell for $30,000 in a few years. Small $5,000 downpayment (feel free to extrapolate for ye with bigger budgets) and small monthly negative. Is this a good investment? Will the effort be worth the possible $15,000 gain less the cost of ownership? That same small downpayment will cover the closing costs on a zero down condo for our investor to live in. Then she benefits from tax sheltering and better financing. In this case, go for the condo.

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