Retirement is a relieving milestone for many Americans in the workforce, but it can also raise some concerns. Have I built a big-enough nest egg? Should I move to a more affordable city?
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It's hard to know if what you have saved will really be enough. As a business owner, Jay Fuson said his investment property is his plan for accruing a passive income during retirement. Fuson owns Guardian Relocation, a regional moving company centered in the Midwest, but when he retires, he plans on retaining the land and commercial buildings in Ohio and Indiana.
"I love my businesses and they have worth, but they're only worth something to someone who wants to be in that business," Fuson said. "Real estate has worth to anybody that would want to buy that building or property."
Buying land is an investment option for soon-to-be retirees, in hopes that a developer or real estate agency will buy it in the future for a profit. You could even plan to build your own home on the property later on. But as always, investments are not guarantees, and a good real estate investment hinges on location at the time of sale. If you're looking for an investment to save during retirement, look at these top U.S. states where you can buy cheap land for a potential profit.
New Mexico
With its diverse landscape, the largest National Forest in the nation, and one of the biggest hot air balloon festivals in the world, New Mexico is a destination for nature lovers and tourists alike. You can explore backcountry hiking through sand or snow, and a surprising number of wineries throughout the state. And with the average price per acre at $4,029, it's not a bad place to start looking for investment property. The average land sale amount in the state sits at $55,918.
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Tennessee
The state capital of Nashville is home to an abundant music scene, with historical sites like the Grand Ole Opry and Elvis Presley's Graceland estate and museum. But beyond the city, the price of land might be music to your ears. The average cost for an acre of land in Tennessee is $14,400, but acres in more remote counties go for a considerably lower rate. Knoxville, TN made the National Association of Realtors list of Housing Market Hidden Gems for 2022, and with no income tax throughout the state, an investment here could accrue value later on.
Fuson says when taking on a larger investment, it could be more beneficial to consider purchasing commercial real estate rather than just residential.
"Commercial land has more value than residential land will ever have - residential value will go up or down based on interest rates, neighborhood, what have you," Fuson said. "From a commercial land perspective, it has worth - based on its location - for any commercial entity."
Texas
They say everything's bigger in Texas, and that remains true for the selection of land available for sale. Texas has the most land listed for sale in the country, and the average plot is about four acres larger than the national average, meaning your dollars could stretch a little farther. With wide open spaces and eight of the nation's fastest-growing cities, land in the Lone Star State could be a worthy investment down the road. The price per acre of rural land in Texas was $4,286 in Q2 of 2022, but prices will vary in more metropolitan areas.
North Dakota
Known primarily for its sweeping farmland and ranches, North Dakota has some of the cheapest land to offer in the U.S. The state average price per acre of pastureland rose to $1,080 in 2022, and the average cash rent per acre sits around $21. If you retained ownership of 5 acres of land that an agricultural company developed, you would ideally see a return on that investment in just over four years.
If you are purchasing more rural land to develop later on, it's important to understand the zoning and tax requirements on that land before purchase, and to ensure the property has access to water and utilities.
Kansas
Aptly named the Sunflower State, Kansas is home to rolling fields, farms, and its signature barbecue. The golden wheat capital of the world could rake in some green for your retirement plan. According to a report from the USDA, the average acre of Kansas farm real estate is currently valued at $2,630 per acre, which is a 25 percent increase from the previous year. If this trend continues, land purchased in Kansas could be increasingly valuable as the years go by. The state also has the second lowest cost of living in the U.S., with housing costs sitting 27.4 percent below national average.
West Virginia
West Virginia, the Mountain State and setting for a popular John Denver song, is the only state completely nestled in the Appalachian Mountain range. Natural beauty from sites like the Shenandoah River and numerous historical sites like Harpers Ferry and The Greenbrier Resort draw visitors from all over the nation. And with the low cost of land and one of the lowest property tax rates in the U.S., West Virginia could be a good location for your investment property. Vacant land in West Virginia will cost you about $14,448 per acre, which comes out to $0.33 cents per square foot. West Virginian land can also be bought with separate surface and mineral rights, which makes rural land more affordable if you don't plan to drill or mine there. Some of the fastest-growing counties in West Virginia are Jefferson and Berkeley, which are prime locations close to the nation's capital in Washington, D.C.
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This article originally appeared on GOBankingRates.com: Top 6 States for Retirees To Buy Cheap Property
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