TorontoRealtyBlog

You know, watching this video does not do justice to the beauty that exists down here in Idaho.

I go through this every single year at this time; I talk about going to Idaho, and people make potato jokes, or ask me what the hell I’m going down there for.  Then there’s the people who ask, “Are you driving?” which clearly shows they have no idea where Idaho actually is.

Well, their loss.

We’re right on the Idaho/Wyoming border, and thus we get the best of both worlds.  My nieces call this place “Wydaho,” and for good reason.

As I said in the video, my father scouted out this humble ski town back in the early 1990’s, and eventually purchased land here in 1998 with the thought of one day building a home.  When the real estate market crashed in the United States in 2008, it was cheaper to buy a house, and the land it was on, than it would have been to actually build a house on the land our family owned.

So for the last ten years, we’ve enjoyed this home in both the winter and summer (as I mentioned in the video, I don’t ski anymore – I’m a summer guy!), and yet the land continues to sit.

But isn’t that what land does?

As investments go, it’s about as boring an Investment as you can hold.

But does that matter?

You can “invest” in a painting, and derive pleasure from it.  You own it, you display it, you show it off, and you look at it, every day.

And then some investments can be a pain in the ass, like, say, a multi-unit dwelling.  Fix the leaky sink, listen to the tenant complain, deal with the bounced rent cheque, etc.

So what is the purpose of an investment?

Is it all about the return?

Or is there some portion of the investment that is supposed to be interesting, fun, or enjoyable?

That’s the first question I posed in my video today.

The second has to do with the return.

These parcels of land cost $90,000 each back in 1998.  They’re valued around $350,000 today, each, despite the mix-up in my video (and were probably worth $500,000 before the 2008 market crash).

The FX rate in 1998 between USD/CAD was around $1.38, and it’s around $1.30 today.

The HOA fees on the land is a paltry $39 per month, per parcel.

I think we need to figure out the annualized return on this investment.

Don’t you?

There’s only one problem here, and it’s a big one: I’m supposed to be on vacation.

I have no problem doing the math; that’s not the issue here.  But I owe it to my wife and child to minimize the workload, and so far I’ve failed miserably.

So how about this: the first person to work out the annualized return ears a $100 gift card to Home Depot.

Sound fair?

The post What’s It Like Owning Raw Land As An Investment? appeared first on Toronto Realty Blog.