Is Nevada Land a Good Investment?

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Is Nevada Land a Good Investment?
By

Bart Waldon

Nicknamed the Silver State thanks to its rich mining history, Nevada offers some intriguing opportunities for land investors. This unique Western state boasts massive wide-open spaces with room for growth galore. But before jumping on the chance to buy up Nevada's undeveloped land plots, it pays to dig into the details. Does snatching up real estate on this often dusty, desolate-feeling frontier actually pencil out financially? Or are there perhaps some sagebrush-covered risks that could leave investments stranded?

Spanning a Texas-sized 110,000+ square miles total, don't let Nevada's ranking as the 7th biggest state by sheer land area fool you - it's surprisingly one of America's most sparsely populated zones on a per capita basis. Yet amid these lonesome desert and mountain landscapes, recent decades have seen more folks and businesses flocking to population centers like the ever-popping Las Vegas and Reno metros. And indeed, the overall growth trajectory continues pointing north, signaling future development demands ahead.

Tourism, gaming, manufacturing, mining, and logistics form the economic backbone according to officials. Major big-name companies Caesars, MGM Resorts, Wynn, and Barrick Gold all house headquarters locally. Attractive tax benefits also lure new residents and entrepreneurs alike to set up shop. While vulnerabilities to national recessions remain, Nevada incentivizes both businesses and workers to keep investing in its land-rich future.

So, whether buying a plot in Nevada represents sage investment wisdom or financial fool's gold depends on carefully evaluating the range of factors and risks in play across this unusual state. Let’s take a data-driven look under the surface to reveal the true beneficiaries - and potential victims - of Nevada's land rush.

Benefits of Buying Nevada Land

Development Potential

Despite rapid growth in recent years, Nevada still has substantial undeveloped land representing opportunities for commercial and residential real estate development. The statewide population is projected to continue rising at over 1% annually. And major urban centers even show higher growth rates, signaling lucrative prospects.

As the population rises, so does demand for housing, retail, mixed used spaces, and other properties. Investors who acquire vacant land plots today can benefit down the road by selling or leasing the land once development increases in the surrounding area.

However, development potential varies greatly by specific location within Nevada. Land near expanding cities and towns generally holds the most potential to accrue value from rising demand.

Tourism Industry Strength

Las Vegas and Reno in particular have thriving tourism, entertainment, and conventions industries that fuel their economies. Even during nationwide recessions, these urban hubs demonstrate resilience.

Owning land near these continually expanding tourism centers can be profitable as the customer base grows for hospitality and supporting businesses. Plots zoned for hotels, casinos, restaurants, mixed use buildings and more have incredibly strong value.

Outdoor Recreation

Nevada's natural landscape like mountains and deserts drive outdoor recreational tourism as well. Areas located near hiking trails, campgrounds, lakes, ski resorts and other attractions offer yet another avenue to benefit from rising visitor numbers. Investors can buy land to develop their own recreational spaces or sell/lease for interested hospitality companies.

Natural Resources

Nevada is rich with metals, minerals, oil and lithium reserves supporting active mining and resource extraction operations today. New discoveries continue to emerge across rural areas as well. Owning land atop untapped reserves provides the chance to profit massively down the line by selling mineral rights.

Risks & Challenges Buying Nevada Land

Market Volatility

Like most real estate, Nevada land prices can be highly volatile over time especially if a recession hits. Valuations rapidly inflated until 2008 until crashing over 50% in some parts of Nevada during the housing crisis. Prices have risen steadily in recent years but market uncertainties still bring risks.

It takes extensive market analysis to determine fair pricing and wise investments with the potential to deliver solid returns over 5-10 year time horizons or longer. Without proper due diligence, investors could significantly overpay and end up upside down if the market shifts.

Long Sales Timelines

Vacant land parcels often take quite long to officially change ownership compared to existing developed properties. Industry experts estimate average timelines between 1-2 years to sell Nevada land even with aggressive marketing and pricing tactics.

Land investors must factor in extended holding periods for their capital when assessing ROI potentials for purchases. Alternatively, accepting offers from professional land buying companies can help sellers offload land faster.

Development Complexities

Actually, preparing raw land for commercial or residential construction involves permitting, environmental approvals, zoning changes, infrastructure building and more. These processes notoriously take years and substantial capital beyond just the initial land purchase outlays before revenue generation can begin.

Not fully accounting for these complexities poses massive financial risks and delays for overly eager land investors. Extensive planning is required to tackle development appropriately in Nevada's often harsh and remote environments.

Top Nevada Land Investment Locations

Las Vegas Metro

Las Vegas remains one of America’s fastest growing metropolitan areas. The city attracts over 40 million visitors per year and has an economy largely resistant to national recessions thanks to robust tourism.

Land in neighborhoods along the suburban periphery demonstrate strong value growth from the endless demand for more housing and supporting commercial buildings. Plots within a 30-minute drive from the Strip can be particularly lucrative buys. However, land directly adjacent to the Strip has valuations exceeding most other regions of the country already.

Reno Area

Although smaller than Las Vegas, Reno also benefits from tourism rooted around casinos and outdoor recreation. Major companies like Tesla, Microsoft, and Amazon have large operations supporting more diversity in the local economy too. With an influx of new residents and businesses catering to various economic sectors, land values consistently trend upwards around Reno similar to Las Vegas.

Pahrump

Pahrump represents an enticing blend of proximity to Las Vegas along with affordable land valuations. Located only an hour drive from metropolitan amenities yet still largely rural in character today, the Pahrump Valley holds intriguing potential for incoming residents and businesses. Land owners can cater to retirement communities or leverage the eventual path of development marching onwards from Las Vegas in coming decades.

Is Buying Nevada Land Worth the Investment?

In summary, Nevada land does present lucrative investment upside stemming from high growth forecasts across both urban and rural areas of the Silver State. However, market complexities, long sales cycles, and development costs pose notable risks to manage as well. Conducting careful due diligence around market comparable, property demand drivers, and hidden development burdens is essential before making any major land purchases across Nevada's diverse landscape.

Final Thoughts

Nevada offers a unique intersection of high growth potential yet still relatively affordable land valuations across both urban and rural regions. While the glamour of Las Vegas tempts many prospective real estate investors, even more overlooked spots like Reno and Pahrump display compelling opportunities as well. However, speculation requires caution as the turbulent history illustrates vulnerabilities when market sentiments shift suddenly. Conducting rigorous research, managing risks, and taking a long-term view allows Nevada land investments to yield fruitful rewards over time through rising property demand as population and economic expansion continues unfolding across the Silver State. Although market fluctuations always bring uncertainties, the overall trajectory points further upwards as Nevada transforms gradually from wild west frontier image into one of America’s most dynamic states. For investment portfolios aimed at growth, Nevada lands represent an alluring inclusion providing some glitter among assets.

Frequently Asked Questions (FAQs)

What parts of Nevada are best for land investments? 

The most lucrative areas for Nevada land investments are near major cities like Las Vegas and Reno where strong population and business growth fuels demand for development. Other promising locations include outskirts of tourism centers like Pahrump and rural lands containing mineral rights.

How quickly can I make returns on vacant Nevada land? 

It typically takes 1-2 years just to sell Nevada land even at reasonable prices. Factoring construction and development, investors should expect 5-10 year timelines before vacant land begins generating returns through sale, rents or business ventures.

What risks should I evaluate before buying Nevada land? 

Market volatility, long sales cycles, and development costs/barriers like permitting are top risks with Nevada land. Conduct thorough due diligence on recent sales, property demand drivers, and regulations before making any purchases.

Do Nevada lands usually rise in value over the long-term?

Historically Nevada has experienced overall steady real estate appreciation across decades as population and economic growth occurs. However, periodic market corrections have resulted in 50% or greater drops during recessions before values recover.

Should I develop the land myself or sell to interested builders? 

Developing raw land, yourself requires extensive capital and planning across permitting, zoning changes, infrastructure and construction. Most individual land investors prefer selling or leasing to major developers with resources to tackle projects at scale. But substantial profits accrue to those able to self-fund construction.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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