From the recent New York Times article Sure, Land Is Cheaper. So Is It Time to Buy?:

THE real estate market may have cooled, but investor demand may soon be heating up for at least one type of property: land.

“The time is ripe to start looking; I haven’t seen this market in 20 years,” said Jaime Raskulinecz, a real estate investor and property manager from Verona, N.J., who wants to buy land in the hard-hit market of Cape Coral, Fla. During a recent visit there, she found lots for sale on or near the water at about a third to half below their peak prices of two years ago.

Before you go thinking it’s all gravy, read further:

“Because everyone’s running away, some people think it’s time to invest, but it’s not for the faint of heart,” said C. Joseph Blackbourn, the president and chief executive of Everest Holdings in Scottsdale, Ariz., an active buyer of home-building lots in the Southwest since late last year. “There are a lot of expenses in holding land.”

Land investors will need to have cash on hand to cover most of those expenses. “Lending has all but disappeared,” said Joel B. Shapiro, the chief executive of Timbervest, an Atlanta investment company that manages about 900,000 acres of timberland nationwide. Just as the credit crisis has made terms on home mortgages more stringent, land loans, already deemed riskier by lenders, are harder to get and typically carry even higher down payments and interest rates.

So what are some of the other costs associated with land ownership, besides high borrowing expenses? There are property taxes, of course, and there may be liability insurance (in case someone is injured on the property) and maintenance expenses (to cut the grass or provide other upkeep).

Owners will also need to ensure that the land is environmentally safe. Sometimes toxic trash may be dumped on the property “unbeknownst to you, and you’ll be responsible for the cleanup,” said John T. Reed, the publisher of Real Estate Investor’s Monthly, a newsletter. “At 2 o’clock in the morning on a moonless night, who’s to say what’s being put there?”

The point being (and reason we posted this), there are always opportunities in real estate out there (even in down markets), and many, many people get very rich dealing in real estate, many also go bankrupt. With a little education, a bit of timing, and a lot of discipline, now might be the time for you to pull the trigger on some real estate investments. Key to the equation…it doesn’t have to be in San Francisco, and it doesn’t have to be millions of dollars.

–Sure, Land Is Cheaper. So Is It Time to Buy? [New York Times]