It’s Billing You.
Yesterday I mentioned how higher carrying costs affect what someone is willing to pay for property.
That matters more than most people think.
I sell a lot of lots. And this is something I explain to sellers regularly.
There’s a big difference between holding agricultural land way out of town and holding a $250,000 custom home lot in a subdivision.
If farmland is under ag exemption, the annual taxes can be negligible. Sometimes under ten dollars a year.
That is not the case with finished lots.
On a $250,000 custom home lot, you might be paying $5,000 to $6,000 per year in property taxes. Add an HOA that could run $700 to $2,000 annually. Add mowing, maintenance, maybe insurance.
And if you financed the purchase, don’t forget interest.
It adds up fast.
That’s real money leaving your account every year.
People will say, “Well, it’s gone up $30,000.”
Maybe it has. Over time, many do.
But markets do not move in straight lines. And the property has to appreciate enough to cover your carry costs before you’re even breaking even.
That’s the part that gets glossed over.
If you hold a lot for ten years and spend $50,000 carrying it, not counting interest or opportunity cost, and it goes up $100,000, you technically made $50,000.
That’s fine.
But that $50,000 did not show up all at once. It dripped out of your pocket every year while you waited.
That’s a different experience than the spreadsheet makes it look.
For most people, custom home lots are not great “investments” unless they were bought well under market to begin with.
If you’re a builder, that’s different.
If you plan to build in five years and want to lock something down now so you’re not scrambling later, that can make sense.
Just be clear-eyed about it.
If you pay $200,000 today and hold it five years, you may effectively be in it for $225,000 or $230,000 by the time you break ground.
I’ve sold plenty of lots where the original buyer fully intended to build.
Then life changed.
Plans shifted.
Priorities moved.
It happens more often than people admit.
There’s nothing wrong with holding. There’s nothing wrong with selling.
But there is something wrong with pretending the carrying costs don’t matter.
They do.
PS – If you own a lot or acreage and want a clear, no-obligation opinion of value, I’ll run a concise analysis based on real comps, tax data, carry costs, and actual market activity.
Land is different from residential. The math works differently.
You’ll know what you could realistically sell for today — and what it’s actually costing you to keep waiting.
PPS – If you know someone sitting on land “for someday,” feel free to forward this to them.
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