What numbers do I need to run before buying land to hold long term?

Before committing to a long hold, run through these numbers:

• Purchase price: the baseline everything else builds from.
• Annual property tax: this recurs every year regardless of market conditions, so it needs to be part of the ongoing cost picture, not treated as a one time expense.
• Loan payment, if financed: interest and principal over the expected hold period, since land loans often carry different terms than a typical mortgage.
• Rough appreciation assumptions for the area: based on what's actually happened in that market recently, not a hoped for growth rate.

Once those are laid out, compare total holding cost over the expected hold period, taxes plus any loan payments, compounded over however many years, against a realistic future sale price built on conservative appreciation assumptions, not optimistic ones.

The reason for conservatism here is straightforward: unlike a rental property, raw land produces no income while it's held. There's no rent check to offset the tax bill or loan payment if the market is slow to move, so the entire holding period runs on the buyer's own capital with no cushion. That makes it worth stress testing the numbers against a slower than expected appreciation scenario, not just the best case.

If the hold still makes sense after running the numbers conservatively, that's a much stronger signal than a deal that only works if the market cooperates exactly as hoped.