Home Forums Miscellaneous Topics Stock Market and Investing Rural Land

Is rural land a good investment? Why or why not?

There is a section of the country where I have explored the possibility of purchasing rural land. At least there, what I have been told is that if you want out, it may take a good while to sell it.

I am sure that is not the case with all rural land ... just where I like.

So, at least for me, it means being pretty sure you like what you are getting, in case you have to sit on it for a while.

The difference between a good buy on rural land and a bad buy on rural land it time. Rio7

That is what an old Colt collector used to tell me, I didn't pay to much, I just bought it to soon!

I like Iowa farm land. I was raised that way.

I looked at a place like that in NE New Mexico a few years back. Low $ per acre, but in the middle of nowhere and hard to sell. Groundwater was a problem in that area but cool country with mule deer, pronghorn and the occasional elk or black bear wondering down the river from the mountains.

Oddly enough, I was looking at the survey and noticed one of my high school classmates owned that place. I think he'd been on the market a couple of years then and took a couple of more to sell it.

I'm no expert but from what I hear, Iowa farm land is expensive these days. Correct?

I've made a couple of these investments to date. I really love rural land, but trying to figure out how to make it work in a sustainable manner. I've traveled around the country and looked at regenerative farm operations and love what they are doing, but it is really hard and labor intensive.

I appreciate the comments.

It depends on location. Upper Midwest, farm ground is very expensive and in some cases the crops won’t cover the cost, but maybe appreciation of land price over time will make up for that. Or maybe not.
I’ve bought land in Ks and working on trying to buy another 320 acres. It will sell for $1500 or less per acre.

Real rural, like adjoining National Forest Land was pretty stable pricewise around NorCal for years. Then it seemed there was an attitude change during covid, city dwellers decided that owning a piece of land, the more remote, the better became a good idea (don't ask me why, I don't know). So, bare land, small parcels from 5 to 40 acres jumped in 18 months from around 3,000 an acre to 5,000 and WAY more if there was running water. Will it prove to be a good investment? With no power, it's going to be awhile before it becomes a good deal IMO. Solar in my area,if the new owners are thinking off grid lifestyle, this timbered steep country, is almost useless. As an example I live in a river valley, time change to time change, sun generally appears about 8 PST and goes down around 3:30 PST...that isn't enough time to bring a battery bank up for the next 16 hours...notwithstanding clouds and snow on the panels.

Is the half section you're looking at in Kansas farmland? Dryland or irrigated?

It’s dry land farm land that my brother and before him have leased for 50 years. The owner is wanting to sell it.

Rural land has always been a good investment in my area. Wish I would have invested more in it years ago.

We are in the middle of nowhere. We bought 80ac in SE KS in 2010 for $800/ac. The 80 next to me just sold for $4800/ac. I would consider that a good investment.

Only if you sell.

So it isn’t a good investment if I don’t sell ?

When we bought our 42 acre lot in 2014 it cost $4K a acre. Locals were shocked we paid that much (it is public record). I heard time after time what they could of paid for a few years before we did. Or what their Uncle paid for his lot 10 years ago. Or what their brother sold it for 15 years ago, etc etc etc.

Two years ago the lot next to us sold for $26K a acre. And there was a condemned house on the lot the new owner had to pay to tear down and carry away before he could build in the same spot. 650% profit in 9 years is not to shabby.

Of course, it helps we are in Tennessee where people are moving to in droves to escape high taxes and leftist politics.

Good Iowa farmland runs from 10, to 20 thousand. Location is a lot.
The old, it's easer to pay too much for a "poor farm, than a good farm.

IDK, Ive got my doubts. Gotta pay property taxes of 1-2% a year. Carrying costs. Maintenance. No depreciation. I think as an investment, it's got some potential problems.

"They are not making any more of it."

That is true Mr. Wabigoon and the realtors always tell me that,,, and then I tell them ," Ain't no one taken it with them neither".. They get a little quiet then.

Well, we are about as happy as we make our minds to be.

Location, location and location !

Good answer to that old, classic realtor claim.

DF

I started buying farmland in Saskatchewan in the mid 2000s. The first two quarters cost me $250 an acre at a slightly reduced family price but most was cheaper, and some with good building/recreation potential/location quite a bit more. Judging by neighboring sales that dirt is going for $3500-5000 an acre for cultivated acres. In the meantime I've long ago recouped my modest initial investment through cash rents.

I almost bought 80 acres near Bear Lake 6 years ago for $2000 an acre but the timing was wrong with a new house, health issues, and job change. I knew it was a deal and wish I'd have just done it. Now that same land could not be bought fir 10 times that amount.

Sometimes good deals come up and you usually know it when your getting one. Lately it's been harder to find a deal. I bought 4 rental houses from 2012-2016 that were all good deals. Then I made the mistake of selling a few too early. I made modest gains but nothing like I could have if I'd have waited.

Bb

Wish I'd bought that main street lot in Telluride, CO in the hippie town 1980s for $50,000, or the bankrupt condo development for $2 Million during the oil bust a few years later. Oh well, at least I'm happy.

Late in the housing crash... I had just paid my house. A 20 acer parcel went up for sale just down the street from my house... A bank had it...

I put a fair offer in at $2525/acer. Money borrowed to buy land was a higher rate than a home mortgage. So I re-mortgage my house for $51k and bought it.... 20 acers of open farm land with only a few trees on the fence lines... and one row of trees 10 feet deep along one side.

I planted fruit trees in the fence line, asparagus in other fence lines, cut down some trees out of the fence line and heat my house with the wood and a whole bunch of deer in the years that corn is going on it...

Property taxes are $260/year and I rent it out to a guy every year for $600.00

Three friends of mine, with my permission, have shot their first deer ever... off that stupid, flat, treeless 20 acer field... just crazy.

Last fall, a 20 acer piece 2 miles from me sold for 200k in 5 days for the asking price.

I tell family and freinds.... that 20 acers is going to pay for my retirement home cost....

I bought this place where we built our house 20 years ago for 3k an acre. Today, land around me is selling for 30k+ an acre. I can’t imagine it will jump 10x in the next 20 years, but who the hell knows?

I bought the 80 my house sits on for a little over $2400 an acre in 2007.

New neighbor just bought 22 acres across from me for closet to $195K.

Taxes on the agricultural portion of my land haven't increased that much, but but the house, barn, and ground the house sits on cost me just shy of $8K in property taxes annually. I'd really like to find a decent hunting property, but the cost per acre now is phenomenal and the interest rates on undeveloped land are unreal now. Back when we bought our spread it was 8%, when home mortgages were around 4%.

I came of age in the early ‘80’s, and rural land, neither farm land or recreational properties, were a good investment.

Ever since, interest rates have been dropping and land prices have been jumping. I see land as an interest rate play. If rates stay higher, or, dare I say, go even higher, the demand for land will dry up and prices will stagnate for a long time.

If rates drop back significantly (which I seriously doubt) prices will continue to appreciate. Just look in your crystal ball.