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Rural Land Investment
Posted on 1/6/24 at 7:35 pm
Posted on 1/6/24 at 7:35 pm
What are the thoughts on picking up acreage as a long-term hold? Not a hunter but using the land for some business activities or subleasing for those who hunt, timber, etc -
I read that auctions offer great windows into it but what are the thoughts? I am diversified and in a good spot to do something different
I read that auctions offer great windows into it but what are the thoughts? I am diversified and in a good spot to do something different
10
Posted on 1/6/24 at 9:29 pm to bamatiger90
I have been strongly considering the same thing the last year or so, but haven’t pulled the trigger. It is hard for me to get over making that size investment without much of a monthly or annual income from the property….especially comparing that vs my rental properties.
I am a hunter though so i would most likely buy a place i can hunt, so i would be relying on appreciation to get any return.
I am a hunter though so i would most likely buy a place i can hunt, so i would be relying on appreciation to get any return.
Posted on 1/6/24 at 9:40 pm to tigerfam2000
Seems like a lot of cash up front to just sit on it. How much land you talking though
Posted on 1/6/24 at 9:53 pm to HailToTheChiz
Not sure - probably more than 50 acres - happy to sit on it and play the long game when I sell it
Posted on 1/6/24 at 9:54 pm to bamatiger90
Can’t imagine buying rural land that I wouldn’t use for hunting, fishing, etc. One problem is that when you want to sell it can be harder to move than residential property. Or at least that is my impression.
Posted on 1/6/24 at 11:25 pm to HailToTheChiz
I was two weeks away from making an offer on 175 acres when someone put a contract on it.
Posted on 1/6/24 at 11:41 pm to tigerfam2000
I want a lot of land. Tough bc you can’t, typically, make money on it. owning a bunch of land sounds amazing to me though
Posted on 1/7/24 at 7:42 am to bamatiger90
Just relying on historical appreciation of rural land makes for a crappy ROI. Hunting leases are not lucrative enough to move the needle. Unless you can find a good deal ( and those are less common than ever) or derive significant personal enjoyment from land ownership and upkeep (and few actually enjoy the upkeep, maintenance on equipment, etc.) it’s not a good investment imo. And I own rural timberland.
This post was edited on 1/7/24 at 7:51 am
Posted on 1/7/24 at 8:54 am to turkish
You also can’t depreciate most of what you’re paying for.
I wouldn’t buy any land that I didn’t have an end-goal improvement/development in mind for. It’s too slow and unreliable a return otherwise.
I wouldn’t buy any land that I didn’t have an end-goal improvement/development in mind for. It’s too slow and unreliable a return otherwise.
Posted on 1/7/24 at 2:14 pm to bamatiger90
This thread is interesting. I inherited 75 acres of rural land. Not being used for anything currently but some friends hunt it. It’s 40 miles outside a major city so I was thinking of holding it to see how the price increases. There is also a small town 10 miles away that is building houses like crazy the last 2 years.
It seems from the current replies I would be better selling now and investing than waiting. Most recent appraisal I got was only $4000 an acre. Thoughts?
It seems from the current replies I would be better selling now and investing than waiting. Most recent appraisal I got was only $4000 an acre. Thoughts?
Posted on 1/7/24 at 4:14 pm to bamatiger90
I bought 130 acres in 2017 for $1875 per acre. Places around me selling in the $3,000-3,500 per acre range currently. Seems to have been a good investment but I don’t have plans to sell we use it to hunt. Helps that the surrounding area has seen steady development.
Posted on 1/7/24 at 6:20 pm to bamatiger90
quote:As a pure investment, it's likely lousy. If there are ancillary/non-tangible benefits, then it's up to your own personal utility curve.
What are the thoughts on picking up acreage as a long-term hold? Not a hunter but using the land for some business activities or subleasing for those who hunt, timber, etc -
I read that auctions offer great windows into it but what are the thoughts? I am diversified and in a good spot to do something different
Even in the bayoudude example given, that's only like a 7-8% IRR over the 7 years.
Posted on 1/7/24 at 7:29 pm to Big Scrub TX
For additional insight, while i am not a hunter, I like to do outdoors stuff, target shooting, ATVs, etc. So while it is an investment, I was kind of thinking about putting maybe a lodge/small getaway - wife loves the idea to go out and have property. So after writing the original post, starting to thinking about what it is about land and I think it is that - a place to go play, spend time outside etc - probably excessive but great place for kids/grandkids etc
Posted on 1/7/24 at 7:52 pm to bamatiger90
quote:Yeah, sounds like you just want some land and that it would be a cherry on top if it turned out to be a good "investment". If you can afford it for the uses you enumerated, then do it. Only one life!
or additional insight, while i am not a hunter, I like to do outdoors stuff, target shooting, ATVs, etc. So while it is an investment, I was kind of thinking about putting maybe a lodge/small getaway - wife loves the idea to go out and have property. So after writing the original post, starting to thinking about what it is about land and I think it is that - a place to go play, spend time outside etc - probably excessive but great place for kids/grandkids etc
Posted on 1/7/24 at 9:02 pm to bamatiger90
From a $ it may be even worse of an investment with a nice dwelling. I’m shopping listings daily and it seems people always take a loss on anything but the most basic barn, living quarters, unless it’s kept for a long time. Like I said, it’s only even a decent investment if you derive significant personal enjoyment from it. Many do, but it’s not the best strategy to grow your net worth.
This post was edited on 1/7/24 at 9:04 pm
Posted on 1/7/24 at 9:03 pm to Big Scrub TX
quote:
Even in the bayoudude example given, that's only like a 7-8% IRR over the 7 years.
Could have bought a boat for the $250k but at least this is still worth more than I paid and the family has really enjoyed it. Something very satisfying having your own property to get away to.
ETA: as to the post above that’s why we haven’t built on it. All the places with a nice home/lodge are worth less than The land and home combined when we were shopping around I noticed that. I put a barn but if I had put a $300-400k home it would be tough to get the $550-650 back out but the bare land no problem. I have put a barn though.
This post was edited on 1/7/24 at 9:08 pm
Posted on 1/8/24 at 1:12 am to bamatiger90
I handle most of the land sales in our brokerage, mostly because realtors in general hate dealing with land. Commissions are low and they don’t understand it.
I don’t need the money and like it.
Important things to consider, access, flood plain, topography.
If it’s got all 3, it’s worth looking at to hold in the south, I can’t really speak to other areas of the country as the dynamics are different.
Find a crazy realtor like me to do a lot of your legwork for you to find a good option. Once you have the timber cut the first time, you’ll have to spend a fair bit cleaning up their mess, but once you have you can replant for future timber harvesting, set up for hunting, subdivide it, etc.
It’s a 10-20 year plan minimum if you ask me, but a good long term one. They aren’t making any more.
I don’t need the money and like it.
Important things to consider, access, flood plain, topography.
If it’s got all 3, it’s worth looking at to hold in the south, I can’t really speak to other areas of the country as the dynamics are different.
Find a crazy realtor like me to do a lot of your legwork for you to find a good option. Once you have the timber cut the first time, you’ll have to spend a fair bit cleaning up their mess, but once you have you can replant for future timber harvesting, set up for hunting, subdivide it, etc.
It’s a 10-20 year plan minimum if you ask me, but a good long term one. They aren’t making any more.
Posted on 1/8/24 at 1:15 am to Drizzt
quote:If the access is good, isn’t in a flood plain and the terrain isn’t bad, talk to a surveyor about subdividing it, then look up a local builder who does a pretty good amount of work and partner the project with them.
It seems from the current replies I would be better selling now and investing than waiting. Most recent appraisal I got was only $4000 an acre. Thoughts?
Posted on 1/8/24 at 8:01 am to bamatiger90
Depending on what the land is now, you could get federal/ state grants and tax breaks to reforest the land and then sell the carbon credits to west coast idiots
Posted on 1/8/24 at 8:26 am to bamatiger90
True Rural land outside of urban sprawl boundaries have a very slow appreciation rate. Not much "investment" opportunity unless you use it for timber or recreation. There is always the oddball situation where a wealthy neighbor wants to buy your adjoining land for a high price or some industrial facility being built near you to shoot values up, other than that values/prices ride boringly steady.
Best bet for appreciation is to stay within 30-50 miles of major urban areas and wait 10 years until the suburbs make their way to you. Subdivide and sell.
Best bet for appreciation is to stay within 30-50 miles of major urban areas and wait 10 years until the suburbs make their way to you. Subdivide and sell.
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