Investing In Rural Land

Unless you have a use for it as a hobby (hunting) or plan to turn it into something that makes money (pasture) I’d say it wouldn’t be a very good investment. If you loan the money, your wasting money on interest for years for no reason, if you pay cash you are holding up cash for no reason, you’ll pay property taxes no matter what.

Many variables prevent an easy answer. What are growth aspects for the area? What percent of your assets would be required? How long can you leave your money tied up?

I can say that I have personally made filthy returns on rural land. But I am pretty active in real estate. The deals can be very lucrative. For every NVDA,story in the stock market, there are similar winners in real estate. There are losers as well. The liquidity concerns are real. There aren't many good answers for a situation where you want to sell a piece of land that is hard to sell.

For clarity, my experiences around buying land, turning it into building lots, and either building on the lots or selling them as !ots. If you are in a reasonably strong growth area, the better play might be investing in new residential construction. Buy a lot, hire a builder, build house, sell house. This is a smaller window of time, and easier to predict the outcome compared to buying rural land.

I have a good friend who came into some cash after selling his company and had the dream of owning a large parcel of land.

This isn’t your average guy. Really sharp and has done very well for himself. Did his research, thought about timber rights, etc.

An avid outdoorsman; he bought 1,000+ acres in rural South GA and put a nice log home and guesthouse plus improved the roads, installed fields for crops, the whole nine yards. I had the occasion to visit on multiple occasions and was even hired to guide some hunters from time to time.

He owned the property for almost 20 years and parted ways with it 3 years ago.

I asked him if he would do it again. He confided that it was a lot more work and more costly to maintain than he planned for. It also generated far less money than he expected. He said he made some amazing memories and met some great people. To that end; he said he’d of been much better off investing the money in the market and just booking a trip now and again to get his hunting fix.

He said lumber prices are awful and the timber proved difficult to sell because he wasn’t very close to the mill.

Land values while having gone up aren’t keeping up with the market.

So he stopped short of saying he regretted it; but, certainly seems happy to have ownership behind him.

I bought about 50 acres bordering a national forest, prime hunting but never can make the time for it. No trailer or camp on it but that was the original plan, now it sits unused

I will say I get almost weekly offers on it, although they’re national companies lowballing

I’m gonna assume he’s asking a general question and doesn’t have some potential diamond in the rough, future metropolitan area, in mind.

quote:

---

I have seen $1000/acre turn into $100,000/ acre

---

That’s possible, but about as likely as throwing 1k in some stock and it turning into the next Nvidia/Amazon. My point is that if you are looking at it from a purely investment standpoint, it’s not a good idea unless you have a plan for cash flow. It’s just real expensive lottery ticket.

Bought 60 acres last year cash for $1,500 an acre. Getting offers now for $2,000 an acre.

I simply wanted a place to hunt exotics in Texas when it wasn't whitetail season & something to hedge against the market.

I personally think it's a cool investment, especially if you enjoy the outdoors. First thing I do when I get to work each morning is get a cup of coffee and see what animals visited our property the night before.

My sister and I inherited some in North Louisiana recently, it's a hay field so we sell the hay to a local cattle rancher.

It's enough to cover the taxes and put about $500.00 a year in our pockets.

Not Much

We could sell it but you have to find someone with a spare 400K laying around to buy a pasture that's not going to be a very good ROI.

quote:

---

I wouldn’t buy any land without a plan for development or improvement. Rural or otherwise.

---

Agreed.. Need to understand the market as well.

There's alot more individuals that can afford a ~$150/200k property, not too many who can afford a $400k property.

Also, there a big difference in land value when it has electricity on it.. If OP is serious, I would suggest looking for a plot of land that is 1/2/3 poles away from power.. Simple ~$10k investment will then likely yield an addtional $1k an acre.