Is Buying Land A Good Investment?
Is buying land a good investment? In today’s economy, there are a lot of ways people can invest their money. There is no doubt about it, there is a lot of financial and investment advice to be had these days. Certain people make a lot of money by telling other folks what to do with their money. However, land is one investment that has traditionally provided a solid return and today it is an especially good place to invest money.
Perhaps Will Rogers said it best, “Buy Land. They ain’t making any more of the stuff.”
We spoke with Daniel Neely, an agribusiness lender with Farm Credit of Northwest Florida about looking at rural property for investment possibilities.
Why Is Buying Land a Good Investment?
“In a robust and growing economy, land values can increase rapidly. The increase of disposable income and cash available during good economic times can send more buyers into the market looking to purchase land,” Neely said, When the demand for land rises, prices typically follow the upward trend. A thoughtful evaluation of market conditions, and consideration for the land use and income potential are important when purchasing land in these periods.”
How Has Land Performed Historically?
As the economy moves upward or downward in response to conditions in the world, land values and return on investment can change also, However, in general, land maintains a good return on investment potential in all economic conditions.
“Owning or purchasing land, particularly farmland, is always a good long-term investment. During the recession of 2008, the average per acre price of land in the US dipped slightly but was less volatile than many other investment options. Generally, land values continue to appreciate steadily,” Neely advised.
What are Potential Profit Makers from Rural Property?
Making money from rural land purchase can come from a multitude of income generating sources. Rural land can pay good returns from agriculture, entertainment, outdoor recreation, and many other uses.
According to Neely, depending on the size, location, and composition, land owners have many ways to generate income from their land.
“Producing food such as fruits, vegetables, nuts, and berries can be accomplished on almost any amount of acreage. Larger tracts of land tend to be more suitable for agricultural commodities like peanuts, cotton, grains, livestock, and timber,” Neely pointed out. “Recreational activities like ATV trails and hunting leases can generate income from properties that may have terrain and water features that may otherwise limit their use. Some rural land owners have generated income with agritourism opportunities including corn mazes, pumpkin patches, Christmas light show, or event venues. The possibilities are endless.”
And Where Can We Find Financing for Investment Land?
Few individuals have the ready money to lay down for major rural land purchases, and most of us will need to find solid, long-term financing options for investment possibilities using rural land purchases. Working with a lender which specializes in rural land purchase and financing is always a good idea.
Neely says that Farm Credit of Northwest Florida offers a variety of financing options for people who live, work or play in the country.
“Whether you are considering a large land investment, purchasing a rural lot, buying farm equipment, or building your dream home, we have products to fit your needs. Long-term fixed rate financing is available for buyers wanting to mitigate the risk of rising interest rates which is especially important in the current economic climate. If rates were to lower again in the future, Farm Credit has the ability to modify your loan to lower the interest rate. Whether you’ve lived in the country your whole life or just getting started, Farm Credit has financing solutions for you. Give us a call today or in the meantime learn more by visiting www.GoRural.net.”
Farm Credit of Northwest Florida