I've got about 20K in savings now, and guessing that the pile should get up to about $40K by the end of the year. My parents might also give me about 200K or so, by the end of the year.
I'm really looking into investing this money into acreage. Not houses or cheap Florida condos, but land that's viable for agriculture/timber/eco-tourism etc. I've been looking at properties in the US, but they all seem too expensive. Either that, or acreage in the NM desert without mineral rights (completely useless). I'm certainly open to buying stuff outside the country. I've looked at some in Canada and Brazil, but I'm not very comfortable taking the plunge, given my limited knowledge in this field. I can buy about 70 acres or so in Ontario for about $40K. Good deal or not? I'm confused..
Does anyone know of any good places I should be looking at? Or some resources/websites I should be looking at?
Any suggestions would be greatly appreciated...
Land as an investment
Started by
vickpr
, Jul 03 2012 04:29 PM
5 replies to this topic
#1
Posted 03 July 2012 - 04:29 PM
#2
Posted 03 July 2012 - 05:50 PM
I think with no experience it'll be easier to figure out the stock market.
Speculative land should generally be considered a VERY long term investment. As in plan on passing it down to your descendents. Meanwhile you have to pay property taxes and insurance.
If there's timber on it you get to harvest once every 50 years or so. If you want to grow or ranch on it that's a separate area of expertise, although maybe you can rent it out for this purpose. A lot of land in areas known to have resources underneath DOES NOT come with mining rights -- be careful about this. Some mining claims here in Colorado have been held in the same family for more than 100 years with no mining done since the last silver boom ended (1904 I think).
You want to try to buy from a forced seller -- divorce, messy family situation, settling of a will, bankruptcy etc. Even then, the mining/oil/timber companies know what comes up for sale and how valuable the land is and will pay (or not pay) accordingly.
Unless you're actively farming it or hoping for an Interstate to come through or a Wal-Mart to get built there's not much you can do with, say, 100 acres. Big ranches do get traded from one billionare to the next, but these plots are in the thousands or tens of thousands of acres. (1 mi^2 = 640 acres)
There are a lot of timber and natural-resource REITs out there. These provide steady cash income (dividends) while you're waiting for the land to appreciate and/or the economy to improve. And they're managed by people who are experts in the business and can take advantage of economies of scale.
Speculative land should generally be considered a VERY long term investment. As in plan on passing it down to your descendents. Meanwhile you have to pay property taxes and insurance.
If there's timber on it you get to harvest once every 50 years or so. If you want to grow or ranch on it that's a separate area of expertise, although maybe you can rent it out for this purpose. A lot of land in areas known to have resources underneath DOES NOT come with mining rights -- be careful about this. Some mining claims here in Colorado have been held in the same family for more than 100 years with no mining done since the last silver boom ended (1904 I think).
You want to try to buy from a forced seller -- divorce, messy family situation, settling of a will, bankruptcy etc. Even then, the mining/oil/timber companies know what comes up for sale and how valuable the land is and will pay (or not pay) accordingly.
Unless you're actively farming it or hoping for an Interstate to come through or a Wal-Mart to get built there's not much you can do with, say, 100 acres. Big ranches do get traded from one billionare to the next, but these plots are in the thousands or tens of thousands of acres. (1 mi^2 = 640 acres)
There are a lot of timber and natural-resource REITs out there. These provide steady cash income (dividends) while you're waiting for the land to appreciate and/or the economy to improve. And they're managed by people who are experts in the business and can take advantage of economies of scale.
#3
Chris in OK
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Posted 03 July 2012 - 06:43 PM
You can get land in Oklahoma as low as $2000 an acre.
#4
Posted 05 July 2012 - 09:04 PM
Thanks for the responses, jv01 and Chris. I have to say "been there, done that" when it comes to standard investments like stocks, bonds, futures, ETFs, etc.. I'd feel more comfortable exchanging my money for a piece of land. I;d prefer to own some outright vs synthetically through REITs. Worst case, I can grow something on it or lease it out to someone. I don't plan on ever making any babies, so passing it on is unlikely. I just think that land prices are going much higher within the next 10-30 years and I would feel comfortable sitting on a nice chunk of it.
At the very least, I would love to have a nice big parcel of land that I can build a small cabin on, and maybe live off the neighboring jungle? Born and raised in a metropolitan area, I know that this is highly unlikely, but I like to dream that this is still a possibility.
I also love to travel and experience new countries/cultures, so I don't really care to stay in the US or Canada... As long as I can find a country that is politically stable and the prices are within my reach...
Chris - Thanks for the suggestions about OK. I'll definitely look into it...
At the very least, I would love to have a nice big parcel of land that I can build a small cabin on, and maybe live off the neighboring jungle? Born and raised in a metropolitan area, I know that this is highly unlikely, but I like to dream that this is still a possibility.
I also love to travel and experience new countries/cultures, so I don't really care to stay in the US or Canada... As long as I can find a country that is politically stable and the prices are within my reach...
Chris - Thanks for the suggestions about OK. I'll definitely look into it...
#5
Posted 09 July 2012 - 10:26 AM
You considered the taxes you will pay each year?
I live in an area where 100 acres is a small plot of land and an acre will run you 2-3K. And this is prime farming or wooded land, not gulleys. This is also the same price per acre as it was 10-15 years ago. Unless you have the inside scoop on where the highway is going or mall, you are in for a surprise when it comes time to sell.
Less people are into farming, not more. And those that do farm already have their land leased. I doubt you will get some new guy to come in and start farming your land for a fee. If you are planning that route, what is the local crop for your land type? Have you factored in the quality of soil you have or any clear cutting or leveling you will have to do?
Can you get road access, water access, sewer access, electricity acess for a house or farm equipment?
Does it have a water source for cattle or farming (other then rain)?
You will never find enough personal use for land that size. I have family with 300 acres (and know more people with lots of 100) and there are parts of that land no one walks on for years.
It's a idealistic idea, living on your own large parcel of land and growing your own food. But you can do that on 5 acres. I've have "city" friends whose idea of having a big yard for their house is 1/2 an acre. My inlaws drive way is 1/4 a mile long sitting on 100 actres or so. You know how much a tractor costs to mow it? Or how much time it takes to keep the undergrowth cut to keep snakes, coyotes, racoons and squirrels from killing your dog, getting in your attic or trashing your garbage every where?
A. Raw land is a horrible investment.
B. It's a lot of work.
C. I would never borrow money from my parents. I'm an adult.
Just to give people an idea, because most don't know. An acre of land is about 90% the size of a football field. Now extrapolate that out to 100 acres.
Found this local link: If you want to know which properties are swamps, look for "duck hunting".
http://westtnland.com/
I live in an area where 100 acres is a small plot of land and an acre will run you 2-3K. And this is prime farming or wooded land, not gulleys. This is also the same price per acre as it was 10-15 years ago. Unless you have the inside scoop on where the highway is going or mall, you are in for a surprise when it comes time to sell.
Less people are into farming, not more. And those that do farm already have their land leased. I doubt you will get some new guy to come in and start farming your land for a fee. If you are planning that route, what is the local crop for your land type? Have you factored in the quality of soil you have or any clear cutting or leveling you will have to do?
Can you get road access, water access, sewer access, electricity acess for a house or farm equipment?
Does it have a water source for cattle or farming (other then rain)?
You will never find enough personal use for land that size. I have family with 300 acres (and know more people with lots of 100) and there are parts of that land no one walks on for years.
It's a idealistic idea, living on your own large parcel of land and growing your own food. But you can do that on 5 acres. I've have "city" friends whose idea of having a big yard for their house is 1/2 an acre. My inlaws drive way is 1/4 a mile long sitting on 100 actres or so. You know how much a tractor costs to mow it? Or how much time it takes to keep the undergrowth cut to keep snakes, coyotes, racoons and squirrels from killing your dog, getting in your attic or trashing your garbage every where?
A. Raw land is a horrible investment.
B. It's a lot of work.
C. I would never borrow money from my parents. I'm an adult.
Just to give people an idea, because most don't know. An acre of land is about 90% the size of a football field. Now extrapolate that out to 100 acres.
Found this local link: If you want to know which properties are swamps, look for "duck hunting".
http://westtnland.com/
#6
Posted 25 July 2012 - 03:29 PM
My dad bought 300+ acres in a tax sale years back, here in Texas. He sold half in the past five years and that half nearly paid off his other half. It's definitely a good investment...there will never be anymore land! Anyways, he hunts. So, during the hunting seasons he would lease out the place for a few weekends and that's a lucrative business! He does have a couple campers there, so there was a place to stay. But even if there weren't, people would still flock. Also, he put some cows on the land and gets an ag exemption so his taxes per year and SUPER cheap.
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