Land prices / insane!!!

[2-bucks]

Buy when you can. let's say I'm 40 and can afford my first hunting land purchase but want lower prices. I wait 4 years to hopefully get a correction. Well even if I use the property heavily until I'm 80, I still lost 10% of my years of enjoyment. I literally can't remember a time I've heard someone with rec land say man I wish I wouldn't have bought that place. But I sure have heard the opposite! Many times!

 

[Trapshooter1]

I've always been of the opinion be greedy when people are fearful and be fearful when people are greedy.

Land is and has been a good investment for many people. But there are also people where it buried them financially. 80s farm crisis.(most of them are not around the community anymore to tell that story)
I bought my first piece 3 falls ago, Dad thought I was nuts. Hindsight says it was a good deal. Sometimes you get lucky.

I'm a fan of being patient, but be quick to an opportunity if that right opportunity presents itself.

Also note I'm not a fan of buying a non income producing property. That to me seems foolish. When I see the 6-7-8,000/acre timber tracts that just doesn't make any sense to me, Idc how "big" the deer is. Lol

 

[jflournoy]

I've always been of the opinion be greedy when people are fearful and be fearful when people are greedy.

Land is and has been a good investment for many people. But there are also people where it buried them financially. 80s farm crisis.(most of them are not around the community anymore to tell that story)
I bought my first piece 3 falls ago, Dad thought I was nuts. Hindsight says it was a good deal. Sometimes you get lucky.

I'm a fan of being patient, but be quick to an opportunity if that right opportunity presents itself.

Also note I'm not a fan of buying a non income producing property. That to me seems foolish. When I see the 6-7-8,000/acre timber tracts that just doesn't make any sense to me, Idc how "big" the deer is. Lol

Agree with you here very much. That first line is what Warren Buffett has always said about stock market investing. I try to follow that principle in stock market investing myself. I love when the market is down big 3 or 4 days in a row and the average investor is selling hand over fist. I look at that as a potentially good opportunity to start *buying* hand over fist. I don't see why it doesn't apply to land investing also, and I'm guessing that's where a lot of cash buyers are right now. They're keeping their powder dry so they can pick up some good deals if the opportunity presents. Of course there are different philosophies. Some people say by not being in the market, and holding cash, there is a "lost opportunity" cost. In some cases that's true if the market is rising, but it's not true if the market is falling.

Also agree on the purchase of income producing property, most especially if you're financing a big chunk of the purchase. Sadly the days of 3%+ roi rec or combo ground purchases in southern Iowa seem to be mostly in the past. But even a 2% roi is better than zero.

 

[Thinkin Rut]

I think the sooner you understand the difference between real investing and buying land (Rec) the better off you'll be as a new land buyer. When you're buying land, you're buying a lifestyle and in order to turn that lifestyle into an investment you have to get out of the lifestyle or have less of that lifestyle. If you have a 2% ROI it cuts your cost of the lifestyle, when you pay taxes and insurance your cost of the lifestyle goes up. Buy a tractor, put in a new fence your cost goes up, get a tax break for those, your cost goes down. Pay a high interest rate...your cost goes way up. Pay cash, you lose the growth of that cash...that has to go into the equation. Seldom are you in the black on Rec ground but you are living the lifestyle the whole time. Even if you bought land for 1500 an acre 20 years ago and compare it to the stock market during that same time frame today and you want to get out of the lifestyle, you would be hard pressed to pencil it out for a gain, especially when the government kicks you in the teeth on your way out. Leaving the lifestyle to your family when you die is your best bet with a step-up in basis, but you had better get everything in writing before you pass and give it away 7 years before your passing. Enjoy the lifestyle if you can afford it and be careful to not let it escape you. TSI time when it warms up a bit!!!

 

[sure shot]

What do you think a reasonable percent increase is for say the last 5 years? In other words land bought 5 years ago, would be worth 1.3 times that now, 1.5 times, 2 times?

Those that say buy no matter what, if the seller is charging double what they paid 5 years ago, are you still saying buy?

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[Hardwood11]

I bought a farm in 2017 and it’s doubled . I bought a farm in 2019 and it’s up (65-70%). In both cases I think they were undervalued. So there’s no perfect formula.

 

[CottonwoodCanyon]

IMO- if you can buy now you SHOULD. Beg, borrow, leverage. Whatever it takes. Just don't be silly with too much risk. Understand the investment and not just the price.

Most likely there is NO correction coming that will have a large enough impact to make a deal great. Yep, interest rates are a little high but not wildly out of historical norms. The Fed has already said they are planning 3 rate cuts next year so you can always refi to a better rate. In another 10 years you will be saying, "Dang, I wish I would have bought xyz property back in 2024 when land was cheap!".....and you will still be waiting on the "Big Correction" that never comes.

Owning land pays you 3 ways
1. You make money on the appreciation- recently 10-15% per year
2. You make money from rents or crp- 2-5%
3. You make money with tax write off- another couple percent- get a good CPA
Bonus #4 if you work on the land (fixing fence, tsi, food plots, clearing invasives), you get better health and happiness

I bought my first piece of land 8 years ago. It was just 80 acres and I paid $3500/acre. Every single person I knew and didn't know said I paid WAY TOO MUCH. Family and friends openly mocked my purchase. Well, today I could sell it easily for $6k/acre, made $56k in CRP, and tens of thousands in tax deductions.. And the haters are still sitting on the sidelines waiting for a "correction". I have since paid off that property and used it as leverage to purchase 2 other properties that are also providing income and asset increases. Additionally, inflation is actually your friend with the more land/properties you own.

Lastly, we desperatlely need more hunters being land owners.

I agree with you 100% but I'm curious. Can you elaborate on the last part there? I know a lot of people (including me) who have had hunting permission on a property their whole lives that then recently sells to someone specifically for hunting and multiple people lose a place to hunt. Sometimes thier only private place to hunt. I'm blessed that my family owns land, and we hunt but we also let other friends and family on too, so I get what you're saying but that is a double edged sword when a landowner, and solely the landowner, hunt a piece that has been "shared" for decades. So I guess my questions is, why desperately?

 

[MarkF]

What do you think a reasonable percent increase is for say the last 5 years? In other words land bought 5 years ago, would be worth 1.3 times that now, 1.5 times, 2 times?

Those that say buy no matter what, if the seller is charging double what they paid 5 years ago, are you still saying buy?

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What the seller paid for the property 5 years ago should have nothing to do with if you buy of not in my opinion, current market value is really what I care about. If the market crashed and the seller lost thousands would you feel like you should still give them what they paid? I doubt it.

 

[Lucky 13]

Hey cottonwood

Here is what I mean. The biggest problem facing wildlife in many midwestern states in a loss of habitat. Look at any aerial photography from any county in Iowa for the last 30 years and you will typically see a huge degredation of habitat. Every year an Army of excavators and dozers are clearing more habitat for farmland. I AM NOT BLAMING THE FARMERS, I understand they have to make a living on tight margins and it is their land to do what they want. But the result is not good for hunting. Also, farmers that still have habitat are realizing more and more that selling hunting leases is very profitable. So although some still allow others to hunt their property for free, it is becoming more and more rare. And don't forget about the urban sprawl.

So, having landowners(REC land) that are hunters helps provide food and habitat that benefits deer, turkey, pheasants, and quail in a large radius outside that property.

Now, are there some that do high fence, are there some who hog large tracks all for themselves, of course. But I believe that most have a net positive impact on the surrounding area when compared to houses and BIG AG. Even better, if you can get a few neighboring, landowning hunters to work together with agreeing on good QDM, the result is a force multiplier for hunting miles around. Just think what happens when neighbors agree to go from "brown and down" to self regulated age restrictions for harvesting bucks and managing doe populations. Educating landowners and hunters is the key to success IMO.

All the arguing about rifle cartidges, crossbows, season dates, party hunting, etc is void when the habitat is permenantly removed. Areas I hunted as a kid in the 80's haven't seen a deer or pheasant in a long time now largely because the timber, fencerows, hedges and waterways are gone.

2 cents

 

[Windlooker]

A farmer and a dozer, most dangerous man in Iowa.

 

[8bitnes]

I agree with you 100% but I'm curious. Can you elaborate on the last part there? I know a lot of people (including me) who have had hunting permission on a property their whole lives that then recently sells to someone specifically for hunting and multiple people lose a place to hunt. Sometimes thier only private place to hunt. I'm blessed that my family owns land, and we hunt but we also let other friends and family on too, so I get what you're saying but that is a double edged sword when a landowner, and solely the landowner, hunt a piece that has been "shared" for decades. So I guess my questions is, why desperately?

Because there are landowners buying up the land strictly for agricultural purposes and making "improvements" such as clearing all the trees from waterways to increase crop yields. That, in turn, eliminates habitat for wildlife. Even if you don't get to hunt that specific parcel, the wildlife is transient and more habitat is better than eliminated habitat. Just one example; I'm sure there are others

 

[8bitnes]

What do you think a reasonable percent increase is for say the last 5 years? In other words land bought 5 years ago, would be worth 1.3 times that now, 1.5 times, 2 times?

Those that say buy no matter what, if the seller is charging double what they paid 5 years ago, are you still saying buy?

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We got land three years ago and it's up 85%

 

[sure shot]

What I meant was general land value 5 years ago vs general land value now. I get that price varies by region and individual piece, but I was trying to get a general estimate from the land "experts" on here on what kind of actual increase we've had vs what people are asking for right now.

I look at a piece that's for sale and see what they are asking vs what they paid, and it's crazy. What I don't know how to do is look at what land is actually selling for right now, other than continue to watch current listings for when the actually close and update the sale online.

Actually I just found the section on beacon titled farm land sales. I'll start there.

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[8bitnes]

What I meant was general land value 5 years ago vs general land value now. I get that price varies by region and individual piece, but I was trying to get a general estimate from the land "experts" on here on what kind of actual increase we've had vs what people are asking for right now.

I look at a piece that's for sale and see what they are asking vs what they paid, and it's crazy. What I don't know how to do is look at what land is actually selling for right now, other than continue to watch current listings for when the actually close and update the sale online.

Actually I just found the section on beacon titled farm land sales. I'll start there.

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Here is a summary of expert analysis for Iowa dating back numerous decades

2023 Farmland Value Survey Iowa State University | Ag Decision Maker

www.extension.iastate.edu

You can also dig into each annual summary to get averages for 9 regions of the state and individual counties. Those are broken down even further for high quality, medium quality, and low quality ground.

Using straight statewide average, land value has increased by 63% over the past five years. Looking closer, you can also see the likelihood of a large "correction" to be very rare events with just two extended corrections occurring in the past 40+ years (2013-2016 and 1981-1986)

 

[Thinkin Rut]

Those that say buy no matter what, if the seller is charging double what they paid 5 years ago, are you still saying buy?

I certainly wouldn't buy today because of the FOMO. I can't see land having another 5-10 like the prior 5-10 years but if there was a piece that I wanted for many years or if it was next door to Skip I would. I'd guess that was a once in a lifetime run up and you'll probably have time to continue to save or rethink your plan. Might even get a short term bargain but wouldn't bet on that either. It's all about where you are financially and your job outlook.

 

[Thinkin Rut]

I was trying to get a general estimate from the land "experts" on here

That's like saying you want a general estimate of the direction of the stock market from the money channel.

 

[Windlooker]

In my neighborhood in SC Iowa, Appanoose, I bought my last piece of rec ground in 2019 for 3500/ac, today it’s 6k. Last month I bought a piece in Dallas Co, 20 ac, but it was substantially more as my house is on it and it’s located in the urban creep zone west of Des Moines. Location matters.

 

[Wi transplant]

I think of land a lot like stocks ! If you get in early you get the "big bargin" ! The older a company is and the longer its been available the less up side to buying it! If you bought land years ago at say 500 an acre and held it its up 12x approximately. But it you buy now for it to go up 12x probably not going to go to 60k acre in my lifetime! But may very well go up 5 5 to 8pct a yr which is a good investment! Say you paid 1k acre yrs ago and now want to buy more at 6k acre average it out to 3500 acre, is still a great deal right now! Plus using your own land is priceless!!! No other investment will give you that "feeling" !!!!

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[gunrunr]

One farm I bought about 20 years ago is now worth 10X what I paid and some my dad bought 50-60 years ago are worth up to 400 times what he paid.
You just never know where the market will go. Also have to factor in the 3 key variables : Location, Location and Location

 

[sure shot]

Here is a summary of expert analysis for Iowa dating back numerous decades

2023 Farmland Value Survey Iowa State University | Ag Decision Maker

www.extension.iastate.edu

You can also dig into each annual summary to get averages for 9 regions of the state and individual counties. Those are broken down even further for high quality, medium quality, and low quality ground.

Using straight statewide average, land value has increased by 63% over the past five years. Looking closer, you can also see the likelihood of a large "correction" to be very rare events with just two extended corrections occurring in the past 40+ years (2013-2016 and 1981-1986)

Thanks that's the info I was looking for.

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