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Things that make me go Hmmmmm....Land Prices

JNRBRONC said:
Unless you are a day trader, IRA and land should be viewed as long term investments.


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I saw a report yesterday that said 60% of Americans are invested in the stock market. I would have guessed more.

I personally have not substantially been in the market since 2008/09... Yep, missed out on a lot of upside for sure....

Thinking about jumping in with some dollars. I know you can't time such things, but maybe wait until another 5-10% shaved off the market would be a prudent time to jump in if one isn't invested today? Maybe ladder in those dollars starting now, then every week or 2? Not sure the best approach. Will be buying something like VOO or FXAIX. Thoughts?
 
deerdown said:
I saw a report yesterday that said 60% of Americans are invested in the stock market. I would have guessed more.

I personally have not substantially been in the market since 2008/09... Yep, missed out on a lot of upside for sure....

Thinking about jumping in with some dollars. I know you can't time such things, but maybe wait until another 5-10% shaved off the market would be a prudent time to jump in if one isn't invested today? Maybe ladder in those dollars starting now, then every week or 2? Not sure the best approach. Will be buying something like VOO or FXAIX. Thoughts?
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I am a big fan of FXAIX. Like many index funds, the fees are so low that they don't really amount to anything. Most professional traders can't beat the SP500 on the long run

60% of americans are in the market from what I have read also BUT the amount of investment is HIGHLY slanted

93% of all stocks are owned by the wealthiest 10% of investors

The bottom 50% of Americans in terms of net worth only own 1% of stocks.
 
It might drop rec land prices some. My down payment was largely money I had invested in an individual brokerage account. For some that may have been socking money away into an account to use as a down payment on a farm and were getting close to maybe buying something this spring or this year (depending on how long it stays down) they may now be out of putting money down on something because they are now down thousands, so this might have a drop on rec land prices. Even if someone still has enough to put down on something and they just lost 10% the past couple days they may not want to pull the trigger on ground right now until they get their loses back or ride it out longer so they are not realizing a loss.

Deerdown-any sort of sp500 fund would be good, long term they do better than throwing a bunch of money at one individual fund. VTI, FSKAX are other commone good ones. You are buying a share of the top 500 us companies, if a company falls out of the top 500 the next is put in. Plus buying any of those funds like VTI for example you are buying shares of say apple, google, etc within that fund.
 
To me the hard part of buying land and not paying cash would be the amount you spend in interest payments. Even on a small parcel like 80 acres it's staggering what you pay in interest over a 20 year loan. It almost doubles the price you pay for the farm versus paying cash. Very poor investment in most cases except for the enjoyment you get out of using the land.
 
tall@wide said:
To me the hard part of buying land and not paying cash would be the amount you spend in interest payments. Even on a small parcel like 80 acres it's staggering what you pay in interest over a 20 year loan. It almost doubles the price you pay for the farm versus paying cash. Very poor investment in most cases except for the enjoyment you get out of using the land.
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Def not a poor investment. You get to write off all the interest, improvements, depreciate any buildings, fences, tile, etc. If filing a schedule F there's herbicide, seed, mileage going to farm, etc.... all write offs

Enjoying it all the while it appreciates in value long term.
 
Pre pay principle. Look at your amortization schedule. Pay the current months amount (principle and interest). Look ahead to the next month and write a second check for the principle only. You can’t be charged interest on pre paid principle. If one has the funds available. Will cut the mortgage life down exponentially as you’re making two payments saving all the interest on the second payment.

Keep in mind the principle is a fraction of the total payment, especially early in the loan. That does shift as you move later into the note, but it’s worth it.
 
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tall@wide said:
To me the hard part of buying land and not paying cash would be the amount you spend in interest payments. Even on a small parcel like 80 acres it's staggering what you pay in interest over a 20 year loan. It almost doubles the price you pay for the farm versus paying cash. Very poor investment in most cases except for the enjoyment you get out of using the land.
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I’ve definitely used loans (paid principal & interest) for several years in farms . In my case the income had paid a good portion of the payments. Not a full cash flow, but close.

Meanwhile it has appreciated…
 
Hardwood11 said:
I’ve definitely used loans (paid principal & interest) for several years in farms . In my case the income had paid a good portion of the payments. Not a full cash flow, but close.

Meanwhile it has appreciated…
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I've done the same, BUT, that was when land returned 5% and loan rates about the same. This market is not like then, Returns are 2-2.5% and loans are what 7-8% ?...

Makes a big difference.
 
I am in the same boat as Deerdown. I have been strongly considering buying another farm as it is an investment that I really enjoy. Seems like 2-2.5% return is a "good" recreational property these days, most are even lower than that. Even if paying cash this seems like a not so great investment. I cannot see recreational ground continuing to shoot up in value or else it will be higher than ag land at some point (given ag land may be slightly dropping).
 
Buy it. If you don’t someone else will. I’ve purchased several pieces over 23 years, my last was last October. There’s another piece I want and would buy tomorrow if it came available. Yes, I’d be extending myself. I’ll find a way.

All the blah blah about politics, rates, markets always change. Regardless it’s the best investment on the planet.
 
Windlooker said:
Buy it. If you don’t someone else will. I’ve purchased several pieces over 23 years, my last was last October. There’s another piece I want and would buy tomorrow if it came available. Yes, I’d be extending myself. I’ll find a way.

All the blah blah about politics, rates, markets always change. Regardless it’s the best investment on the planet.
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Could some of you talk to my wife for me.lol Maybe she would listen to you because every time I bring up buying another piece I have my eyes on I get beat down.
 
Hawk32 said:
Could some of you talk to my wife for me.lol Maybe she would listen to you because every time I bring up buying another piece I have my eyes on I get beat down.
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I got lucky and introduced mine to deer hunting about 8 years ago. She loves it and is a better hunter than me. It’s an easier sell lol.
 
Windlooker said:
Buy it. If you don’t someone else will. I’ve purchased several pieces over 23 years, my last was last October. There’s another piece I want and would buy tomorrow if it came available. Yes, I’d be extending myself. I’ll find a way.

All the blah blah about politics, rates, markets always change. Regardless it’s the best investment on the planet.
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The fact that someone else will buy it has no bearing on the way I make my decisions. The same can be true of anything for sale in this world, why would you base your decision based on what someone else would do? Don't let FOMO drive your decision....

I'm not looking to buy land right now. I watch the market in my area very closely, and if the right piece for me came up, I'd buy it, but not looking to buy as an investment right now. Happy with my other investment returns at the moment. Everyone is different, depends on age, what kind of investments one has and how diversified they are, how much of your assets are in land already, what's your goals, what's your health, what's for sale, what does your wife think/want, what bills you have coming for the kids education, medical bills.....There is no 1 size fits all. Do what you're comfortable with. Land is not super liquid especially if you need to get what you paid and you need it tomorrow, some other investments are easier to exit. Land has been a great investment, there are others as well.

One thing I tell my younger friends, and wish someone told me earlier, You have to invest to get ahead. That has rang true for decades, but sometimes there are ups and downs with those investments. Sometimes it's easier said than done, but to get ahead, you have to pull the trigger at some point. Good Luck
 
When I say i buy land that’s not the only area of investment. Be diverse of course. I was in a public safety job when I started. So I took 10% of my gross income and put 5% in the market and 5% to save for land. That’s where I started.

Now we’re in the market, land, rental properties and angel investing. It’s taken years and a ton of work and sacrifice, but overall it’s been worth it; with land being the most dependable without a doubt.
 
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