Why Buy Land Now?

Today’s post will conclude the series about the current state of the land market, taken from an article written by Robert King. This particular entry focuses on the types of land that people are buying right now, and what land investors should be looking for. Happy land hunting!

What general trends exist in the land market today?

Buyers are looking for properties that they can use for recreation, and justify with investment numbers. Timberland investments seem to fit the category well. There are a number of possible streams of income from timberland. The obvious is the growth and harvest of timber. Of growing popularity is the possibility of selling carbon credits that one would own by investing in timberland. “Going Green” is finally reaching our capitalistic system. Companies that are major carbon emitters will soon be buying these credits so that they can continue to operate. Forest lands are great at sequestering carbon (binding up from the atmosphere), which is what the carbon credits are actually for.

Timberland properties can also bring income from hunting lease rents and from appreciation in land value. For all of these reasons and more, timber properties that are for sale have gotten much more attention than in the past. Farm land and farms for sale have gotten more attention of late as well. Again, that has a correlation with the potential of multiple streams of income from owning a property.

Many of the Baby Boomers are still looking to get back to the farm. Some are looking to invest in something more stable than the volatile stock market. Farm land provides the potential for traditional farm income from the production of commodities. Many are looking for farms to support their lifestyle by growing more wholesome foods. They are more comfortable with the growing conditions and methods used to grow these foods on their own “natural” or “green” farm. For this reason, I have seen an uptick in the interest in rowcrop land.

Development land has gotten considerably slower. Some would argue that the market does not even exist today, and I guess that in some localized areas it probably does not. However we do still have local markets that are strong. The areas right around large universities and areas around communities with a large government influence are prime in today’s market. Plus, we still have some enterprising Americans that are willing to take the long-view of the market and know that buys made in today’s market will pay dividends when the market comes back up…and it will.

There are still many opportunities in today’s land market for the savy investor to make money. Timberland seems to be one of the safest investments that one could make in terms of holding on to purchasing power. I will explore the difference in nominal, dollar values, and purchasing power in another post. This is a key element in why investors should be looking to land as an investment.