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Farm/ ranch land investment

Marshian

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I am toying with the idea of buying some farm or ranch land (between 100 and 500) acres partially as an investment but also to to hunt on. I attended a farm seminar put on by MSU and a saw that rural land costs roughly $1000/ acre and if I cash lease this out to a farmer my return on a cash lease will be roughly $20/ acre which is a quite poor 2% return and doesn't even include property taxes or maintenance. When I asked the speaker about this, he said the only way to make the numbers work is if you are sure the land itself will increase in value enough over the next 10-20 years and that the resell is where I may make a profit. It does seem really nice to own some land, but I not sure if rural land will overall outdo the stock market. Anyone have any thoughts or experience with this? Thanks.
 
I think you got some sound advice there. Also, I'd look at the water tied to the land, mineral rights, and easments. Knowing details about them can help in making a good decision.
 
I could do with just one acre. Just as long as that held a complete t-Rex skeleton and I owned the Dino rights. Then I could sell it and buy lots of acres.

It's all about pivot lines and ground blinds : )
 
Paying $500,000 for a place to hunt sounds pretty expensive. Keep it 20 years and that's $25,000/yr.. You could hunt Africa every year for less than that. If you could trust the real estate market it would make a good investment. I've got three houses I had planned to sell and retire for good, but one is under water and one is worth what I paid for it, and the third is only worth a little more than what I paid for it. What seemed like a great plan in the beginning has not panned out.

You've got lots of things to consider. Like your age, and the likelyhood you could sell the property when you want to, what's going to happen to the ground around yours during the next 20 years.

Its a big decision.
 
$20 per acre? Never knew it was that small of an amount. I'd ask for hunting rights on the farmers' properties in exchange for farming rights on my property if it was that bad of a return. That way you at least have a few hunting options for that big of an investment. Assuming you don't mind forking over that kind of money for just hunting and hoping years down the road you make a profit. Another thing you "might" be able to do is lease out the hunting rights on the property. I know you said you want it to hunt too, so you can have that in a lease agreement were you get to take X amount of animals. Not sure what hunting leases go for out were you're at but in MO it can be anywhere from $2000-3000 for a 100 acre farm up to 10k+ for a larger farm. Then you still trade the farming rights for hunting rights on the farmers land and you still have a place to hunt or just do the lease w/the farmer for $20 per acre to add onto what you're already getting from the lease. Again this is assuming there is a demand for a hunting lease in that area.
 
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My personal experience with real estate(not rural) is buy it cheap, and sell it as fast as you can for profit. I'm talking 2-3 months max.

Carrying costs add up fast, and it's easy to run out of actual money. Even though your net worth(on paper)is slowly growing.
 
My personal experience with real estate(not rural) is buy it cheap, and sell it as fast as you can for profit. I'm talking 2-3 months max.

Carrying costs add up fast, and it's easy to run out of actual money. Even though your net worth(on paper)is slowly growing.

I'm fairly confident that Mr. Marshian is looking for long term holding as a recreation being the immediate benefit, with resale as a byproduct down the road 10 - 20 years.
 
Agriculture land in Kansas is at an all time high and at currentrates for the recreational buyer" or even farm or rancher can not make money on the land. Oil and gas speculation is driving a lot of it as well as foreign investment.

I would be afraid to buy any land here for "investment" unless I purely wanted for my own recreational value.
 

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