Why (and How) to Invest in the U.S. Land Market
There are 2.3 billion acres of land in the United States. Do you have your piece of it?
Land continues to be one of the strongest and most trusted investments available, with interest rates at a historically low level and massive spikes in consumer confidence. Driving the nation’s current demand in land purchases is a range of variables that all signify there’s never been a better time to invest. These include such factors as an increased desire for new developments, a nationwide construction boom, and strong lumber price futures.
The outlier in the conversation about land real estate is farm land, which accounts for 54% of total land usage in the country. While agriculture and related industries contribute at least $985 billion to the U.S. GDP every year, much of the interest in land development today is centered in metro and urban areas. But times are changing, and the trend toward interest in ag-land is an inevitability of our evolving real estate landscape.
Agricultural land has a lot to offer, particularly for those smart investors who continue to trust in its value. U.S. farm real estate values are up 2.3% ($70 per acre) from 2016 values, averaging $3,080 per acre in 2017. U.S. cropland has remained unchanged at $4,090 per acre, while pasture value has increased 1.5% ($20 per acre).
Driving these value increases is the limited amount of high-quality agricultural land for sale, as well as the growing demand for recreational land, rural home sites, and development plots as individuals get priced out of cities and move further away from metro areas.
There will always be a demand for agricultural land, whether for the products it supplies or the sheer expanse of potential afforded by such large parcels. In a world fraught with financial instability, land—especially farm land—promises a safe haven asset with more opportunity than risk.
For those looking to invest in ag-land for the sole purpose of farming, it’s important to keep an eye on not just where the good land investments are, but what the good product investments are. Corn, wheat, soybeans, and cotton are all seeing steady growth, as are livestock, in particular poultry and swine.
Purchasing land as part of a diversified real estate portfolio is an almost guaranteed way to build sustainable profit. The exact potential of your investment depends on what type of land you buy, where it’s located, and what you intend to use it for. Plan smartly, keeping in mind both current and expected land trends, and secure your own piece of this nation’s expansive acreage.
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