Large land owners

[PatinPA]

I bought a 160 fifteen years ago, then the adjoining 80 about 7 years later, then the adjoining 152 a year and a half ago. Wish I bought it all at 15 year ago prices.


That's why my farm is an 18 hour drive away. No way I could afford 1/2 of what I own if it was in NJ or a suburb of a PA city. But I'm lucky that someone wanted our business more than I did and I got to retire young enough to make that distance work.

I was talking to a friend one day about land prices and he was telling me about all the larger local farms and the people that bought them. There's one close by that's about 400 acres. His ex-inlaws bought it for $65,000 and everyone around here thought they were nuts for spending that kind of money on a farm. Another friend of mine paid $150,000 in the early 2000's for a small christmas tree farm that had a house and a large barn. I thought it was crazy how much land has gone up in 20 years but it's unbelievable how much it's gone up in the last 2 years.

 

[greekfreak]

Land prices are absurd, there is a local farm that is a contiguous 254 acres going up for sale here shortly. We are about 50 miles away from the nearest large city. Any guesses on what they want for this tract???








i.e. if you said over $2.5M you won...

 

[Kev]

Depends on the state, soil types, amount of tillable acres, marketable timber. etc. But they are seeing $$$ & probably want in excess of $6,500 .00 / acre. For what it's worth, there's 100 acres for sale near me, (central MO). The owners were asking $5,000.00/ac. 1/2 of it is cropped. Evidently no offers. It's going to auction next month.

 

[PatinPA]

Land prices are absurd, there is a local farm that is a contiguous 254 acres going up for sale here shortly. We are about 50 miles away from the nearest large city. Any guesses on what they want for this tract???








i.e. if you said over $2.5M you won...

There was a farm down the road from my property that was for sale 2 years ago. It was 253 acres. I remember being shocked that they were asking 2.1 million for it. Now that seems like a bargain.

 

[greekfreak]

There was a farm down the road from my property that was for sale 2 years ago. It was 253 acres. I remember being shocked that they were asking 2.1 million for it. Now that seems like a bargain.

What was even crazier is that they wanted that money BEFORE the grain prices went through the roof (very grateful). When it was listed, at the average price of grain, it would be in the third generations lifetime before we seen an ROI on that farm.

 

[PatinPA]

What was even crazier is that they wanted that money BEFORE the grain prices went through the roof (very grateful). When it was listed, at the average price of grain, it would be in the third generations lifetime before we seen an ROI on that farm.

I'm not a farmer but I was looking at numbers, thinking if I leased the fields and the barn and rented the house, would I even make a dent in the payment every month. Even if I leased the hunting rights I couldn't even come close. It's primarily cropland with very little wooded so very little timber value too. And the cropland is all in the flood plain for the most part. That's my biggest question is what you could lease that type of cropland for now with grain and corn prices soaring.

 

[Mortenson]

The quarter that just sold in our neighborhood for 20.1K/ac is rumored to have been bought by an investment group from Arkansas and rumored to be rented out for $700/ac next year. The 1st rumor is probably true. The 2nd one sounds a little out there, but I'm sure 500 or 600 is probably in play.

 

[Baker]

There is a 1400 acre farm for sale in very rural remote La. They want just over $14,000,000 for it . I guarantee it sells within a year or two.

It has about 300 acres [ best I remember ] fields of which a couple hundred of that can be commercial crops. The rest food plots. The timber is primarily hardwood with some planted pine. The entirety of the property is game fenced and infused with enhanced genetics. The bucks are not attractive in my opinion though big. There is a beautiful lodge on the property guessing the value around $1,000,000. IMO zero chance this property could ever pay for itself. BUT, someone will buy it for its recreational value.

I suspect if we went back 50 or 100 years ago everyone would be complaining and stunned over the price of land. 50 or 100 years from now the conversation will be the same. To me the key to real estate is to be in a position to hold it until you want to sell, not because you have yo sell.

 

[greekfreak]

The quarter that just sold in our neighborhood for 20.1K/ac is rumored to have been bought by an investment group from Arkansas and rumored to be rented out for $700/ac next year. The 1st rumor is probably true. The 2nd one sounds a little out there, but I'm sure 500 or 600 is probably in play.

I have never heard of land being leased out at the price. Typical in Ohio for farming is 200-300 dollars and acre but if you're respectful, have a name, and know the owners you could bargain it down real easy. Makes me wonder what they are leasing it for.

 

[greekfreak]

I'm not a farmer but I was looking at numbers, thinking if I leased the fields and the barn and rented the house, would I even make a dent in the payment every month. Even if I leased the hunting rights I couldn't even come close. It's primarily cropland with very little wooded so very little timber value too. And the cropland is all in the flood plain for the most part. That's my biggest question is what you could lease that type of cropland for now with grain and corn prices soaring.

These are good questions and without knowing very much as far as numbers go, I could not give you an answer as to whether or not you would make a payment with the entire property leased. My guess is you could potentially come close. You have to think, the money paid for the lease is the same money the farmer would use to pay off the field. I bet it would be closer now than it was before grain prices went to the moon.

 

[Mortenson]

I have never heard of land being leased out at the price. Typical in Ohio for farming is 200-300 dollars and acre but if you're respectful, have a name, and know the owners you could bargain it down real easy. Makes me wonder what they are leasing it for.

Probably trying to pencil 240 bushel corn at $6. Lotta gross dollars. Lotta 400-500 rent in the state being paid this year.

 

[silver_yummies]

Off topic a bit but reading some of this reminds me of this story.

My Grandpa let 80 acres of hardwoods go back to the owner as he felt that had enough woodland at the time and only wanted to buy the 60 acre open tillable field. This was in the late 70s and didn’t want to spend the extra $800 total for more woodlands!

 

[greekfreak]

Probably trying to pencil 240 bushel corn at $6. Lotta gross dollars. Lotta 400-500 rent in the state being paid this year.

I guess, is 240 an acre average down there? Not familiar with the state. I do know 240 on average up here is just not possible.

 

[Bill Loser]

The quarter that just sold in our neighborhood for 20.1K/ac is rumored to have been bought by an investment group from Arkansas and rumored to be rented out for $700/ac next year. The 1st rumor is probably true. The 2nd one sounds a little out there, but I'm sure 500 or 600 is probably in play.

$700 an acre is probably doable. There was a guy looking to lease a 40 out for 28 days of November last year for $7000. I heard they actually got it. Granted food plots were in, tower stands all in place, but $7000 for 28 days? Thats nuts.

 

[Wind Gypsy]

$700 an acre is probably doable. There was a guy looking to lease a 40 out for 28 days of November last year for $7000. I heard they actually got it. Granted food plots were in, tower stands all in place, but $7000 for 28 days? Thats nuts.

When a guy pencils in his time working on the land, material, and equipment cost (including insurance, maint, storage), property taxes and maybe loan interest, $7k doesn’t seem that out of line if one wasn’t going to hunt out of the typical rut time anyway. I’ll have way more than that into my 40 in a years time.

 

[Bill Loser]

When a guy pencils in his time working on the land, material, and equipment cost (including insurance, maint, storage), property taxes and maybe loan interest, $7k doesn’t seem that out of line if one wasn’t going to hunt out of the typical rut time anyway. I’ll have way more than that into my 40 in a years time.

$7000 for 28 days is way excessive.

 

[Triple C]

I suspect if we went back 50 or 100 years ago everyone would be complaining and stunned over the price of land. 50 or 100 years from now the conversation will be the same. To me the key to real estate is to be in a position to hold it until you want to sell, not because you have yo sell.

You hit the nail square on the head right there!

 

[Foggy47]

Old Saying: "The good thing about land is they aint making any more of it". I think this and population growth assure higher values in the long run. Simply supply and demand issues.

Keep in mind....it took until the 1880 to get the first 1 Billion people on the face of this earth (just 140 years ago). We now have over 8 Billion and growing. Fast forward a few decades and demand is only going to be more as the population grows. I cannot imagine earth 140 years from now......with 64 Billion people. Things sure won't be the same.

 

[Turkish]

There is a 1400 acre farm for sale in very rural remote La. They want just over $14,000,000 for it . I guarantee it sells within a year or two.

It has about 300 acres [ best I remember ] fields of which a couple hundred of that can be commercial crops. The rest food plots. The timber is primarily hardwood with some planted pine. The entirety of the property is game fenced and infused with enhanced genetics. The bucks are not attractive in my opinion though big. There is a beautiful lodge on the property guessing the value around $1,000,000. IMO zero chance this property could ever pay for itself. BUT, someone will buy it for its recreational value.

I suspect if we went back 50 or 100 years ago everyone would be complaining and stunned over the price of land. 50 or 100 years from now the conversation will be the same. To me the key to real estate is to be in a position to hold it until you want to sell, not because you have yo sell.

I would agree, but I think that’s because, strictly from a dollars and cents standpoint, rec land has historically underperformed other conventional investment avenues. Sure there are plenty of anecdotal exceptions. If you don’t extract immense personal satisfaction from land ownership, it’s rarely a wise financial decision.

I have big problems with the Winke approach. On the flip side, I also think the “cash only” approach has been extremely financially disadvantageous in recent history.

 

[Wind Gypsy]

Just read about Biden's "billionaire tax" where people with net worth of 100 mil plus would get hit with a 20% annual tax on UNRECOGNIZED gains. Not sure how the hell they'd assess that on land but seems land would be a possible place to park that $ if it took an exodus from stocks. Seems outrageous. No way that thing passes though.