Make Money with Land
- Thread starter Oleo
- Start date
I second the assessment that this probably isn’t the best time to try and flip… prices are pretty elevated, right now, and I don’t think the interest rates will have stayed high long enough to pull the over-valuation out of the market. Unless you get a REALLY good deal, I would worry about getting stuck with a piece that you I tended to move quickly. If you are okay holding for several years in case the market turns, that would mitigate your risk quite a bit.
What you describe is my dream job… in fact, I have thought a lot about “retiring” from my job when I am eligible to do so and retain my travel benefits… (airline, age plus years of service determines eligibility) with the intention of rolling my 401K into land and/or rental property investment.
Preferably land… with some equipment to go along with it.
Find a cheap piece in rough shape, or without access. Work to gain access, throw a foot fence around it, select cut timber, build some food plots, throw a building on it, put a driveway in, hunt it the couple or few years it takes to do it…. And sell for a hefty gain.
My wife is too risk averse, though. I doubt she could ever be comfortable with us risking so much.
Edit:
From a few people in my general area that are doing something similar… I have noticed that, if you are focusing on re-selling for hunting land, trail camera pics of nice bucks REALLY help move a property when used in a listing.
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What you describe is my dream job… in fact, I have thought a lot about “retiring” from my job when I am eligible to do so and retain my travel benefits… (airline, age plus years of service determines eligibility) with the intention of rolling my 401K into land and/or rental property investment.
Preferably land… with some equipment to go along with it.
Find a cheap piece in rough shape, or without access. Work to gain access, throw a foot fence around it, select cut timber, build some food plots, throw a building on it, put a driveway in, hunt it the couple or few years it takes to do it…. And sell for a hefty gain.
My wife is too risk averse, though. I doubt she could ever be comfortable with us risking so much.
Edit:
From a few people in my general area that are doing something similar… I have noticed that, if you are focusing on re-selling for hunting land, trail camera pics of nice bucks REALLY help move a property when used in a listing.
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bigboreblr
5 year old buck +
properties vary wildly. Whats attractive about this 70 acres, what is not. Partial subdividing can make short turn around profits.
Pro's. Does the land have large open tracts. Attractive water features? Is ready to be logged maturity wise?
Con's. Mineral rights? Other Easements. Wetlands? Failed perk test? Proximity to negative features, like highways, railroads, other right or ways, town dumps. Neighboring state land.
Town has zoning?
Pro's. Does the land have large open tracts. Attractive water features? Is ready to be logged maturity wise?
Con's. Mineral rights? Other Easements. Wetlands? Failed perk test? Proximity to negative features, like highways, railroads, other right or ways, town dumps. Neighboring state land.
Town has zoning?
Hoytvectrix
5 year old buck +
Check out the The Land Podcast. I think it is the best resource out there right now if you are interested in buying/selling land.
Personally, something feels off for me to buy land for the sole purpose of selling it at a profit (especially with not making any efforts for habitat improvements during the process). I don't judge other people who do this, but I don't really want to take part.
With that said, your best opportunity at ever making a profit will not come from the habitat improvements you make. It will come from buying it at a discount and holding for appreciation. The best way of buying something at a discount is knowing inside information or purchasing properties before they hit the market. The best way of doing that is really knowing an area and then sticking to what you know.
Personally, something feels off for me to buy land for the sole purpose of selling it at a profit (especially with not making any efforts for habitat improvements during the process). I don't judge other people who do this, but I don't really want to take part.
With that said, your best opportunity at ever making a profit will not come from the habitat improvements you make. It will come from buying it at a discount and holding for appreciation. The best way of buying something at a discount is knowing inside information or purchasing properties before they hit the market. The best way of doing that is really knowing an area and then sticking to what you know.
Counterpoint is the notion that if rates drop more than a tiny bit later this year, prices may jump again.
I forgot to mention that podcast. It’s good too. And I agree with your sentiment about flipping land not aligning with other habitat and development interests. I agree. But even the podcast has affirmed for me that buying and holding is good for a very modest, but reliable, return over history. The money (if there is any) is in finding, buying undervalued land. And it’s way easier said than done. Last week’s guest was a good one, covering that very topic.
Tree Spud
5 year old buck +
I think folks who think they are going to find undervalued land running more with the hype than with reality. The only 2 times I was able to buy land at a good below market price (>20% off a list price) was from a neighbor. I knew the properties well and bought with cash and very few contingencies.
I've watched real estate for 30 years now other than the 2 deals above, it really comes down to knowing market you are in very well, and then buying at the right point of the cycle where you are not over paying and can let time/appreciation go to work.
There are 2 farms down the road from me and one is 95 acres with 60 in ag, some good hunting, a house and a large old barn. The other is 105 acres with 70 acres ag, a nice rustic cabin with elec/water/sewer, some good hunting. Both are listed at over $1 million. The inventory on rec & ag land is the lowest i have seen around here.
I think rec & ag land are at premium prices, but they just seem to be going higher. I am not sure interest rates coming down will effect them much as buyers who are buying those types of properties tend to be cash buyers.
A lot of investment firm type real estate companies are jumping in and buying residential vacation, rec, & ag properties as they believe the market is under valued. Hard to compete with those dudes.
I've watched real estate for 30 years now other than the 2 deals above, it really comes down to knowing market you are in very well, and then buying at the right point of the cycle where you are not over paying and can let time/appreciation go to work.
There are 2 farms down the road from me and one is 95 acres with 60 in ag, some good hunting, a house and a large old barn. The other is 105 acres with 70 acres ag, a nice rustic cabin with elec/water/sewer, some good hunting. Both are listed at over $1 million. The inventory on rec & ag land is the lowest i have seen around here.
I think rec & ag land are at premium prices, but they just seem to be going higher. I am not sure interest rates coming down will effect them much as buyers who are buying those types of properties tend to be cash buyers.
A lot of investment firm type real estate companies are jumping in and buying residential vacation, rec, & ag properties as they believe the market is under valued. Hard to compete with those dudes.
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Spike_Horn_Shooter
5 year old buck +
Jake is one of the best I’ve talked to in the industry. The rest of them seem like self centered hollier than you “public land killers” with private land corn feeders.
100% Jake has some great guests and is a fantastic interviewer.
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Triple C
5 year old buck +
My problem is I can’t ever seem to want to sell any land I’ve bought. Maybe my kids will when I’m gone. The golden era of buying and flipping land was Buying pre-Covid, 2011 thru 2019, and selling during and post Covid up thru Spring of 2023. Sales have slowed drastically in the southeast. Folks that need to borrow money can’t afford the carrying charge and folks flush with cash ain’t turning it loose on land, thinking that land prices will begin to drop; particularly recreational land.
I understand that. I believe there are still opportunities like the pre-covid ones you mention, just like pre-covid there were some stupid great deals among all the good ones.
I’m a lot more confident in my ability to spot land deals (though few) than stock deals.
Hoytvectrix
5 year old buck +
The speed at which farms are selling has definitely slowed down. I have been following a few farms near our counties in MO and it is surprising how long some have stayed on the market. The prices haven't changed but they are definitely staying on the market more now than in the previous two years. It isn't really surprising based on current interest rates.
I think if rates come down this year (as they are expected to), land will start moving again. Right now might be one of the better times to find deals.
I think if rates come down this year (as they are expected to), land will start moving again. Right now might be one of the better times to find deals.
Tree Spud
5 year old buck +
Keep in mind that covid changed & expanded the type of buyers for recreational land. It's not just hunters, but all the back to nature group that were looking to escape the cities. Then there are all the hobby farmers, extract producers for soaps & essential oils, off the grid types, etc., etc.
That's one of the reasons for the current state of rec land, more buyers than sellers. I know about 7-8 years ago the Whitetail property folks led the charge in driving up listing prices. I started seeing properties they listed at 20-30% above what you felt the area comps were at. Now all realtors are doing the same thing.
There is an old saying that money never goes the same direction always. Increasing mortgage rates may cause some to consider selling their property, but if they overpaid initially, how do they get out from under that?
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Triple C
5 year old buck +
Same here on the stock picking. Currently on side lines here in GA on land other that what I have. Next 90 days will be interesting to see if asking prices on parcels start dropping.
Triple C
5 year old buck +
Spot on! Covid was bad enough at driving up land prices as folks wanted to escape to a bug-out place. Then came the urban civil unrest following the George Floyd saga. When it happened in ATL, a run on recreational land of any size within 2 hrs of ATL occurred with folks paying over listing price. As of today, land prices have not abated. However, I’m seeing more and more land sit without a sold sign on it.
Add to this that many land finance deals are done with adjustable rates. Imagine buying land in 2021 at 4% that rapidly moves to 8% and higher? I don’t think it will ever reset to pre-Covid. Those days are long gone. But in my part of the world, I do expect to see prices drop. Clearcut recreational land with no improvements was $1200 an acre in 2019. Today it is north of $2800 an acre for clearcut! Can’t see any scenario where this is sustainable.
Bszweda
5 year old buck +
I think to find a great deal you need to find a distressed seller ( death, divorce, or job loss) or an incompetent realtor. Another is finding hidden value ( timber ,VRBO, sub divide - special place, etc) Check land sites daily & and have your finances in order ready to go as the good deals don't last. My property right now gives me a 2.5 % return yearly with crp payments. I could lease hunting rights but at that point I'd be better off in the stock market. Too me it's a win / win situation getting to enjoy the asset while making a little bit of money. The Internet drove the hunting land prices through the roof as now your competing with folks that have highly disposable income from the cities. These podcast make it sound like making money off properties is easy. If it was easy everybody would be doing it.
Tree Spud
5 year old buck +
^^^ Yep!
And if prices do drop and you have over paid, how are you gonna break even when mortgage is higher than sell price and you are in an upside down mortgage situation?
The only little trick I’ve found, and I won’t go so far as to say I’ve even capitalized on it yet, is the incompetent realtor part.
Hoytvectrix
5 year old buck +
What kind of blows my mind with realtors is that they are showing a $950,000 listing and have twenty half-assed photos with almost no description of the property or the neighborhood. They are not exactly doing their clients any favors.
