Acreage as an Investment?

Have recently been toiling over the potential of buying some acreage (50-100-acres). Would use it as both a place to go have fun on weekends (we live in suburbs so obviously no fun allowed there) and get more functional use out of savings that will undoubtedly be used for retirement later on. In Ohio the most affordable acreage is far south, so a couple hours from me. The old adage is that land is the one thing they aren't making more of, but that doesn't necessarily make it a good investment.

Anyone gone this route?

 

It can be good and bad. Is it in an area where development will happen in the future or is it in the middle of nowhere?

Once you invest in real estate, you almost have to keep the money in it or pay taxes out the ass on it when you sell it (assuming profit made) If you plan on building on it, then it only matters to you if it’s worth it or not.

 

My best friend owns three 100+ acre sites exactly as you described. He's a savvy Wall St guy that knows how to make money.

None of these places are an investment and he's had them for over 10 years. As a matter of fact, they cost him money because you still have to do some maintenance, pay taxes etc. He bought them simply as a place for us to ride dirt bikes and shoot guns.

 

We bought a good bit of acreage 13 years ago. It wont barely sell for what we paid for it,and we've damn near payed half of what it cost to purchase it in taxes. Really depends on location. If its in an area thats about to explode,then the land would be expensive already anyways. If you can project an area that "may" expect to have big growth in the next few years,thats when its a good investment,but how do you really know?........or at least from a laymans view.

 

Raw land is rarely an investment. It's a purchase with cost of ownership. Every once in a while people get lucky and make a buck but not often. Value it accordingly. If you can lease it for some positive cash flow you'd be in a better financial position

 

If its got some farmable area you can rent it out pretty easily.

 

Location location location is all that matters for investment land wise...other than that, I don't think of land as being an investment.

 

it could be an investment if you have the right opportunities. As a few have mentioned, if you purchase land that has farming options, that can keep the taxes down as it'll be taxed as farm land vs. real estate. My family has some property in Ohio and we lease quite a bit of it to our cousins, basically covers the taxes for the year. Could probably make a bit more on the lease but it's mainly to pay the expenses. The area where the property is located is doing well, they passed a good school levy, there are some new companies moving into the area, and they are updating the infrastructure, so the property values are doing well (east side of Columbus). We did just cut some of the timber (amish family got the bid), so that helped a lot and if we decide to sell the bulk of it one day in the future, the woods aren't as thick, plus the developers don't care if there's a bunch of black walnut trees in the woods, they'll probably just clear cut most of it.

Other friends have bought property that had some decent timber on it, but you are talking a few years to many years before that will come to fruition. Mainly they wanted it for camping and hunting, the lumber leases were just a bonus, and if development keeps moving outside of Atlanta, it's right off a major freeway, and might appreciate more.

 

totally depends :
1) if you know know something others don't, such as a toll road, or development heads your way, or some other thing that will affect land prices positively. ... or 2) you just get lucky and #1 just happens.
To just say "is land a good investment", it's all about location (as has been pointed out by others). if already desirable, it will be expensive. If not currently very desirable, how long can you wait for the land cost to improve to the point you make the return you hoped for. but if you like that area, and are considering building a house or whatever in future, don't worry about it rising a ton in value.

 

And the melk man knows a thing or two about re investing...

 

But the land. Build as many houses and hotels on it as possible, then wait.

 

Also being in Ohio, i look at places like Richfield and wish i’d Bought acreage there.

I think you have to be content with essentially breaking even on the land sale, but you can hope to speculate as to what will blow up and be worth developing.

I used to off-road jeeps on property that is probably worth triple what the owners paid. That was 20 years ago.

 

I don't mean to sound jaded, but the days of finding acreage as an investment have gone the way of finding a Cobra in a barn.

With the ease of finding and plotting land on the internet, anything worth a quick turnaround has been snapped up by real estate development corporations.

Yes , there are exceptions but rare. Now if it's something you want to pass on to family, it might be worth it. And enjoy the hell out of the place while your around.

 

Maybe thinking of it as an investment is a bad idea, but spending money on something for fun that might allow me to get some of the spend back some day is appealing. I'm not planning to build on it, but just to have for camping, shooting, dirt bikes, etc. Most other hobbies are just straight spend, you'll never see those dollars again.

Also, aren't there some tax benefits, i.e. mortgage interest deductions on property?

 

I own 200 soon to be 450 acres, mine make money yearly but you have to plant stuff (legal crops folks).

I have some other misc pieces of non farm land, but as stated above that’s not what I’d hedge retirement on.

 

I'm about to list some acreage I bought from the HUD auction in 2009. I'll make money on it but not a lot considering taxes and some maintenance. I did get to use it for some fun stuff in the meantime. I would have made considerably more money if I had put that money in the stock market. If I had paid anywhere near normal retail it would have been a big financial loss over the same 10 year period. If you buy tillable land, the cash rent is a pathetically low ROI (think bank CD levels).

Summary- only buy land if you want land. Don't buy it as an investment.

 

It never hurts to own some empty land just in case you accidentally kill someone.

 

Old guys are scary.

 

I like to think of it as practical.