Rural America has witnessed a lot of comings and goings since the 1920s. Many left — and still leave — to search for jobs and opportunities. Those who moved in since the 1970s were searching for more scenery and less stress.

The leavers tend to be young; the comers tend to be older. The leavers can’t afford to stay and buy property; the comers can. The stayers bear the weight of the change.

This demographic shift is most noticeable where the countryside is pretty, or has a moderate climate or features lifestyle amenities. The motivation for relocation is simple: metropolitan residents see a net gain for themselves, a less expensive and better quality of life out here.

Rural settings and small towns will feel more of this shift during the next decade. An August, 2009 USDA report, Baby Boom Migration and Its Impact on Rural America, by John Cromartie and Peter Nelson, suggests that if Baby Boomers follow past migration patterns, the non-metro age group 55-75 will increase by 30 percent to 14.2 million between 2010 and 2020. Boomer migrants will represent about one half the gain in this rural age group. (http://www.ers.usda.gov/publications/err79/err79.pdf)

The comers are moving to cheaper places, but they are, as a rule, not moving to the cheapest places—the high-poverty counties, the casualties of environmental sacrifice and communities with long-term economic problems like the Great Plains, Mississippi Delta and Central Appalachia.

Boomer relocation produces an uneasy layering and blending in small places. The stayers often feel besieged by the comers, taken over, occupied and left out. The comers often feel scrutinized, unappreciated, relegated to second-class citizenship and…left out.

When property is newly purchased in rural communities, the comer may be assigned baggage that doesn’t carry his name tag.

When we moved here 26 years ago, a woman, who I have yet to meet and would not know if she sat in my lap, started a rumor that we were growing dope in our pasture behind a neighbor’s barn. Patrol planes flew over for several summers. I waved. If I wanted to grow marijuana, I would not have chosen to cultivate it 50 feet behind my neighbor’s kitchen window in an open field populated with hungry cattle. Truth is a time-delayed defense against such rumors. But the bad taste lingers and still makes me angry.

Rural places, of course, are just like New York City: people talk about each other. Small places are simply more intimate. Information gets around to everyone; everyone knows what is thought to be known. After a while, everybody gets used to everybody.

In some places I’ve lived, newcomers are called “outsiders.” The slightly gentler version is “come-heres,” bestowed by the “been-heres.”

Rural communities are small places, even when they’re large in awareness. Each new face is appraised…and should be. If you’ve ever been the new kid in school, it’s like that. The scoping goes the other way too. Both sides are looking for common ground and, sometimes, reasons to be dismissive.

Each group brings its past to its present with the other. Individuals also carry their conscious and unconscious preconceptions about others, along with embedded media images, memories of earlier encounters and understandable caution.

The stayers have reason to be angry. Many have found it increasingly difficult in their home communities to make a living, buy property and keep their kids close. As sellers, they find themselves getting inflated prices for their family lands from people, who as a group, they resent selling to.

Rural real estate — with the exception of working farms — is typically priced for the metro Boomer buyer who is looking for a second home, pension-supported retirement spot or investment.

This pricing pattern exaggerates the barbell-shaped age distribution in these communities—kids and seniors at either end with a relatively few middle-agers in between. I can’t name a single young adult or couple from around here who has bought a farm in my county during the last 25 years.

Newcomers bring their knowledge, cash and needs as well as their connections. Communities can benefit from all four, especially when they’re folded into local knowledge, cash, needs and connections. The knitting takes effort.

I’ve found that small rural places are usually extremely tolerant of differences they know. Familiar strangeness is just taken as part of the neighborhood, like the blind curve on the road into town.

A newcomer’s eccentricities, however, are unfamiliar. They are grist that seems to need grinding. Many mills operate. A grain or two is produced. The milling trade works back the other way as well.

Some newcomers enter better than others.

They accept the obvious—that not much is private in a fishbowl. Anonymity evaporates. Everyone knows who the newcomer is before he knows anybody.

Newcomers are tested. It’s best to deal squarely with everybody, building a public record on the widest possible base. Sooner or later, someone will try to take advantage of your local ignorance. Nothing is gained by cooperating in snookering yourself.

Finally, everyone is improved to the extent that individuals deal as individuals with each other, not as representatives of a group with an assumed unified way of thinking and behaving. In more than three decades of living in rural communities were I was not raised, I’ve learned that all groups are a mix of people I like, people I don’t and those in between.

Metro Baby Boomers will continue to change the economics and politics of rural communities. In the worst case, they will self-segregate. In the best, they will mix around.

When communities divide between come-heres and been-heres, nothing is gained and no one benefits. Separation is the easy way, not the best way. It’s a lot harder to build bridges than to burn them.

Many would be disappointed. There were only 42,000 parcels of land available – far too few to satisfy the hopes of all those who raced for land that day. Additionally, many of the “Boomers” – those who had waited for the cannon’s boom before rushing into the land claim – found that a number of the choice plots had already been claimed by “Sooners” who had snuck into the land claim area before the race began. The impact of the land rush was immediate, transforming the land almost overnight.

Over 100 years later, we are in the midst of a second rush for land. When it is over it will go down as the greatest land rush in United States history far eclipsing the Oklahoma land rush of the 1890’s.

How will it be different? Baby Boomers, investors and institutional investment firms are preparing to buy over one-half of the useable land in the U.S. in the next ten years. Are you aware there is approximately 1.6 billion acres (Yes, billions – with a big B!) that can be bought and sold? The potential is for millions and millions of land deals in the next few years.

Just like the previous “land rush”, the demand for land it is going to transform who owns land in our country and what they are going to use it for.

In last month’s article, I wrote how Baby Boomers are buying land in all shapes, sizes and types. Let’s read what the media is saying who else is participating in this modern day rush for land:

Wall Street Journal

“Is it still possible to make money in real estate? With home prices continuing to plummet, many people have finally stopped seeing their family manse as a big bottomless bag of cash. But look beyond your front door, and you’ll find some alternative real-estate related opportunities that are holding up despite the current economic downturn including rural land. Rising food prices, demand for corn-based ethanol and a growing desire by many urbanites for a place in the country are making rural land more valuable.”

The New York Times

“The real estate market may have cooled, but investor demand may soon be heating up for at least one type of property: LAND. Some of the most attractive deals lately have come from land developers and home builders, who are divesting parcels in many parts of the country as they whittle down excess housing inventory. Even smaller landowners, facing their own financial strains, are selling off lots once meant for building.”

“The time is ripe to start looking; I haven’t seen this market in 20 years,” said Jaime Raskulinecz, a real estate investor from NJ, who wants to buy land in the hard-hit market of Cape Coral, FL. She found lots for sale on or near the water at about a third to half below their peak prices of two years ago. On a larger scale, H. Ray Alcorn Jr., an investor in VA, is picking up commercial and residential parcels after two years on the sidelines. Mostly using cash, he has bought more than 100 acres throughout Virginia this year, much of it at reduced prices, and he has options to buy more.”

www.Bloomberg.com

“…farmland is having its biggest revival in almost 30 years as demand for corn and soybeans from Asia and the ethanol industry drive commodity prices to record highs. From Iowa to South Dakota to Wyoming, gains in rural land prices have ranged from 78 percent to more than 200 percent, according to farmers and data from Farm Credit Services of America.” “TIAA-CREF, the largest U.S. manager of retirement funds, bought $340 million of farmland in seven states in December. George Washington University plans to earmark $100 million for agricultural investments during this year. “

“Farm values probably will rise at an annual rate of 6 percent to 10 percent in the next five years,” said Murray Wise, the CEO of Westchester Group Inc., manager of $550 million of global farm tracts. In comparison, the median U.S. home is forecast to gain 1.2 percent through 2010 and stay below the 2006 peak of $221,900, the Mortgage Bankers Association in Washington said.

“It’s just crazy out there right now,” said Mac Boyd, 65, a real estate broker in Arcola, IL, who has sold farms for more than three decades. “The land market has never been stronger.”

www.landflip.com, the premier land website, recently conducted a poll asking “When are you likely to purchase land?” 73% responded said they plan to purchase land in the next 12 months!

What is creating such an interest in land?

Retiring Baby Boomers – In my previous article, I documented that many Boomers are nearing retirement. Here is a snapshot of this group:

• 10,000 Boomers will retire every 24 hours!
• 17 trillion dollars are going to flow out of retirement accounts over the next two decades into the hands of Boomers.
• 1 in 4 Boomers own more than one piece of real estate.
• 1/2 of Boomers own their home free and clear.
• 60% of Boomers plan to move to a rural setting.

Since 1 in 4 Baby Boomers own more than one property, the logical conclusion is they will allocate a portion of their investment portfolio and buy land in the near future.

Baby Boomers are buying land, but most unlikely to ever move on the property

Where are Boomers going to relocate when they retire? In a poll commissioned by the National Association of Realtors, 60% plan to move to a rural area upon retirement. The operative word is PLAN. Many are in the process of purchasing small and large tracts of land all around the country to fulfill their future dream. Chances are that they will never move on to the property. Nonetheless, everyday there are more and more Boomers entering into the land arena to buy their dream property – and they are ready to buy soon!

Stock market and the drive toward buying land

As in most economic cycles, there are times when the stock market has not performed to investor’s expectations. When the stock market is doing well there is no reason for investors to look elsewhere to secure a modest return on investment. But, as we know, the stock market is mired in uncertainty. Because of this, some investors look for other investment options such as hard assets. Both individual and institutional investors are looking to land as one safe haven to relocate part of their investment portfolio. This translates that billions of dollars will be moved into land over the next few years.

As an example, the demand for hard assets appeared in FL in 2004 and 2005. In 2003 and 2004 the overall stock market results were flat. Investors were unsatisfied with the returns and began to look for investments outside the stock market. Some turned to real estate, (i.e. condos, preconstruction projects, rehabs etc.) particularly a drive to buy land. At the time, I was associated with a real estate office in rural Florida that only brokered land. By early 2005, the office received contact from a new buyer every 15 minutes! They learned investors wanted to buy for two reasons: (1) for investment and; (2) to build on the property at retirement. 80% of the buyers bought site unseen and lived far away from the property.

The brokerage (as well as many other brokers in Florida) could not keep pace with the demand as there were more buyers than sellers. So, I and a few other investors went out to coax landowners to sell their property. In the end, this one office brokered 1000’s of land deals ranging from a .25 acre to 500 acres.

The demand for land is reoccurring again but this time it is happening nationwide! Also, there are brokers reporting around the country that they have more buyers than sellers. That is a great dilemma to have! If the stock market continues to be volatile, more and more investors are going to look to land to fulfill a part of their investment needs. Some are buying land like it is a stock and betting that it will increase in value over the next 5 to 10 years and beat stock market returns.

Don’t be left behind! Be a part of the next great land rush!

When the dust settled, many walked away from the Oklahoma land rush disappointed and empty handed. Don’t sit on the sidelines any further waiting for the next opportunity. You can say to your children that you were part of THE greatest land rush in US history! There simply isn’t a better time to profit from land!

In the next few years there will be millions and millions of land transactions. I specialize in finding sellers – and you can too. The marketplace needs investors like me to find affordable land for this new generation of buyer.

Some of you are saying, “Can I really buy and sell land?” Land is by far the simplest, easiest form of real estate on the planet. Don’t be intimidated because you have never done something like this before. The marketplace desperately needs more investors to step into this once-in-a-lifetime opportunity. Won’t you join me?

Buy land. They’ve stopped making it. – Mark Twain

As featured in October 2008 issue of INVEST Magazine

Land is the place to be in 2008 and 2009

According to the USDA, there are 2.2 billion acres (yes, that’s billion with a big B!) in the United States. Of the total amount of land, 1.6 billion acres can be bought and sold. Some of you are thinking, “So what – are people really purchasing land, especially when prices for houses in many places are falling?” The answer is a resounding, YES!

In an article for LANDFLIP.com, Emily Wilson, a realtor in Shelbyville, TN (south of Nashville) was asked to comment on how land is selling in her area. She stated “acreage is selling better than homes in subdivisions in our Middle Tennessee area. We sell a lot of horse farms and high dollar properties, and them that have…still want more, but if I were depending on starter home sales for a living, I’d be crying hard times. Instead, our company sales are up $1 million over this same time last year.”

97% of the United States is designated as rural land

When most investors think of land, they think of parcels in or near the city limits. Most of these properties are zoned as commercial parcels. I don’t focus my efforts on this type of property. But rather, I pursue rural or raw land as 97% of our country is designated as such. Raw land is property that is far from existing patterns of development. Also, it has no improvements such as utilities, landscaping, drainage or buildings. It can be as small as a quarter acre or as large as thousands of acres. More than likely the parcel is on a dirt or gravel road. If one is to live on it they would have to first drill a well for water and install a septic tank on the property.

The demand for raw land is increasing all over the country like never before. One group that is buying land in this economy is:

Retiring Baby Boomers

According to a poll commissioned for the National Association of Realtors (NAR), 60% of Boomers want to retire to a rural area or small town. Also, one in four Americans born from 1946 to 1964 own more than one property, according to a survey of nearly 2,000 Boomers by Harris Interactive for NAR.

Boomers have “an almost insatiable desire for real estate,” David Lereah, the NAR’s chief economist said in a statement. They see real estate as “a way to build and protect a nest egg.”

Why vacant land? “For a lot of people, it’s a dream to have a second home, but they really can’t afford it,” says Peter Francese, founder of American Demographics magazine, who was asked by the NAR to help interpret the survey, “So, they buy a lot.”

Real estate ownership has become a key component of the Boomer’s retirement plans. The July 2008 issue of Business Week reports that “Baby Boomers are retiring at the rate of 10,000 every 24 hours …within 2 decades a record $17 trillion will change hands from corporate pension funds and 401(k) retirement plans into the hands of retirees.” This group will continue to drive a portion of their investment portfolio into real estate, specifically raw land, fueling the demand for land like never before.

For example, a developer purchased a large tract of land in Western North Carolina and divided it into 1800 parcels ranging from 1 to 6 acres. The lots range in price from $40,000 to $100,000 (depending on the size of the parcel and it’s location in the subdivision). Within one year they sold 800 parcels! The essence of their promotional campaign – buy the lot and grow your money as the property appreciates (like it is a stock). At some point the landowner will either build on the lot or sell it. They also offer an affordable monthly payment program to those who cannot pay in full. There is no “deed restriction” for this community which means the buyer is not required at ANY time to build on the property.

One of the other motivations for this generation to invest in land is that they are nervous about having all their funds in investments related to the stock market. Certainly we have seen a lot of volatility in the stock market in recent months. More and more investors are taking a portion of their investment portfolio and purchasing land. Why? The premise is – historically land has never gone down in value.

Developers are sensing this trend and shifting their strategy. In the past, a developer purchased a large tract of land near a city and then subdivided it into lots to build houses. Now they are buying land in desirable rural locations throughout the country, dividing it into smaller parcels and marketing to Boomers. As documented above, they are having great success.

Even Wal-Mart is addressing the migration to rural areas

FL and AZ are no longer the primary destinations for retirees. Retirees are looking all over the country to purchase rural land on which to retire. The core criterion for their purchase is that the parcel is within a reasonable driving distance of a Super Wal-Mart and medical care. Wal-Mart has sensed this trend and they are building many of their new stores at rural crossroads cities throughout the US – thus opening up areas of land originally thought too far from amenities and supplies.

Why is there a surge of interest to move outside the big city?

Boomers are moving to rural areas to experience the beauty, peace and serenity of the country. Unlike previous generations, they are retiring earlier and want to live where they can hike, bicycle, garden, start a horse farm or simply commune with nature. Ultimately it is to leave suburbia and its complications. It is a dream for a new start in the “second half” of their life.

I talked recently with a 50 year old investor from New York City. He has lived his most of his life in an apartment. He commutes over one hour each day to and from his office. He loves gardening but has never had a back yard to enjoy this hobby his entire adult life. He is starting to think about his retirement years. His dream is to buy a parcel of land in rural GA so that he can fulfill his yearning of having a garden and a more relaxed lifestyle. He is working hard to make that dream a reality. This is one example why those nearing retirement look at land as a part of their future.

Boomers are buying raw land in all shapes and sizes

What type of land are Boomers purchasing? Remember it is about the destination – living in a rural setting. Most envision living on a small parcel of land (20 acres or less). They don’t desire a large tract of land as their focus is living near a small town (near a Super Wal-Mart and medical care).

Ryan Folk, editor of LANDFLIP.com keeps his finger on the pulse of recent land sales. According to Mr. Folk, what is selling? He says “Small home-site/retirement tracts under 20 acres… [and] very large, beautiful farms, ranches and plantations.”

Not only are small parcels of land selling, but there is also a growing segment of Baby Boomers that are purchasing 100’s and sometimes 1000’s of acres. Many Boomers have the financial means to purchase larger tracts of land.

I was at a wedding recently and sat next to a retiring army colonel. When he learned that I educate investors on the dynamics of land, was he ever giddy! He had a dream of leaving the concrete jungle and making a new start in a relaxed, carefree setting far from the stresses of life. He recently purchased 300 acres in southern GA within a half-hour drive of a mid-size city. During his due diligence (the process of investigation, performed by an investor, into the details of a potential investment) he learned that he could subdivide the land. He plans to retire on 50 acres and then subdivide the rest in the next 5 to 10 years. This is a growing trend among those looking to retire.

How can investors profit from land?

Some of you are saying to yourself: How can I as an investor profit from land? Are there really that many land opportunities that I can get into this niche market? I have been a part of over 600 land deals. My observation is that there are millions and millions of landowners who are ready to sell. Are you surprised to learn that in some places in the country there are actually more buyers then sellers? I make a living connecting buyers and sellers. The marketplace needs more investors to get involved!

There hasn’t been a better time in our history to profit from land. Right now there aren’t enough investors to reap the rewards of profiting in vacant land real estate.

Learn to buy dirt as they are not making any more of it!

Here’s to your success in real estate.

As featured in September 2008 issue of INVEST Magazine