Genesis 2, 7-9

And the Lord God formed man of the dust of the ground, and breathed into his nostrils the breath of life; and man became a living soul.  And the Lord God planted a garden eastward in Eden; and there he put the man whom he had formed.  And out of the ground made the Lord God to grow every tree that is pleasant to the sight, and good for food; the tree of life also in the midst of the garden, and the tree of knowledge of good and evil.

A little more knowledge about the mechanics of why people who invest in land tend to be wealthier over time…

Land is a very effective hedge.  A hedge is something that protects something of value.  In the case of land investing, it hedges against loss of purchasing power.  When one has gathered purchasing power, they tend to want to keep that power, and investing in land gives them a vehicle to do just that.  Investments in commodity-producing land, land that is only valued for it’s ability to produce a commodity, generally does that.  It protects the real value of the purchasing power that it takes to own the land.  Real value is the purchasing power that owning an asset gives its owner.  Land generally does this while producing income from the production of the commodity.  As a society, we tend to think of our purchasing power in monetary units…dollars, euros, yen…  Monetary units are not purchasing power.  These units simply represent the purchasing power that an asset currently has.  This is the nominal value.  The value of an asset expressed in a monetary unit.  Hedges protect real value.  Effective hedges, such has land, protect purchasing power against inflation and deflation.

Wikipedia – Real versus nominal value – http://en.wikipedia.org/wiki/Real_versus_nominal_value_(economics)

For example…

In 1975 Mr. Brown had $12,000.  This $12,000 represented enough purchasing power for him to buy a new car for his wife, a new pickup for him, a new tractor for the farm, and a small fishing boat, or he could buy 60 Acres of Timberland in Clay County, Alabama that was for sale and joined US Forest Service owned land in the Talladega National Forest.   Mr. Brown had to decide which to spend his money on.  Mr. Brown was still young, just 30 years old, but he knew he needed to be thinking about financial security for him and his young family.  He decided to buy the 60 Acres of timber land and forego buying any of the other things for the time being.  He really wanted the new car and the new pickup, but the ones they had were paid for and still in good working order.  He did not really need the fishing boat and he could get by with the tractor his dad had given him several years before.  The 60 Acres of timberland had just been cut about one year previous, and the seller was willing to have the trees replanted.  The land had frontage on a county dirt road, and was well away from any houses.  He reasoned that he could use the property to teach his children to enjoy the outdoors…maybe hunt the land, and fish the pond that he thought he might build on it some day.  He negotiated with the seller, and walked away from closing with a property that was newly planted in pine trees, and $1,000 left over to build that pond he was thinking of.  There was a nice little stream on the back of the property that was situated just right for a small dam and a small 1 acre pond.  10 years pass.  In that time, Mr. Brown and his son have hunted on the property every year.   His daugther grew to absolutely love fishing in that pond.  Mr. Brown’s wife liked that he was no longer spending money to be a part of that hunting club anymore too.   It was valuable time that Mr. Brown was able to spend with his children there.  Much more valuable than any of the things he could have bought with the $12,000.  In that 10 years the trees had gotten much larger.  It would soon be time to thin the stand to reap a little of the benefits of timberland ownership.  He waited another year for the pulp market to reach a peak and then sold 1/3 of the timber on the 60 acres.  He sold the timber for enough to finally buy that new tractor he had wanted.  Another 10 years go by…its now 1995.  Both of Mr. Brown’s children are now in college.  His son took a nice 8-point buck on the property when he was 16 and his daughter still loves spending time with her dad down by the pond at the ”old woods place”.  Mr. Brown knows that it’s time to cut the timber and start the process over again, and he sure could use the money to help fund college expenses.  He sells the timber, except for 5 acres around the pond, and  gets enough to pay for his childrens college tuition.  He has to scrape together a little money to replant the timber, but he looks back and figures it is a good investment to do so.  A few years later, Mr. Brown gets a call from a local real estate agent.  The agent tells him that he has someone looking to spend about $100,000 to buy a hunting / timber property.  Mr. Brown’s seemed to fit what the buyer was looking for.   Mr. Brown told the agent he wanted to think about it for a day or two, and get back with him.  Mr. Brown went down to the place and looked at his young, growing investments.  He looked at the pond, and the small field where his son missed his first deer.  Then he though about what that $100,000 would buy him…the purchasing power that owning that land gave him.  He reasoned that for $100,000 he could buy a new car for his wife, a new pickup for him, a new tractor so that he could give his to his son, and a fairly nice fishing boat.  On his way back home, he thought about what other things that investment had provided him with through the years.  Money for that now aging tractor, money for his children’s college education, time spent with his family that no amount of money could buy.  And he reasoned that he had gotten all of that and the land was still worth, in real value,  about the same amount since he could still buy the same things with that purchasing power.  So he promptly called the agent back when he got home, and told him that there was no way that $100,000 would ever come close to the true value of the property.  He went on to say that he was going to keep the property to give it to his children, so that they could reap the benefits of it’s true value.

Mr. Brown took $12,000 dollars in 1975, that would have bought many things for him and invested it in land.  He reaped both economic and non-economic values from the investment during his ownership of the investment, and still had the same amount of purchasing power 25 years later.  This is not a far-fetched example.  This does happen.  Land was an effective hedge for Mr. Brown.  It protected his purchasing power, the real value.  He learned that the nominal value of $12,000 in 1975 was about the same in terms of real value as $100,000 was in 2000.  He learned that the true value could not be expressed in 1975 dollars or in 2000 dollars.  He did all of this while being a good steward of what God created and of what sustains him.

Types of Land:
Land has many purposes. As a provider of food, you have agriculture land. For wood products, you have forest land. Mining land provides minerals and metals. Parks and Land Preserves provide habitat for all living things. Recreational land provides for human pleasures and exploration. Ranch and pasture land provides grazing for animals. Rural land provide for less dense living. Urban land supports commercial, home, and limited recreational usage.

Land as an investment:
There are many types of land investments. In fact, all land acquisitions are investments whether held for a short time or extended periods or even generations. Every real estate investment always starts with land whether you were involved with the land or are now involved with the bricks. ALL structures have a foundation on land.

Land is constantly increasing in value driven by the ever increasing world population. Population growth creates a constant demand for new development, more agriculture products, more timber, steal, oil, minerals, etc. But land that has the most demand is development land for homes, businesses, schools, recreation, and other population demands.

Learning how to identify these areas can be obtained by observation, inquiries, and knowledge of future growth patterns. Land development creates trends and trends can be followed. For example: new industry creates retail which creates housing. Watching where new industrial sites are being planned may help identify such land that may have future potential. Investing in land outside an urban area where new highways, infrastructure, and annexation, are planned could be an indicator of potentially higher land prices in the future. W.C Fields said: “If you know where the people are going, get there before they do”. The earlier you invest into land, the more you will be rewarded at a later time. Building good strategies and a little risk can be very rewarding. Do not forget your Land Pro contact. They will help make your investment decisions easier.

Land vs. Residential investments:
Buying an investment home can have a lot of strings attached. Rehabbing and workmanship issues, termites, radon gas, lead based paint, etc. (Now rented, tenants issues like fix this, sorry I am late on my rent and then try and get them out and hope they did not destroy the place.) What happens when the economy takes a severe downturn and you are unable to rent the property? Those mortgage payments are still due.

Land has no tenants, no maintenance, no complaints, only the pleasure of walking upon it and watching it grow in value. Waiting for that anticipated phone call when a developer says, “I want to buy your land!”

Land stabilizes in value during downturns in the economy. Residential development increases when interest rates decrease. Land also enjoys increases in value during an upward trend in the market, but when the market declines in real value and home values decline, land stabilizes. Land is driven not by economic pressures, but by population growth. The ever increasing population keeps constant pressure on the need for more developable land. When the interest rates decline, the gates are open for more development and the pent up supply of land is now in higher demand.

Financing Land:
Money lending is a calculated risk. Home mortgages have lower interest rates due to the fact that the lending industry feels if you have a home mortgage, you will probably get up everyday, go to work and make your mortgage payment on time; probably because you sleep there.

Vacant land loans carry more risk. The assumption is that you do not sleep there and will make your home mortgage before you would make your land mortgage if you were positioned to make a choice. Therefore, you will usually see about a 2% higher interest for a land loan as opposed to a traditional 30 year fixed mortgage.

Farm Credit, “The Land Bank” down payment requirements for land are 15% down, and will usually only extend no more that a 20 year term mortgage. Other lending sources may require more down payment and have shorter terms.

Any real estate that has five or more acres is considered “non-conforming” in the mortgage industry nationwide. The mortgage industry prefers bricks and less land. Depending on your goals, you can tie up a lot of assets with little cash. Consider investing money in Wall Street and you call up your broker and say, “I would like to buy $100,000.00 in stock and will pay 15% down.” If you have short range goals, you may want to fully leverage your land purchase. If you have further long range goals, you may want to pay cash or finance less. “Time value of money” will make that decision clearer.

“Highest & Best” Use of Land:
What you see is not necessarily what you get. A simple example is you purchase 10 acres of land for $50,000.00. This bounty has lots of state road frontage and lays well. The county “Sub-Division” laws say you may subdivide land into one acre tracts or 43,560 square feet lots. The average lot in this market is selling for $15,000.00 per one acre lot. Is the investment worth $50,000.00 or $150,000.00?

Learning how to recognize the potential of a tract of land is very important. Reviewing and understanding the “Sub-division laws” a must read. Knowing how to play the game starts with that affidavit.

The Out Strategy for Land:
Land is as liquid as any other type of real estate despite what the critiques say. Entering into a land investment should not be callus. If you plan to purchase ten rental properties or light commercial warehouse space, you probably spend a lot of time analyzing that investment. Land is no different. Good initial planning for the use of the land, observing the market trends, holding ability and “Highest & Best” use plan will strengthen your position.

Using the example above, a bail out strategy may be selling off two lots now at a lower anticipated price and maintaining the balance of the inventory until the market turns. Auctions which are a quick, usually 30 day close, may be one approach. Subordination can be another way to speed up your return. The initial research and planning are as important in land investments as they are with any other type of real estate investment.

Gloria had asked me to share my research with our RLI members and with great pleasure I will comply. Today when I was composing my response to her I realized how important this assignment was.

For fifteen years and I have been in the Land Brokerage business, and offend wondered why there has not been more attention paid to Land. I guess that because it is so common to us all that we just pass it by, not realizing that Land is what feeds us, cloths us, houses us and provides all the resources of life.

In my research, I ran across an anonymous statement years ago entitled “Who Am I?” that spoke to my heart and expanded my understanding and appreciation for Land.

Anonymous: Who Am I?

I am the basis of all wealth, the heritage of the wise, the thrifty and prudent.

I am the poor person’s joy and comfort, the rich person’s prize, the right hand of capital, the silent partner of thousands of successful people.

I am solace of the widow, the comfort of old age, the cornerstone of security against misfortune and want. I am handed down through generations, as a possession of great value.

I am the choicest fruit of labor, the safest collateral and yet I am humble. I stand before every person bidding them to know me for what I am and asking them to possess me.

I am quietly growing in value through countless days. Though I might seem dormant, my worth increases, never falling, never ceasing. Time is my aid and the ever increasing population adds to my gain. I defy fire and the elements, for they cannot destroy me.

My possessors learn to believe in me and invariable they become envied by those that have passed me by. While all other things wither and decay, I alone survive. The centuries find me younger, always increasing in strength. All oil and minerals come from me. I am the producer of food, building materials and the home to every living thing. I serve as the foundation for homes, factories, banks and stores.

I have not been produced for millions of years yet, I am so common that thousands, unthinking and unknowingly, pass be by.

Who Am I? “I Am Land
Anonymous

In this statement, the author mentions the values of Land several times. In the first paragraph it states “I am the basis of all wealth…” The second paragraph states “I am…the right hand of capital…” The third paragraph “I am…the cornerstone of security… handed down through generations, as a possession of great wealth.” The forth paragraph states “I am quietly growing in value…my worth increases…”

Writing to Gloria, I commented to her about the current state of our economy pointing out that for years I have advocated diversifying investment portfolios to include Land holdings because of it historic stability and ever increasing value. During our resent and current debacle in Wall Street, as everyone and I do mean everyone watches their investment portfolios diminish, those who are wisely holding Land investments have not lost a dime. Land prices during downturns usually stabilize and hold there value during the financial storm.

Several of my investors have contacted me in the past several months thanking me for advising them to diversify their 401K, Sep Plans and Trust Accounts into Land holdings. On the other side of the coin, I have had even more potential clients that would not commit to Land Investments contact me saying that they wished they had diversified their holdings into Land holding before they lost most of their investment money.

My current position on Land investments is IT IS NOT TO LATE!!! There are tremendous opportunities out there right now, today! Land is the safest investment and usually requires little or no maintenance.

What should you do? First, I strongly recommend that you source a member of the Realtors® Land Institute. See  on this site, one of the top three tabs will say “Find a Land Consultant”. Look for a RLI member in your market area, preferably an Accredited Land Consultant. If you can not find one, contact me below and I will help you. Accredited Land Consultants have completed the rigorous class requirements and have preformed millions of dollars in Land sales.

It is true but unfortunate that when we go to real estate school to obtain our licenses for 160 plus hours of classroom instruction, that the real estate schools throughout the country do not teach anything of value about Land, commercial real estate, property management as so on. Just because a person has a real estate licenses, it does not assure you they have the experience or knowledge to provide the services that a Land Broker with experience can provide. Land investment is like any other investment, in that, you do not want to work with someone who has training wheels.

It was this: I was warm and dry, fed and watered. I did not fear a knock at my door and a one-way trip to jail. Since I have a long and undistinguished record of hostility to power in many forms, maybe I’m just too old to bother with anymore.

Had I been born in most other countries, I would probably have found myself as a left-wing opponent of a right-wing dictatorship or a right-wing opponent of a left-wing dictatorship. My fate would have been the same unpleasantness in either case.

I’ve had a long, blemished tussle with authority acting arbitrarily. I attribute this to poor breeding and too much early Bob Dylan on my part along with bad rulings by bad rulers on authority’s part.

So why was I feeling pretty safe in my own mortgaged home on my own mortgaged land?

One reason, of course, is that America has managed to muddle through for more than two centuries without either turning toward dictatorship or allowing a dictator to take over. Our generals don’t seize power.

The other reason is that we have fought several necessary wars to defend our land and our muddling ways. The best example is WW II.

Had Imperial Japan and Nazi Germany occupied the United States in 1945 instead of the other way around, Americans would have been shipped off, “disappeared” and killed by the millions. This was Japan’s pattern in China and Southeast Asia, and it was the Nazi way in every occupied territory. Both regimes believed they had the right to take lands and enslave their inhabitants.

WW II was a fight over lands and the ideas that would run them. Both dictatorships wanted more land and resources for their people, and less for others. The desire to exploit the lands of others motivated both regimes.

Control of land and resources is a root cause of most wars—ideology is often more the rationale du jour. Land is the motivation common to every leader wanting to extend control from Alexander, Caesar and Attila to Jefferson, Polk, Hitler and Stalin.

When Americans have defended our land, it has brought out the best in us. We’ve succeeded in that defense, which allows most of us to sleep without fear of political arrest, imprisonment without trial and execution at a mass grave.

When we acquired land through conquest or manipulation, ends were used to rationalize means. Most of these episodes don’t shine, no matter how hard they’re polished.

WW II gave the people of America, some of its allies, all of its main enemies and a number of bystanders the freedom to sleep without fear. Reasonable people can agree to disagree on whether all the undeclared wars and interventions we’ve undertaken since 1945 have similarly protected our slumber.

My father-in-law was drafted in the early 1940s. Because he is very smart, the Army first assigned him to working with cameras in P-38s and then to the 74th Signal Company (Special), which was attached to various divisions.

One of his jobs as an officer was to go in with the first wave in amphibious assaults to set up communications along the beaches. He did this four times—Sicily, Salerno, Anzio and Saint-Tropez in southern France. Four D-Days. The fighting in Italy — up one fortified mountain after another — was as bad and as disheartening as it got.

He’s carried the cost of defending our land for more than 60 years. He paid, and I benefited—is how I figure it.

Last weekend, Melissa and I talked with him about this. He called his memories, “war stories.” But they were also purchases: This amount of horror buys this amount of sleep without fear.

I thanked him for what he did, for what he went through.

I think this thanking business is important to do. It has to be personal. I hope it means something a little different than another marble memorial.

He said he had been thanked only twice before.

Veterans of the Vietnam War were not thanked for serving by people like me who thought the Johnson-Nixon policies were wrong. They should have been, particularly by people like me. It was the policies I thought bad, not the soldiers in the field.

Less than a year before Pear Harbor, FDR in his January, 1941 State of the Union Address said that we “looked forward to a world founded upon four essential human freedoms” – freedom of speech and expression, freedom of religion, freedom from want and freedom from fear – “everywhere in the world.”

He didn’t say America was obligated to bring those freedoms to everyone everywhere. He said those principles were the four corners of a better deal for everyone everywhere.

Defending our own land and those Four Freedoms from genuine threat has united us. Our efforts to bring them to others through military interventions have sometimes improved lives and sometimes not.

It bothers me that half of the people in the world sleep in fear. But my more immediate — and selfish — concern is what we would lose here in the effort to make the world safe for the Four Freedoms everywhere.

Many empires have wanted to be global; none ever succeeded. Nations, like cats, can’t be herded in one direction–even a good one.

I often hear, “Freedom is not free.” It’s a truth that is cheapened when, like a bullet-proof vest, it’s slipped on to protect every use of American military force abroad since WW II, no matter how badly conceived.

Freedom’s price is too high to be paid here and there, everywhere and anywhere– just to pay it. We must get something really important for ourselves when we pay.

Our songs sing of land and our way. The land of the free. Sweet land of liberty. This land is your land, this land is my land. From sea to shining sea.

That’s what WW II paid for, what’s worth paying for.

This thanking business remains on my to-do list.

I was Colonel Henry Bouquet, second in command under General John Forbes who, though ill and litter-bound, had led 7,000 British soldiers and colonials across Pennsylvania to the Forks of the Ohio River.

The French had staked a claim to the Ohio country a decade earlier, then built Fort Duquesne at the point where the Allegheny joined the Monogahela to form the Ohio. This gave them a water highway to the Mississippi and New Orleans.

George Washington and a handful of Virginians had taken a run at the Forks in 1754, only to be whipped badly and allowed to withdraw. This defeat initiated the French and Indian War (1754-1763) and brought immense consequences.

At the time, both the Pennsylvania and Virginia colonies claimed the Ohio country–Ohio, southwestern Pennsylvania and northern West Virginia. Virginia’s legal theory of western land ownership was pretty simple: We say we own it, therefore, we do.

No Virginians or Pennsylvanians had settled in the Ohio country in 1758. So why were Forbes, Bouquet and George Washington — leader of the Virginians — about to attack a French fort when the closest settlements were more than 100 miles to the east?

The British wanted to remove the French for reasons of politics, commerce, religion and defense. The Pennsylvanians wanted to establish East-West trade and strengthen their Ohio land claim.

The leaders of Virginia wanted western land, and, as the saying around here goes, “they wanted it give to them.”

Twenty-five big shots had formed the Ohio Company of Virginia in 1747 to procure huge land grants from the Crown. Among their names were Lee, Fairfax, Mason, and Augustine and Lawrence Washington. They were mainly tobacco planters, linked by family, marriage, religion, business and politics.

They wanted to get rich quick with a simple idea: Acquire land for free, divide it and then flip it for cash. Several other companies were formed by other Virginians to lock up other grants.

And one more thing: Two of Virginia’s British administrators — first Robert Dinwiddie, lieutenant governor and de facto head of the colony, and later, John Murray, Earl of Dunmore — were cut into the deal.

The Ohio Company started with 200,000 acres west of the Alleghenies and south of the Ohio River. The Company needed control of the Forks to make land sales safe.

Chasing out the French was as much about protecting Virginia land speculators as anything else. That’s why Dinwiddie had sent Washington and the Virginia militia in 1755 and 1758.

The Company also needed tomahawk fodder. Virginia policy had been to settle its western borderlands by giving 500 acres to each “war-like Christian man,” heavily armed. Much of the Shenandoah Valley was given to middlemen who promised to stick such souls on the front line.

Most of these immigrants were Scots, Lowlands Presbyterians then in northern Ireland for religious and economic reasons. Mixed in were French Huguenots, German Protestants and Welsh. They wanted freedom from landlords, religious liberty and land.

They were sold land cheap, given it or allowed to earn it. Many drifted west into the mountains, claiming ownership as squatters under their own unwritten “forest law”—100 acres for every one of cultivated corn; the “cabin right” of 100 acres around any structure; and the “tomahawk right,” which took in land that was enclosed by virtue of “chops” in boundary trees.

Until the late 1740s, Virginia’s western border had been relatively peaceful. The Iroquois-linked tribes did not value the Valley because it was too warm to produce the thick beaver pelts they needed for trade. As white settlement pushed west, they resisted.

The bloodbath in the Appalachians and the Ohio country during the last half of the 18th Century was a rich man’s war and a poor man’s fight. The settlers found themselves fighting for their own land and, more broadly, for the land that Virginia’s speculators had been given.

So Dinwiddie sent George Washington in 1754 to take the Forks for largely private ends, including their own.

The next year, Washington survived Braddock’s defeat, taking command when the General was shot off his horse and turning a near rout into a retreat. During the evening of July 9th on the river flat across from Fort Duquesne where the Pittsburgh Pirates and Steelers now play games, the victorious Natives slowly tortured their British captives to death.

In 1758, a British reconnaissance force that Forbes had sent toward the Fort was led into a Custer-like debacle with many killed and captured. Despite this initial victory, Duquesne’s defenders knew they could not defeat Forbes’s army. So they burned their Fort and left the heads of captured Highlanders impaled on spikes above their kilts.

Bouquet with Washington by his side renamed the smoldering mess, Fort Pitt, after British Secretary of State William Pitt, The Elder, The town became Pittsburgh.

Five years later, Bouquet and his commander, Sir Jeffrey Amherst, agreed that the tribes around Fort Pitt remained a problem. Amherst wrote to Bouquet, suggesting the “Total Extirpation of this Execrable Race.” Bouquet replied that the “Vermine” be hunted with English dogs, “the Spaniard’s Method.” Their letters show they agreed on giving the “Vermine” smallpox-infected blankets and handkerchiefs. This was done, causing an outbreak.

What started as Washington’s 1754 humiliation ended with a victory in 1763 that gave Britain all land between the Great Lakes and the Mississippi along with Spain’s Florida, which produced war debt the British wanted the colonists to pay through taxes, which led to the American Revolution—won only because of French help, which gave America the British claim in lands south of Canada and east of the Mississippi, which opened those lands to American settlers, which led to the Louisiana Purchase and eventually to America’s 48 continental states. Washington was, indeed, the father of our country.

Speaking as Bouquet, I proclaimed: “We must defeat the Indians!” I was given no lines explaining either the why or the how.

We named a nice town and a fine college after Lord Amherst. The University of Pittsburgh is at the intersection of Forbes Avenue and South Bouquet Street. Mount Washington overlooks the Forks of the Ohio.

Ange de Menneville, the Marquis de Duquesne, governor of New France in the 1750s, lives on as a university, a light company, a cable-car incline up Mount Washington and a defunct beer.

Some recall Hokoleska (Cornstalk) and Pontiac, who was turned into a noble-looking illuminated plastic hood ornament on his namesake 1950s car, the Chieftain.

The tribes protected themselves and their land as best they could. Americans had British troops, land-hungry immigrants and border landowners refilling their ranks. The tribes had only themselves. They held their own in battles but could not beat unseen enemies–smallpox, measles and influenza.

Land lay at the core of why we did what we did.

Land around the Shenandoah Valley has been in play again since the 1960s. The parcels get smaller and the prices get higher.

Perhaps this year, Pittsburgh’s 250th birthday, some eighth grader in a funny hat might invoke those who owned the Forks of the Ohio for 10,000 years before we did.

The answer does not depend on what your definition of “is” is.

But there’s no one-size-fits-all answer, because much depends on the severity, length and characteristics of any economic pullback.

And everything else depends on the land you’ve bought–its price, financing terms (if any), location, uses and affordability in light of your income, among other factors.

Land bought with an Adjustable Rate Mortgage (ARM) will benefit from a recession’s lower interest rates.

But if you’re laid off during a recession, you may either lose the land or have to sell it a low price to get free of its debt.

Land bought at a too-high price will lose value.

Easy credit, ARMs and speculation hyper-inflate prices in good times; when times sour, they can boil you.

Most types of rural land have not lost value in recent months. The factors that have steadily lifted their worth during the past decade are not mainly speculation and cheap credit.

Second homes that have doubled or tripled in value in the past several years are the exception. They would be front-line casualties in a recession.

The most vulnerable are likely to be those in destination settings, particularly dedicated communities.

The least vulnerable second homes are those within a reasonable driving distance of metropolitan areas.

Undeveloped land that has marginal characteristics—so-so location, limited uses, negatives—will not do well.

But quality land will ride out a recession.  Population growth, not speculation, is the flood lifting this boat.

The floor under timberland is its long-term appreciation. That’s why pension funds, endowments, investors and trusts are putting money into it.

Quality land, bought at the right price with sensible financing, should weather a recession better than stocks and many other investment alternatives.

Buying land on time with a long-term fixed rate, coupled with tax-deductible interest and cash potential from a partial sale or rental, is a strategy that floats over turbulence.

The credit crisis we now see is the product of different groups each working the angle of self-interest.

Mortgage borrowers jumped at low-introductory rate ARMS and interest-only loans.

Banks sold their sub-prime loans in packages to investors who bet these risks wouldn’t bite. Banks began seeing packaged, hinky debt as a revenue stream.

Investors—hedge funds, pension funds and insurance companies—borrowed to buy these packages of shaky loans.

When mortgage borrowers started being pinched by higher interest rates, foreclosures and other problems, many sectors of the economy yelled “Ouch.”

Common sense has a way of rearing its ugly head.

Eventually, lenders will start lending again on the basis of genuine value.

Recovery starts with quality borrowing and quality lending.

Good land is a better place to wait out a recession than most others.