According to the LANDTHINK Pulse results, 39.16% of our audience said that given the recent run in the stock market, they were VERY LIKELY to invest in land real estate. This past January, the Dow Jones industrial average and S&P 500 both hit record highs. The boom in the stock market is a clear reflection of the confidence among investors in the Trump administration’s economic agenda and Wall Street’s positive reaction to Trump’s overhaul of the U.S tax code. The low unemployment rates, global economic growth and soaring corporate profits had optimistic investors piling into stocks. Market analysts dubbed the stock market mini-boom the “Trump Bump.”
Last month, the February Pulse asked: Based on the recent record highs in the stock market, how likely are you to invest in land real estate?
Since January, the daily fluctuations and minor market corrections have left some investors on edge. Trump tariffs, coupled with worries about inflation, have investors that prefer stability and control rethinking stocks and looking at safer, non-traditional ways to diversify their portfolio. Investing in the stock market is a risky venture, but for those who prefer a more stable, consistently rewarding avenue of investment, land real estate could be the answer.
There are many factors that motivate people to jump on the land bandwagon. Besides being a great way to build your wealth, land is tangible, appreciates in value and is limited in supply. Not only is land a relatively safe long term investment, but it offers folks one special thing other forms of investment like stocks and bonds cannot- enjoyment. A vast majority of the population loves the solace of the outdoors and peace of mind knowing their investment is safe and value is growing.
The downside, land is not liquid. Investing in land can tie up your liquid assets until you’re able to sell the property, but if you’re in the market for a solid, long-term investment, raw land is worth consideration.
There are ways for investors to offset the costs of land acquisition. In his LANDTHINK article, Finding Ways to Make Rural Land Pay – Justifying Your Rural Land Investment, Jonathan Goode, of Southeastern Land Group, talks about the “bundle of rights” associated with a particular property. Splitting off pieces of your ownership bundle- by leasing or selling them- could generate income and help carry costs associated with your land. In the article, Jonathan lists some ideas (by no means exhaustive) about the pieces of your bundle of rights that can be sold or leased:
- Hunting rights
- Timber (can be thinned, harvested, or leased)
- Mineral and gas rights
- Conservation easements
- Renewable energy potential
- Cropland, pasture, livestock grazing land
- Cellular phone tower, radio tower, electric utilities, and natural gas transmission lines
The results were all over the board, but the largest percentage (39.16%) viewed land as a good investment and indicated that they were VERY LIKELY to invest in land, followed closely by 20.43% who said they were SOMEWHAT LIKELY to put their money in the land market. Only 18.62% of our audience said they were NEUTRAL, and only 16.37% indicated they were VERY UNLIKELY to enter the land investing market.
As with an any investment, there are risks involved with land investing and no guaranteed ROI. Risks posed by the environment and nature include disease, insects, wildfires, hurricanes and tornadoes. The cost of inputs (seedlings, fertilizers, etc.) and price of outputs (sawlogs, pulpwood) on timberland pose a risk to investors. Regulatory risks (like endangered species) are another factor to consider. Always seek the advice of attorneys, tax experts, foresters and land agents before purchasing an investment property.
Here are the final Pulse results:
We were pleased with the large number of Pulse responses, and we thank everyone who answered the Pulse and shared it on social media with friends and connections in the land industry. LANDTHINK would like to extend a big thank thank you to Southeastern Land Group for sponsoring the February Pulse and for coming up with a very interesting question to pose to our audience. If you’re looking for land for sale, or thinking about selling land in the Southeast, Southeastern Land Group is the name you need to remember. They are a full service land and farm brokerage company dedicated to providing the best service and the best results when it comes to buying or selling rural property.
Become a Pulse sponsor! It’s a great way to ensure your brokerage is the first one buyers and sellers call when they have a need to buy or sell property. You’ll get insane exposure on Social + Email + Web. That’s 500,000+ monthly eyes on you! Once you have it, you won’t want to give it up! Pulse sponsorships are offered on a first come first serve basis and are subject to certain limitations. If your business would be interested in sponsoring the April Pulse question, please contact us soon.
Do you have a suggestion for next month’s Pulse question? Submit your question and we might choose yours!
We want to know what you think about our March Pulse question, chosen and sponsored by The Land Show With Dave and Johnny: Which do you see as the biggest drawback or deterrent when considering the purchase of rural land? Answer now.
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