.........reasonable valuation.

[farmaholic]

Warren Buffet, of Berkshire Hathaway was reported to have said:

"Berkshire Hathaway will only do a deal at a reasonable valuation"

I wonder if this is advice farmers should heed when buying farmland.

What ROI can be earned to determine a reasonable asset valuation. 2,3 or 5%, 7%?

What about the assets ability to generate enough income to pay for it's purchase.

What about the assets ability to appreciate, over what time frame.

Do Buffet's investments require subsidization to make sense? (Oxymoron to the max)

Does Berkshire Hathaway buy bubbles?

[blackpowder]

Your competition for that land next door isn't a publicly traded company whose execs all graduated from the same business school.
Eventually the better question might be; At what age do I want to be debt free? Or, what does my retirement look like? Or, what does my kids future on this land look like?
Still trading at $3500-$4500 here.

[bucket]

blackpowder

At those levels retirement looks pretty good...no?

[Bowerpower]

blackpowder

At those levels retirement looks pretty good...no?

Depends if you want the next generation to farm?

[iceman]

At the end of the day it is a productive asset and it will all depend if you are thinking of leaving a generational asset or putting it into cash.

Nothing wrong with putting it into cash but cash is easily spent by heirs on nonproductive assets.

Iceman Out

[AlbertaFarmer5]

Keeping that in mind, Warren Buffet's son owns ( and oversees, not clear what that entails ownershipwise) farmland and is actively farming in Decateur Illinois. Perhaps reasonable valuation doesn't apply in this case, or it is reasonable to him?

[farmaholic]

Keeping that in mind, Warren Buffet's son owns ( and oversees, not clear what that entails ownershipwise) farmland and is actively farming in Decateur Illinois. Perhaps reasonable valuation doesn't apply in this case, or it is reasonable to him?

AF5, I posted and deleted a long post showing, at fixed rental rates(90, 70 and 50 $/ac) and at differnt expected ROIs(3.5,5 and 7%) what the purchase price of the land should be(for a cash investor) . It showed you had to spend alot of money for a meager return based on fixed rental rates...when rental rates dropped it got ugly(land was definitely overpriced). It was an interesting exercise but who the **** cares, too many hungry producers willing to make it worth investors while.

Then a snap shot of reality for a producer to purchase and pay for land after a 25% down payment and 15, 20 and 25 year terms at 5% interest and the yearly payments and those payment costs per acre....there too, I think I was only pointing out what everyone already knows. ..so who cares.

[farmaholic]

She all went 50 ! No need for sask crop insurance employees !

50 x 12= 600 Hun an acre !

+ 500 000 or + 120 !

Reasonable valuation !

Sure, OK... not here. Maybe once in a lifetime.

[farmaholic]

Are u buying that land or u waiting for doomsday ??

Define "doomsday":

...Never

...Correction

...Crash

...tomorrow

...next week

...next year

...yesterday....

[sumdumguy]

Just resurrect the CWeiner Board and watch land values tank.