Money in Bank vs Owning land? I think the tides have turned.

[TSIPP]

Ha just what I was thinking SK3, you must have pretty thick skin, keep posting as the haters will hate but who gives a damn.

[Oliver88]

Ha just what I was thinking SK3, you must have pretty thick skin, keep posting as the haters will hate but who gives a damn.

x2, haters will hate, better off to ignore them. Keep up the good topics. 👍🏻

As far as Saskatchewan farmland I could see many senior citizen landlords cashing in if they can get $100/acre guaranteed, use their capital gain allowance.

Renting land out for that rate is likely just in small, over competitive areas. A few bad years would put that to an end.

Buying now after a major appreciation in land values, to rent out and receive less than a bank stock dividend is questionable.

[bgmb]

Land might drop a bit but not much. Farming is good in Canada, lots of money being made.

[bgmb]

Just look at all the snake oil companies that have popped up selling foliar fertilizers, hormones, primers.... just shows you how much margin there is when some farmers are buying this shit.

[farmaholic]

Just look at all the snake oil companies that have popped up selling foliar fertilizers, hormones, primers.... just shows you how much margin there is when some farmers are buying this shit.

I used two products that I've never used before....ReLeaf Pulse P...saw no visual difference in side by side passes...I doubt I will use it again(I will look again after fungi spraying). And the other is Manipulator...definitely a visual difference....stay tuned for a pic when its completely headed and stretched out.....I see a distinct line in the field.

In keeping things civil regarding SF3, and not intentionally name calling anyone...just quoting what a neighbor used to say about the Industry and people; "don't let the bastards grind you down"!

His comments were good food for thought...if the situation somewhat pertains to them and their dilemma...who the **** cares?

Take what you like and leave the rest...

[jazz]

I appreciate the thread. Some people just want to farm forever no matter what comes their way because they probably have multiple generations ready to step in. So you never sell land in those cases. I see that

But not all of us are in that boat. Some of us will be the last generation to farm. That requires different thinking.

Couple things I want to point out. This reference to the interest rates back in 1981. That will never happen again. The reason is that it will bankrupt the govt itself and every middle class homeowner in the country. But can rates normalize - sure, a double from here is not out of the question. That would sting too.

Yes you can get 5-7% return in the equity markets instead of chasing renters, but dividends can be taken away with the stroke of a pen too. In 2014 a lot of REIT companies in western canada suspended their dividends for years.

My farm is in exactly the same situation as sk3. I could sell all or any part of it, put the money in the market and make the same as I do farming it or even renting it. Over time I am not making much more money than what the rent would be if you count all the disaster years in there.

The biggest obstacle is selling something real that you can go look at every day to something which is basically numbers on a screen.

[jazz]

Here is a 3rd option - go take an equity loan off your land at 2.5% (should be able to get that from a bank) and then invest it in the market - buy REITS and covered calls which yeild in the 7% range, enjoy the spread.

Maybe sounds like gambling, but before you say that, take a look at what you did on your farm this year. If farmers arent risk takers I dont know who is. Any farmer worth his salt shouldnt fear the equity markets.

[Oliver88]

Here is a 3rd option - go take an equity loan off your land at 2.5% (should be able to get that from a bank) and then invest it in the market - buy REITS and covered calls which yeild in the 7% range, enjoy the spread.

Maybe sounds like gambling, but before you say that, take a look at what you did on your farm this year. If farmers arent risk takers I dont know who is. Any farmer worth his salt shouldnt fear the equity markets.

This 3rd option could be the best for the senior citizen landlords/retiring farmers?

Would be good to hear more opinions on this.

[jazz]

This 3rd option could be the best for the senior citizen landlords/retiring farmers?

Would be good to hear more opinions on this.

Well its sort of a best of both worlds. You want to keep your land, but you want to increase your return or diversify your holdings. There are a number of ETFs offering covered calls on banks which basically doubles their dividends but gives up long term increases. Great for cashflow, but not appreciation.

Couple things about stocks though, the move sometimes a lot based on nothing. You have to ignore the day to day stuff.

Second thing, stocks can compound. There is no more powerful investment on the planet. SK3 $650k invested at 5% return would just about triple in 10 yrs. Your land wont triple again in your lifetime.

[jazz]

One thing about land though, its a rare investment. Not everyone can own farmland. Plus its the ultimate hedge against inflation and govt stupidity. Its really an insurance policy, dividend and investment all wrapped into one. Worse case situation, crop insurance should make your land payments for you so it has financial backing already. What other investment has insurance built in already?

Plus if the world ever went to hell in a handbasket, your family could survive off your land. One harvest is all the food you would need for multiple lifetimes. The people in europe survived WW1 and 2 by owning land. The titles endured the war and people were repatriated with their holdings after the war. What worst case scenario is there than that?

As Buffet put it, if he were offered all the gold in the world or all the farmland in the US he would take the land in a second.