Is Farmland The Best Investment

[jazz]

Even overpriced, wouldn't crop insurance at least make the payments if you couldn't?

My kids wont farm, but they can be land holders. Contemplating buying them something as an investment. They can rent it out when they are older for a little income and use the asset as backing to buy a home.

Thoughts?

[AlbertaFarmer5]

There are a lot of concerns on here about farmers going back to becoming serfs on rented land, and land being unaffordable to farmers. If those are concern of yours too, your children would be part of the problem and not the solution.

[sk_wheatking]

There are a lot of concerns on here about farmers going back to becoming serfs on rented land, and land being unaffordable to farmers. If those are concern of yours too, your children would be part of the problem and not the solution.

Guess you better not rent your land out to anyone either then.

[TASFarms]

Land rent coming down to $75 - $85 tops. No one paying $100 Lots of land for sale asking $500k a quarter.

[foragefarmer]

Ab5

If I worked my ass off for 50 years farming and IF I leave my land to my children or grandchild and they at one point want to rent the land out rather than farm explain to me what type of problem have I caused?

[Taiga]

Nothing selling in my area. We are in a prolonged recession and it will get worse yet. Not much cash around. If you have the money and like the price it is probably a good investment though in the long term.

[rumrocks]

If you took the principle plus interest money, assuming you are borrowing some of the money, and bought 5 or 6 blue chips, reinvesting the dividends would you be better off.

The last 10 or twelve years has seen rapid land inflation, but over a long period of time (50 years) probably similar to the stock market which has been in that 4 to 6 % range.

Land value in 1970, $30,000 compounded for 50 years @ 5% ( same as stock market ) = $333,000
Very similar to today's value.

Land is more recession proof but if ag stalls and you need cash, sales can be sluggish but you can sell stocks fairly quick, sometimes at a discount.

Depending on the person, sometimes large sums of cash are safer if you can't get access to it immediately.

Personally I'd go with the dirt, but I've made my living standing on it.

[jazz]

If you took the principle plus interest money, assuming you are borrowing some of the money, and bought 5 or 6 blue chips, reinvesting the dividends would you be better off.

I would probably consider stocks as well but you cant borrow to invest like you can to buy land.

I can put up a quarter and probably buy 2 or even 3 more. I cant do that with stocks. Would have to sell some of the land I have to buy stocks and I don't really think that's a great idea.

All we are talking about is servicing the mortgage for the next 20 yrs. My other cheaper land could possible subsidize a bit on the lower rents. After about 5 yrs or so rents shouldn't be falling a lot more and it should be self sustainable I would hope.

[SASKFARMER]

The land was an investment for me when I was young and even my useless Banker at the time asked me why I would buy some much land and not rent a bunch.

Today he is long dead and gone but I think I did better than the Investments etc. Except that Apple one and maybe Tesla.


Point being each has to think about what will work best for them. Renting it all out now would give a great retirement income and kids would still get the land someday.

[jazz]

The land was an investment for me when I was young and even my useless Banker at the time asked me why I would buy some much land and not rent a bunch.

Today he is long dead and gone but I think I did better than the Investments etc. Except that Apple one and maybe Tesla.


Point being each has to think about what will work best for them. Renting it all out now would give a great retirement income and kids would still get the land someday.

And you can still live on your investment too. Plus the restrictions on ownership by non farmers.

Very unique asset class.

[jazz]

My kids are quite young too, all under 10. I could take this on for them and by the time they are in early adulthood they could have a significant asset under their belt. Time is always a huge factor in getting ahead.

Wished I would have started buying younger than I did. I have owned in a couple different places and land has always treated me good. We could be toppy now and I guess thats a risk, but it would be no different if I bought them apartments or stocks, those can go down too.

[Horse]

I have seen quite a few lose there land all the while waiting for inflation to pay for it,some that had good off farm income did ok,some planed there bankrupsy before they even started only to buy back at 30 to 50 cents on the dollar,thanks to AFSC. I think they pluged that loophole now but there is probably a new scam in the works.

[fjlip]

Accountant says only use up your CG deductions selling stuff, after that best to sell/rent to kids, they can own as asset or sell and use their CG deduction, that is of course assuming F*CKING Liberals/NDP/GREENS don't change the rules. I am hearing CG going to 75% taxable from 50%. Last few years cash rent equals about 3% return. Some crop share landlords made a killing, 1/4 of $500/acre malt or canola.

Old joke...guy sells farm, later asks an investment banker where to invest funds, banker says.... buy LAND!

[rumrocks]

I have seen quite a few lose there land all the while waiting for inflation to pay for it,some that had good off farm income did ok,some planed there bankrupsy before they even started only to buy back at 30 to 50 cents on the dollar,thanks to AFSC. I think they pluged that loophole now but there is probably a new scam in the works.

Good point, buying land is similar to tuning engines and a successful honey moon, timing is everything.

[AlbertaFarmer5]

I likely have Jazz mixed up with some other poster(s). He may never have said anything about investors and farmland, but it seems to be a common complaint on here, so I brought it up to stir the pot.

The great part about capitalism, is that we are all free to work as hard as we want, and do what we want with the wealth we created, such as passing it on to the next generation. But, by passing it on to the next generation, we may be denying the opportunity for someone else who might have been willing to work even harder.