I'm in the process of closing on a place. It's my OPINION that farmland offers some of the best safety against the coming inflation. I'm giving $2,500 and acre for a cattle ranch. I fully expect it no nearly double in next decade. But of course I'm buying so I'm biased.

What are y'all's thoughts on farm land's future valuations?

Where is it?

My wife and I inherited her grandparents place between Fredericksburg and Kerrville down Tiveydale Road, about 107 acres.

It has doubled in value since we inherited it........we keep cows on it for the ag exemption but I do worry about taxes being an issue one day. Not sure I trust politicians to not change things regarding the ag exemption one day.

We also inherited 45 acres somewhere outside of fort Stockton, only been to the place one time but the value has remained the same for ten years.

All that to say, I think the day is coming where most people in Texas won't be able to buy land due to a massive influx of people and sky rocketing valuations. Unless, you're looking for a place in the middle of nowhere in far west Texas.

I own 1,000 acres in Concho county. Just lucky it's been in the family since just after that area was settled. I agree with you 100% except for the fact that in a few years Uncle Sam will just confiscate it since there will be no such thing as private property and all farming and ranching will be controlled by the Marxist state. So, we have that going for us, which is nice.

Bill Gates thought it was a wise investment diversification choice

https://www.foxbusiness.com/lifestyle/bill-melinda-gates-top-us-farmland-owners-us

I feel like productive farmland has more potential than just "ranch land" does.

I also wonder just how many "leisure buyers" there are over time. At some point, I'd think all those that can spend far above the economic production value of land as a "retreat" starts running out. Pretty sure that hasn't happened yet.

I would say I am a bull on real assets. But I will draw a distinction between Farm Land and Ranch land. I think Ranch land will appreciate because of the reasons stated above and is a good investment that you can also enjoy. With true farm land, I think (depending on location) could be a better long term investment and inflation hedge. Main reason is that you can buy farmland and not only could the land appreciate, you can realize current yield, which you will probably not get on ranch land. I also like owning land where food is produced, but like anything else its going to be highly location dependent. These are definitely 'stay rich' investments.

If Biden is successful in eliminating the 1031, don't you think that will significantly affect values?

As far as investments go Land is NORMALLY on the bottom of the scale. That is because it usually does not cash flow very good and to build true wealth you have to hold for significant appreciation. That is why over the years, I have foregone land in favor of small multi-family rentals.

Now, having said that, i just purchased 57 acres of ranch land near Lampasas TX primarily for recreation and weekend getaway. However, I would not have bought it had I not think it was a great investment. In this case land around a highly appreciating locale can be an excellent investment when the outlying area's haven't realized the potential of the land's appreciation.

For example, I bought from someone who purchased 4 years ago for about 4,500 an acre and sold to me for 9,200 an acre. Not bad return for him, and the realtor who sold it to me had also sold it to the previous owner. I gave asking price, but I also feel very confident that I could sell the land at 15k an acre one day after buying it. This was an off market transaction.

Farm land vs Ranch land. If you are a farmer and want more land then farm land is probably a better value to that person. But someone who is neither a farmer or rancher will gravitate to ranch land over farm land IMHO. Why? Because the buyer will not become a farmer and probably not a rancher but will use the land for recreation and or to build a nice home on it. Building with trees and wildlife is more appealing than acres of flat pasture. Farm land is good if you are already into farming and you have all the equipment, if not, then not a good buy.

Both types of property in the right location will benefit from surrounding area appreciation, like 1 to 2 hours from Austin everything is blowing up.

The other thing to consider is how much land are you really wanting. I initially was looking for 10 acres. Unrestricted best! Want to shoot guns and hunt and qualify Ag/wildlife exempt. What I found out is that everyone wants 10 acres. So the smart play is buy 50-100 acres and subdivide into 10 acre plots and you end up with 10 free acres because cost per acre goes significantly up the smaller the plot.

The 450 acres next to us just sold for somewhere between $10-11 million but the property cleared, they paid to remove 300+ head of cattle, and included a few houses with furniture. That is $22k+ an acre. We are about 45 minutes from the new Tesla factory so land is going for a platinum premium now

Anecdotal observation from the western hill country. People looking for recreational/retreat acreage has exploded since the pandemic. Everyone wants trees and deer. Those who have figured out they can continue to work remotely are coming to live; not just retirees like we've always seen but families. Lots of Austinites cashing in on their market driven up by the Californians, of course. Way more interest than inventory. Maybe it cools off or maybe it's here to stay. I have no idea. I've never seen anything like it.

*Edited to clarify that trees & deer is the kind of acreage they're looking for; fields not so much.

Yep as the availability of high speed Internet keeps spreading across rural areas, I think we will continue to see a surge to the country. After WFH d/t covid last year, my wife got used to it and took a full time home job in IT. I have been working from home too. We were looking to move and high speed Internet was the driver for location. If we had reliable Internet, I'd be on land between Barksdale and Rocksprings living lol. I also think the proliferation of high speed Internet and people fleeing the city might help revive some of these dying small towns. I'm seeing it with Bandera now. More shops and restaurants opening and after the crap we've had here for last 20yrs, I welcome it

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I'm seeing it with Bandera now. More shops and restaurants opening and after the crap we've had here for last 20yrs, I welcome it

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I wish more small town folks would see it this way, but everyone just likes to complain.

"The traffic is getting horrible" = I now way for 45 seconds behind 3 cars at the stop sign instead of no cars.

"Too many strange people around here." = Oh lawd someone with a last name I dont recognize.

"Back when, X Cafe was all we had it was just fine." = We accepted crap food bc it was the only option

As someone who recently moved somewhat rural, I find it interesting hearing all the complaining from the locals. Maybe there is something I don't "get", but having more food options, more small businesses, and more than 1 person who does a job in a place sure is handy.

Which direction are you from Tesla?

Proof is in the pudding but if Elon Musk is successful (or someone else) you could get your hi speed internet wherever

That said I don't put much stock in it because non-terrestrial solutions have been tried or proposed in the past and they didn't pan out and many in the industry think Musk will fail. But no one has ever thrown Elon Musk money at it before

I'm sure someday it will be possible and it will happen - in the past the market size was way smaller; everyone across the globe now has access to a smart phone pretty much

TikkaShooter said:

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Quote:

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I'm seeing it with Bandera now. More shops and restaurants opening and after the crap we've had here for last 20yrs, I welcome it

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I wish more small town folks would see it this way, but everyone just likes to complain.

"The traffic is getting horrible" = I now way for 45 seconds behind 3 cars at the stop sign instead of no cars.

"Too many strange people around here." = Oh lawd someone with a last name I dont recognize.

"Back when, X Cafe was all we had it was just fine." = We accepted crap food bc it was the only option

As someone who recently moved somewhat rural, I find it interesting hearing all the complaining from the locals. Maybe there is something I don't "get", but having more food options, more small businesses, and more than 1 person who does a job in a place sure is handy.

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It's more about the eroding of the culture and charm that people love about their city/town/community. Look at Fredericksburg and Marble Falls 20 years ago, Boerne today, Comfort tomorrow, etc. What made people move there is not what they maintain, and at some point you become just another area with a bunch of houses.

Real estate has been good to me. Retired

From Peter Zeihan (a good follow - spoke at the 2021 land investment expo)


https://www.agriculture.com/farm-management/business-planning/demand-for-us-soybeans-will-continue-to-go-up-and-brazil-cant

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SF: LAND VALUES CONTINUE TO GO UP. DO YOU SEE THAT CONTINUING?

PZ: I don't want to draw a straight line, but I would expect that trend to continue. The more disruption we have in the international system and the more difficulty we have in the global supply chain systems in agriculture, the better American ag is going to look in comparison.

The country that benefits the most from global collapse is the United States because our system isn't dependent upon it. If you are Belgium or Thailand, you try to get your money where it is safe, so you go to the U.S. The primary destination for that capital flight has been residential real estate and U.S. T-bills, but everybody wants a chunk of American ag land. It doesn't have turnover and there is no open market for it. I have every confidence that higher land prices will continue.

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I agree any land is a good inflation hedge. Clear cut farmland is great for the many reasons mentioned. You can produce on it, lease it out etc. If necessary use it for your personal food supply or at least trade for other things if it comes to that.

In terms of appreciation, clear cut farmland won't rise as fast because farmers cannot afford to pay huge amounts for the land otherwise they won't be able to make a profit.

So yes, if it's truly farmland and not a hunting/farm mix then it will rise just not as fast and not as far. That's been my experience.

I'm closing on 100 acres tomorrow in Red River county. It's in the heart of duck country, has some Eastern Turkey and deer and hogs etc of course. The problem with the land I bought is it's heavily wooded and is in desperate need of food plots. So I'll actually hire a dozer guy to clear out some areas.

I like hearing about you all grabbing a piece of Texas.

AnScAggie said:

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TikkaShooter said:

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Quote:

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I'm seeing it with Bandera now. More shops and restaurants opening and after the crap we've had here for last 20yrs, I welcome it

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I wish more small town folks would see it this way, but everyone just likes to complain.

"The traffic is getting horrible" = I now way for 45 seconds behind 3 cars at the stop sign instead of no cars.

"Too many strange people around here." = Oh lawd someone with a last name I dont recognize.

"Back when, X Cafe was all we had it was just fine." = We accepted crap food bc it was the only option

As someone who recently moved somewhat rural, I find it interesting hearing all the complaining from the locals. Maybe there is something I don't "get", but having more food options, more small businesses, and more than 1 person who does a job in a place sure is handy.

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It's more about the eroding of the culture and charm that people love about their city/town/community. Look at Fredericksburg and Marble Falls 20 years ago, Boerne today, Comfort tomorrow, etc. What made people move there is not what they maintain, and at some point you become just another area with a bunch of houses.

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Preach

Our property is in Carmine

Dallasag517 said:

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In terms of appreciation, clear cut farmland won't rise as fast because farmers cannot afford to pay huge amounts for the land otherwise they won't be able to make a profit.

So yes, if it's truly farmland and not a hunting/farm mix then it will rise just not as fast and not as far. That's been my experience.

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Go price some good corn ground in Iowa.

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What made people move there is not what they maintain, and at some point you become just another area with a bunch of houses.

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There are a couple things at play here. Obviously, diversity of the population is one of those. Local folks having local kids that stayed around and became the next generation of that towns population meant that local traditions were carried forward. Everything from religious actives to parades, fairs, organizations, etc. All the stuff that makes up local culture.

Now, more and more kids dont stay. They want out. Sometimes they still come back, but not always. So who replaces the local kids? Outsiders who move in. They didn't move in saying - Hey we are here to destroy local culture! But when locals leave for other (sometimes better) opportunity, someone else is going to replace them.

I would imagine that its looked something like this, dates could be adjusted some based on the area:

65 years ago, local kids stayed around. Town grew very little.

45 years ago, local kids left for college at Texas A&M, then came back. Town grew little.

25 years ago, some local kids left for college at Texas A&M, sometimes came back. Town growing steady.

15 years ago, local kids dispersed to many different universities, and most didn't return. Town exploding in growth.

TikkaShooter said:

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Quote:

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I'm seeing it with Bandera now. More shops and restaurants opening and after the crap we've had here for last 20yrs, I welcome it

---

I wish more small town folks would see it this way, but everyone just likes to complain.

"The traffic is getting horrible" = I now way for 45 seconds behind 3 cars at the stop sign instead of no cars.

"Too many strange people around here." = Oh lawd someone with a last name I dont recognize.

"Back when, X Cafe was all we had it was just fine." = We accepted crap food bc it was the only option

As someone who recently moved somewhat rural, I find it interesting hearing all the complaining from the locals. Maybe there is something I don't "get", but having more food options, more small businesses, and more than 1 person who does a job in a place sure is handy.

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Well there is a lot you don't get.....

As someone who lives in a small town that is being overrun by city folks it sucks. They come in and drive up prices for everything and drive a lot of the locals out or decrease their standard of living by decreasing their buying power. My family has been here for generations and yes we have given up some comforts like reliable cell service, high speed internet, movie theatre, etc. but people have survived and been happy a long time without all those things. With more people come exponentially more problems.

Subdivisions are popping up left and right out in the country and it's just sad to see. I mean would you rather live next to a 1000 acre ranch or a subdivision with 5 acre lots around you. Basically the small town is losing that small town feel and becoming just another city.

What role will hydroponics and fake meat play in the long run?

I know the guys on here don't want fake meat but there are plenty of people who do. You can't deny the fact that "lab grown beef" will eventually cost less than cattle.at some point.

At that point what will drive land cost?

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Subdivisions are popping up left and right out in the country and it's just sad to see. I mean would you rather live next to a 1000 acre ranch or a subdivision with 5 acre lots around you

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I'd rather live in a country with private property rights, including the rights the sell property to a developer.

Blame it on the folks who sold it, no the folks who split it up into .25 lots and built starter homes.

But yes, I do empathize with the growth thats happening in rural communities. Its unprecedented. And the changes are happening faster than ever. Both citizens and local govts are going to need to find ways to keep up with the change.

Also when those small "cultured" towns only culture is meth and welfare, like my home town in S Tx and pleeeenty of other small towns scattered around a "culture" change or upgrade is welcome. I grew up in a small town in STx and we had a major petrochemical plant that everyone's dad worked at or you farmed. Once the plant went, all the jobs went, the downtown fell down and it's a shell of itself. When we were growing up it was a great place. It is now a drug fueled craphole. I've lived in Bandera 20yrs and seen a lot of people come and go. We have a great meth culture here and the towns folk do not want to upgrade anything downtown and make it miserable for a business to start. But they love motorcycle rallies that I hate. I am happy to see families coming into my neighborhood. 20yrs ago my wife and I were the youngest in our subs as it was all grouchy old retirees that didn't want to spend a penny on anything. Now we have nice pool, the park upgraded and good kids riding bikes and atv around and parents not worried about kids getting abducted. Town Is getting new restaurants, only chain is DQ and Burger King. Plenty of new mom and pop places. I am good with changing a meth culture into a family culture.

TikkaShooter said:

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Quote:

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I'm seeing it with Bandera now. More shops and restaurants opening and after the crap we've had here for last 20yrs, I welcome it

---

I wish more small town folks would see it this way, but everyone just likes to complain.

"The traffic is getting horrible" = I now way for 45 seconds behind 3 cars at the stop sign instead of no cars.

"Too many strange people around here." = Oh lawd someone with a last name I dont recognize.

"Back when, X Cafe was all we had it was just fine." = We accepted crap food bc it was the only option

As someone who recently moved somewhat rural, I find it interesting hearing all the complaining from the locals. Maybe there is something I don't "get", but having more food options, more small businesses, and more than 1 person who does a job in a place sure is handy.

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Going home and seeing a thousand houses in an area I grew up roaming around is like finding somebody in your fishing spot.

I'm as capitalist as the next guy, but you've got to empathize with the feeling of kinda sorrowful nostalgia a guy feels when his home town is now just another suburb of San Antonio.

I'm sure people have always felt that way. When the town went from 100 to 1000 people, 1000 to 10,000, etc.

Our ranch land in East Texas..... 239.464% increase in 9 years!

I'm seeing land for grazing and hay about 60 miles east northeast of Dallas on the market for $12,000 an acre. It will probably sell for 11-11,500. 3.5 years ago it was less than $6,000 an acre! Back in late 80's it was $300-500.

With the new lakes coming in and population migration from "the city" it's going to continue going up! (rapidly)

Go check out where 121 is extending to the East. Big time developers from DFW gobbled that land up 10-15 years ago. Farm land has been and will be converted to rooftops!

You want wide open spaces with peace and quite?

As I've always said, life begins west of the Brazos!

Wish we would never had left Tom Greene and Erath County!

I've got people inquiring regularly about land as an investment at $100k an acre in Collin County

Land is nuts

texrover91 said:

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I've got people inquiring regularly about land as an investment at $100k an acre in Collin County

Land is nuts

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Are many of those inquiries from out of state, or perhaps even international?

And, is that $2.50 a foot dirt something that has commercial potential in the next 5-7 years, or is it just pure speculation from guys who already have a fleet of Lamborghinis and feel that they have to do something with all their spare money?

45-70Ag said:

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My wife and I inherited her grandparents place between Fredericksburg and Kerrville down Tiveydale Road, about 107 acres.

It has doubled in value since we inherited it........we keep cows on it for the ag exemption but I do worry about taxes being an issue one day. Not sure I trust politicians to not change things regarding the ag exemption one day.

We also inherited 45 acres somewhere outside of fort Stockton, only been to the place one time but the value has remained the same for ten years.

All that to say, I think the day is coming where most people in Texas won't be able to buy land due to a massive influx of people and sky rocketing valuations. Unless, you're looking for a place in the middle of nowhere in far west Texas.

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You married well.

Ribeye-Rare said:

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texrover91 said:

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I've got people inquiring regularly about land as an investment at $100k an acre in Collin County

Land is nuts

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Are many of those inquiries from out of state, or perhaps even international?

And, is that $2.50 a foot dirt something that has commercial potential in the next 5-7 years, or is it just pure speculation from guys who already have a fleet of Lamborghinis and feel that they have to do something with all their spare money?

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It's a mix

Our market is all over the map - anyone who is going to make serious money already owns what will develop first and the rest are lining up and will likely hold some time. The smart investors (most profitable) aren't using my money (loans). We have people buying off the internet from all over especially the east coast and California, and of course the a Chinese are rolling the dice big (or were)

We have realtors bring bus loads of Indians (some citizens some H1 Visa etc) they fly down from to shop, they buy almost anything but now land seems to be very popular). The vast majority are not seasoned investors and have no plans for development themselves. Usually it's 4-10 principals sometimes up to 20. Proximity to Frisco and the large Indian community there has played a big role. Some of the local guys are more savvy than others

We also have land holdings that get shopped/sold at ICSC every year sight unseen. Some parcels have probably turned over 4-5x in 20 years without a single improvement made - all speculative

The biggest players are of course pretty well known local (DFW/Houston or national) developers. Many bought large tracts in AG 5-10 years and the farmers went "corporate" 9-5 farmers. No expense spared on equipment.

Family has 4 farms totaling 630 acres in western Nueces County and in Jim Wells County. Taxes have stayed pretty constant through the years but there was a decent bump in the tax appraisal this year, first one in several years.

Given overall population projections its just a matter of time until people/development get close to you. Bigger issue for me is seeing some of the best land in the country for growing crops getting concrete poured all over it. Much rather see infill development in an already established small town than sprawl development over formerly productive farm land.