Hunting land prices.....

Discussion in 'Iowa Whitetail Conference' started by iowaboy, Oct 19, 2018.

  1. iowaboy

    iowaboy iowaboy

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    I keep a pretty good eye on the land prices and I and am sure most people that keep and eye on it have noticed a major jump in the price of hunting/combination hunting farm ground in the last year or two. I’m curious on other people’s thoughts on when it’s going to hit the top... I see this last week realtor companies have put a few farms on the market for 4-4600 an acre with very little return on investment... To me I do not see that as a good investment but that’s me.. The way I look at it at 4600 an acre at 5 percent interest on say 100 acres that’s 460000 dollars that’s 23000 dollars a year interest... man a guy could go on a ton of great guided hunts every year for that... i understand most farms are not bringing that but I’m just putting in perspective... what’s everybody else’s thoughts on it?
     
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  3. arm

    arm Leg

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    Land is the best investment you can make. When you pay cash

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  4. Hardwood11

    Hardwood11 Well-Known Member

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    It did jump a lot in last two years.
     
  5. madplotter

    madplotter PMA Member

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    For sure it has taken significant jumps. The dream of owning dirt is waning for many working class families. Sad situation.
     
  6. Hardwood11

    Hardwood11 Well-Known Member

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    You’d think with the low crop prices that land would drop, but not seeing that really.

    Certain areas have dropped, some high price tillable is down, but Rec ground is still in demand.
     
  7. Sligh1

    Sligh1 Administrator Staff Member

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    Tie Rec land to economy. Say the DOW for example. Dow is at record highs. Which means there’s more “disposable $” out there. Then- think of Rec land just like a “luxury item”. Like a boat, furniture, sports car, etc. no one “NEEDS” rec land. Times are good and they r buying “peace & enjoyment”.

    Now- when economy slows (who knows when) OR.... interest rates get a good bit higher- it will slow!!! When times get tough “luxury items” are always 1st on chopping block. Get rid of em or quit buying them. I’ve watched this cycle 3 times now..... tech bubble in 90’s. 2001 after 9/11 and 2008 housing crash. Each time: economy had major set back and rec ground slowed way down.

    IF IF IF the new norm becomes $5k+ on non-income producing prices.... 1) it will collapse & destroy folks IF $hit hits the fan. 2) if continues to go there & beyond- ground will be segmented & broken into smaller parcels so folks can buy em & Hunting will be degraded.
    I honestly can’t wait to see prices retreat again. I’d love to see it set back 20-30%. No idea if it will happen. There will be a point when the economy slows or tanks and those highly leveraged on rec ground will need to sell & some of those will get clobbered. No idea how or when that will happen but count on a cyclical market to some extent.
     
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  8. Jdubs

    Jdubs Well-Known Member

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    This topic comes up from time to time. If you wait hoping prices will decline you will wish you purchased when you started wishing. It's not going down and if it does not by much. It amazes me how many underestimate the value of entertainment. We pay for it in many different forms ie concerts, ball games, vacations etc. Rec land is a form of entertainment that you own!! And, it's in limited supply. Buy as soon as you can.
     
  9. madplotter

    madplotter PMA Member

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    I agree Jdubs. I will take it one step further and say it's a lifestyle choice. In our situation we could have a new house and all new everything. The "keeping up with the Jones" thing is not for us. We spend our money on ground, conservation, etc. We just live modest and focus energy on a homestead type lifestyle. Some land parcels usually only come for sale once a generation, so many times price is irrelevant for some parcels.

    I was told by a banker that several factors are driving the market. He attributed productive ground prices to supply & demand and many older farm operators still have cash. As far as unproductive ground, wealthy urbanites have lots of cash to play with and want tax write offs and/or speculation interests.
     
    Last edited: Oct 20, 2018
  10. Sligh1

    Sligh1 Administrator Staff Member

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    Agree with above. & make no mistake!!!! ....... it’s where I put my $!!!!!! Good bad or indifferent - I’m buying land.

    I would just say- I want to buy it “carefully”. For example: 1) if I paid $5k for no income ground, I would wanna pay for more down on it or cash. 2) if starting out, I’d buy a “good deal” - traveling further to find a deal below market value that has some income. 3) id pay attention to market cycles. I agree prices will never drop 75% for example. But- a 20% correction is always possible

    Rich guys will always be buying land & there will always be some rich people. So- that’s gonna stabilize any cycle in market to some extent.

    Rec ground has been best $ spent in my life on “things”. Walking on your “investment” is the best feeling ever. I have full belief in ground long term. I do not feel comfy with “gold” for example or a lot of other things people may invest in. That’s just a personal preference & comfort issue for me. My “worst case scenario thought”..... things get “horrible”... I have all the food, meat/fish, fruit & veggies needed x10. Got wood, shelter, etc. Everything needed to survive is on a piece of rec ground. That’s pretty cool to know imo.
     
  11. JNRBRONC

    JNRBRONC Moderator

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    Agree with much of what has been said., doubt rec ground is going to come down much. Sure, one can do a lot of paid hunts in lieu of land payments, but you will not have an asset at the end of it. Land ownership isn't for everyone though, as it can be a fair amount of work.
     
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  12. Copenhagen Tob

    Copenhagen Tob PMA Member

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    The problem around my area , Dubuque county , is a supply and demand issue . It seems the only reasonably priced farms being sold are to family or to a renter that has a good relationship with an elderly owner. Once the realty broker gets involved the prices have been crazy. I was dealing on a piece that bordered mine when a full price offer came in for the whole 130 acres , just a little over a million dollars from a guy that had 40 acres bought from him for a highway expansion. He needed to spend some because of taxes
     
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  13. Wi transplant

    Wi transplant PMA Member

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    Great comments !! My thoughts are even in this market if you take your time and do enough leg work you can still find "your piece" for your bugget !! It took me 2 years. And i looked at alot of farms , put on lots of miles and found my farm !! But you have to be ready to "pull the trigger" when it comes available!! Drag your feet and it will be gone !!!! I found an 80 in southern iowa jan of 18 .with 24 acres tillable 18 crp rest timber ! ( perfect mix my opinion !) For 2500 acre !! So it is possible !! It can be a ton of work but just like everything you work for it is very rewarding !!!!! And just like all real estate location drives price !!

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  14. BJohnson

    BJohnson Well-Known Member

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    One other point - farm size may also dictate the extent of the "correction" if the economy moves through a rough patch. I think that "entry-level" sized farms (</= 100 acres) will see less volatility than larger tracts and proximity (convenience) to larger metro areas also helps stabilize the ups and downs. Larger farms are owned by high net worth folks (which you would think would stabilize price swings) but the pool of potential buyers is also smaller than it is for entry-level farms. Bottom line, if you gear your financial plan for purchasing a farm based on a minimum 10 yr ownership period, you should be able to withstand most pricing cycles for rec farms (again only my opinion/plan).
     
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  15. Hardwood11

    Hardwood11 Well-Known Member

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    Larger farms are always in demand. There’s only a handful of 640 acre managed hunting farms for sale every year.
    There are guys that can buy them. They take some of their portfolio to buy a rec farm, which may have income. Think about how a block of say 1200 acres or more, which is really rare, could command a premium!
     
  16. BJohnson

    BJohnson Well-Known Member

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    "There’s only a handful of 640 acre managed hunting farms for sale every year."

    Valid point. My post related to entry level size farms versus the 100 - 300 acre range of farms (but I could be off base).
     
  17. Hardwood11

    Hardwood11 Well-Known Member

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    I am not saying you are wrong. Not at all. I just know large chunks can command a premium.
     
  18. isu22andy

    isu22andy Active Member

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    To a point , Ive been hunting on buying a guy a beer or there and being a good member of society for what the last 10 years ? At what cost - Free . Sure you might not shoot 160 inchers every year but THERE IS more to life. Its great if you can afford it , no doubt- Im jealous of you guys . But 95+ percent of Iowa deer hunters cant. What do you have to give up to own your own hunting ground ? Tell your kid you cant help pay for their college , their gas, their car repairs, their books , their clothes ? Tell your wife her beach vacation is a once in 10 year dream ? Live paycheck to paycheck to make ends meet on your farm loan and mortgage ? Its not an easy decision on buying a farm and putting your family through your financial burden to shoot a big antlered brown goat so telling everyone to work hard and pay for their own rec ground is alot easier said then done on this website like ive seen over and over and over again. Times have changed. . Iowas and this forum is becoming a "if you dont make 100k+ a year you cant shoot a big buck " picture.
     
    Last edited: Oct 22, 2018
  19. Wi transplant

    Wi transplant PMA Member

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    Whoa !!! Time out here !! Its all about where your priorities are !! I dont make a 100k a year ! But since i was 13 yrs old hunting with my dad on a farm we had permission for on my very first "opening day " sitting in the truck waiting to walk in to out stands . the land owners nephew pulled up with a truck load of his buddies and says SORRY !! You cant hunt hear we are !!!!! That left an impression on me that i swore someday me and my kids will own a nice pc. Of hunting ground that no one is kicking me off of !!! I dont drive new trucks! Or take beach vacations ! Yes thats correct ! But i do make sacrafices to own my land !!! No its not for everyone ( thank God !) But do not judge the ones who choose to take the land ownership path !!! If its not for you so be it ! Everyone is different and we can all choose our own path in this country !!!!

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  20. Diggdug

    Diggdug Member

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    You don't have to be rich to buy a small piece of land. 6 years ago I bought a 110 acres of timber with a couple of small food plots for 2k an acre, it's now easily worth 3k/acre, probably more. I have a 25 year mortgage at a little less than 5% APR after rebate. I also have a home mortgage on a 1900 sq ft house. I drive two old, paid off, vehicles, a 2009 Silverado and a 2007 Toyota Yaris for my daily driver. I make about 75K a year and put the max in my 401K and Roth and HSA every year. So I live on about 40k a year after all my investing. So my point is, you CAN own land on a small salary and in my opinion it's the best, most rewarding thing I've every spent money on! You wont regret it!
     
  21. Daver

    Daver PMA Member

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    You don't have to make $100k a year to afford some rec ground of your own. There are multiple paths to owning your own piece, but like others have already written, it does take commitment and sacrifice to get there. I was 45 before I ever drove a new vehicle, and it was a spartan model compared to other choices available. We did, and still do, live in a fairly modest house...which we had paid off way early through hard work and extra effort...allowing us to purchase our farm in lieu of a regular monthly mortgage payment. I had my farm for 12+ years before I could afford to buy a tractor to go with it, etc, etc, etc.

    Please don't take this harshly, but if your attitude is that "only the rich can..." then you will never achieve your own goals. You have to think in terms of possibilities, not difficulties. Start small, get prepared now, create some room in your budget to be able to do something.
     

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