(KANSAS CITY, MO) - For the millions of Americans who have become unsettled by recent Wall Street losses, identifying solid alternatives for current and future investment has become a popular topic of conversation. The answer is literally right under their feet. By planting money in land, investors have the opportunity to take advantage of the high yield returns offered by the steady growth of land values in recent years.
A recent index from United Country Real Estate, the nation’s expert in recreational and rural real estate, reveals that since 2006, general non-urban land values have increased by more than 27 percent. Based on United Country’s closed land sales data, the national price per acre average increased from $1,691 in 2006 to $2,142 in 2008. When compared to the nearly 35 percent decrease on Wall Street since 2006, land investment has become an even more attractive option when it comes to diversifying the allocation of investment funds.
The following scenario illustrates this principle. Imagine that in 2006, two people each had $100,000. Investor No. 1 placed his money in the stock market and Investor No. 2 used his funds to purchase recreational land. Today, on average, Investor No. 1 would have seen his investment decrease to $65,000, while Investor No. 2 would have seen his investment value grow to $127,000.
“What makes land an even more attractive investment is that unlike Wall Street investments, land can actually be used and enjoyed for recreational purposes such as hunting, fishing, hiking, camping, vacationing or as a source of additional income by purchasing cropland or hunting leases that allows them to receive cash rents,” said Dan Duffy, chief executive officer of United Country Real Estate.
According the Michael Landreth, president of the REALTORS® Land Institute (RLI), “Land is one thing we won’t be making more of. That’s precisely the reason land has historically been a great long-term investment. Now, with recent land value increases in many parts of the country, land has become a viable short-term investment as well. The two most active categories of land in the market today seem to be farm land and recreational properties.”
And it appears that investors are looking at and purchasing more rural properties. Buyer traffic on the United Country web site, www.UnitedCountry.com, indicates that purchase interest has increased in recent months. Data through the third quarter of 2008 reveals that the site’s visitor sessions per month were up 13 percent versus third quarter 2007.
“These statistics indicate more than just web traffic,” Duffy said. “Our web site visitors are largely comprised of very knowledgeable and experienced buyers, so seeing a jump in our web statistics is a great indicator that buyers are showing increasing interest in the types of properties listed by our offices and that they recognize this is an excellent time to consider investing in real estate. This growth in web traffic is also showing up in our sales, with United Country’s October sales surpassing the previous two months as well as October 2007 sales figures.”
