Donner it has not made since in years. And I thought It would correct and it just keep climbing. I bought our farm 6 years or so ago and can triple my money or more. But I couldn't replace it so I will keep it.

Most of its over 5,000 an acre, some far over. We don't have great ground here, lots of gravel and hills with gravel.

Let's say I did find a 40 for $5,000 a acre. Put 33% down and financed $133,333 @ 7% interest over 15 years. $1,200 per month payment for $14,400 per year payment. In 15 years I will have spent $280,000 plus taxes and received $90,000 in land rent, not even enough to cover the interest and taxes.

Now let's say the next 15 years land rent averages $250 a year, that's $150,000 in income over the next 15 years meaning I still would not be broke even.

I would be 70 years old by the time I broke even roughly. Of course the land would be worth more presumably, say $15,000 a acre or $600,000. If I sell the govt is going to take a huge chunk of that and I'll have maybe doubled my money in 30 years. If inflation stays around 2-3% I'll have made around 2% a year.

It has to make cents to make sense and current prices do not make sense, they are speculation [/quote

If you have to finance land then no after you pay interest it's not going to pencil out. There are not very many low risk real estate investments that will if you have to finance them. In general the average expectation for return on cash renting ag land is 3% per year. It's not uncommon in the market I live to see a knowledgeable buyer purchase it at 2.7%. It's relatively low risk with minimal holding cost. If you can find a good tenant farmer that will pay you $150 an acre at 3% return that equates to $5000/ac value. (150/0.03=5k). Compare this to say commercial real estate like an office building the annual rate of return right now is around 8 to 8.5%. but you have much higher risk and more overhead such as higher real estate taxes, insurance, maintenance and repairs, common area expenses, etc.

You're not going to get rich from buying agland but it's a relatively safe investment and if it has some recreational opportunities that is worth something also. And depending on where you buy it at, 20 years from now it may have a different highest and best use such as commercial a residential development, so the reversionary benefits may increase your overall rate of return over the holding period.

There are a lot of rich farmers that were poor 30 years ago because they lived 20 miles from the city and had marginal soils. Now they are the city.

Ol dad

I don't disagree with any of that Ol'dad.

I appreciate everyone's input, ill keep checking this thread and probably try and make a new one after new years to keep gaugeing opinions.

If you can find tillable land down there for $5,000 an acre jump on it.

Of course it's not Iowa farm grown, if it was it would be triple or quadruple that

I can't and that's kind of my point. Even at 5k it doesn't pencil out much less 7k.

An hour south or an hour west of here is great heavy black soil, we're in the st cloud area sand pit

How much is land rent down there?

Don't just look at leasing to farmers but also hunters for additional Income. Land will only go up overe the next decade so the value will increase. We both missed the boat on the low interest rates. I want more but don't want the debt. I was blessed and was able to pay cash when I bought the farm.

125-200.

Depends on the field, size, hills, etc. If you want a consistent decent crop you need irrigation here.

Are those land rents per acre you quoted for your area with or without irrigation? Same here as to rental rates, field size, hills or not square fields, distance to farm due to hauling weight heavy forages and liquid manure but the rats are 160 to 320 with most around mid 200s. We have a neighbor farmer who has some lighter soil so he as dug 3 ponds and irrigates about 150 of his 1200 acres. It cost him about as much to irrigate those acres as to buy an additional 80-100 acres as his yields went up by about 40%, especially alfalfa.
We are about 60 miles or so north of the better growing areas of WI. Our better farmers, say the upper 1.3rd will average about 170-180 bu per acres on an averge to good year on all their acres. When it is wet in our clay planting gets delayed and the ground stays cold and gets hard. Due to the need for forage and manure we probably pay a bit more per bushel of yield on rent. Averge rents at $250 with 170 bushels per acre is about $1.5 per bushel for rent.

Bryce

Lots for new home construction will be, and are coming down in price. Other types of real estate that people don't generally finance will correct a bit, but since those types of buyers are usually cash buyers I doubt there will be as much of a drop. I'm talking larger acreage parcels like timber land, bug-out properties, etc..

Irrigated would be 250+. I want to farm, ide like more ground, I just don't want to work 80 hours a week to be able to afford to farm another 20 hours a week.

As Mark said, depending on the current economic conditions, cash can be king and put you in the best position.

When we make an offer to buy land, we use a buyer’s realtor to keep everything professional. We supply terms to our realtor. We very clearly state our terms, say they are not negotiable, and say the offer expires at 4:00 pm the next business day. We include that a check for earnest deposit will be delivered to their realtor’s office no later than 4:00 pm on the day following their acceptance of the offer. Closing within 10 days.

Our offers have won out over offers of much more money which was conditional upon a home sale or financing approval.