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Dayton, IA | I think the hard part of buying land is charts and graphs vs opportunity. I have noticed the farmers who own lots of land have bought over time. I have a feeling, in general, they don't have the exact farms they want at the "right" price but as they progress in their career they own more land. When the perfect farm is available, they probably didn't have the money, and when they had money the farms available were not perfect but they bought something anyway and didn't worry about the ones that got away. I think more important then price is getting started. Land takes a long time to pay for with after tax dollars. When you are young, you don't have a lot to loose, don't have big tax bills, have energy to make the money necessary for the payment, and you have time to pay the farm off. If you wait, you loose the "time" to pay off the first one so you can repeat the process. Not that you should buy something at any cost, but there is always a 50% chance of the price going up or down tomorrow and sometimes the opportunity cost of waiting costs more then overpaying a little now.
A.J. | |
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Land Prices and Mean Reversion
