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Illinois | I honestly dont know what direction we are headed.
My opinion : Generally speaking land values are not based on ROI, however land rents are. I am from central Illinois and there is still some high dollar land being sold. They guys who are buying these farms are not looking for a short term investment but rather building upon what they already have for long term gain. They know very well that these farms dont cash flow themselves in the short run and they could be investing in other places and get a better return.
So why do they buy? Because its what they know and what they understand. " I want something I can touch and see" is what i have heard my grandfather say. Money in an investment account, stock market, bonds and so on may very well bring in a higher return but these guys want land. They want to pass it down to their children as part of their legacy. The house where my great-great grandfather lived where he was a tenant farmer during and after the great depression still stands and is on Washington street just west of Bloomington. When he died he was a poor tenant farmer. It happens to be on the way to a building that has held numerous land auctions in the past. I know that driving by this house on the way to a land auction has served a reminder of what a solid land base is important for.
sorry for the rambling, these are challenging times for Agriculture | |
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Land values
