Heil Harvesting, Ulysses KS/Limon CO | I understand your point. It is well taken. Simple math.
It is my opinion that holding cash currently is not a good option. I think 1031 or no 1031 we would see land values where they are. A tangible investment, a steady return. As an investor, you win two-fold with land. If we do in fact see inflation, not only does my hedge against inflation work as land prices increase as the dollar increases BUT rent goes up as commodities go up (in an inflationary situation), so the return on my investment goes up. The return vs. the land value may not ever change significantly but my ROI has. Comes back again to the separation of land ownership and operation.
Now, I could be all wrong, we were talking about $2 corn and $3 wheat and deflation last spring. I view land for land as only an exchange, if we sell land now, we will purchase land NOW. An exchange, if we inflate, it does not matter, if it deflates, it does not matter. I am not into speculating the land market. I play with grain options some and that is the end of my speculation. Longterm we just hope land values increase. If I was an investor I am not sure I would take the risk of deflation. Hopefully someday I will have to worry about that, but not now. :) |
Someone explain to me how a 1031 exchange is good for farmers...
