As the weather has started to break above zero in the Midwest our market has continued to be red hot. Topics of low interest rates, great commodity prices, increased livestock prices, increased building costs, stock market continuous new peaks, land price increases and rental rate increases were are all hot topics for the month. We do quite a bit of land management for property owners and this time of year has landowners receiving their annual rents at a higher rate than last year on average up about 15%. One benefit of land as an investment vs dividend stocks or rental real estate is the rental for the year is usually paid up front in advance for the year at a pre agreed or 3-5 year term price making property tax payments, or expenses easy to calculate and pay in advance once annually.
Monthly collection risks, state mandated eviction moratoriums, quarterly earning reports or unforeseen fluctuations are much less volatile in land also. Land investments currently cash rented are paying out 2-4% however an increase in rental rates, custom farming or renting additional items on land can increase this ROI.
Onto the current prices of land and how they were sold. We currently have more pending transactions than we ever have for February and our buyer lists and requests continue to grow. We need property to sell and we are achieving higher than ever prices for the properties we are selling.
Selling methods for the month were: on market listings, off market private treaty, online timed auction, and presale online auction. Buyers were half investors and half local operators/personal use. Many buyers used 1031 exchanges or proceeds from existing stock market, or sold other investments to go into more tangible less management asset class of land.
If you or someone you know has a property they are interested in selling and would like an updated value opinion contact one of our agents today. They would be happy to complete a free proposal and plan for your future intentions and answer any of your questions.