"Land doesn't loose 900 points in a day!" This phrase resonates with land investors stability, long-term value, and hedging against market volatility. Although land is a solid investment diversification is still key.
Why is land a smart investment?
Land is safe smart investment and being a tangible asset one can improve on their investment and use the land while increasing its value unlike stocks. New fences, habitat improvement, field restoration, irrigation improvements, or an updated home on the property are all things that can increase the market value of your land asset.
There is a limited supply of land. This old saying will forever hold true and will lead to long term appreciation of land value. With potential for passive income land can be leased for farming, hunting, recreation or commercial use. Land investments are less volatile than stocks with out the wild swings.
On the Flip side: Land is not a one size fits all investment
With land investing there is always the concern of liquidity. It is harder to sell quickly compared to stocks. Land will come with property taxes, upkeep, maintenance and development costs. Some of these costs can be offset by leasing the property out.
Market stability is still a concern with land investments. Selling out your land investment is still dependent on location, economy and demand.
There is also a risk of over investing in land and limiting your flexibility to invest in other things.
Diversify your investments
Spreading the risk out by investing in multiple asset classes (stocks, bonds, real estate, businesses) provides stability. Stocks can provide liquidity and growth, while land offers long-term security.
There are other avenues that can help foster growth of your assets such as agriculture, technology, and even gold can complement a land investment strategy.
Having some liquid investments can ensure financial flexibility in case of an emergency or unexpected financial need.
Investment Balance is key
So although the saying, "land doesn't loose 900 points in a day" is true. We know that having diversity in your investment portfolio is key. Land also doesn't increase by 900 points in a week or 100x like wild crypto run will. Smart investors leverage land alongside other assets to maximize opportunities and mitigate risk. The goal may be to own land but you also need to consider having a well rounded financial structure.
Why would a ranch broker write a blog about investments outside of land?
I write this to help potential ranch buyers and seller understand that working ranch broker Jerad Cotten is unlike working with any other ranch broker. Aside from the value I bring tot the real estate transaction. I am is very well connected with valuable assets in financing, investments and financial planning. I have seen too many hard working ranchers loose their generational wealth through the death of a family member by not having their family protected. A 1031 exchange may not be the best for your situation. It's not always about the sale today or even that year. I wan't to make sure that the family is connected with the right people to secure their legacy and be able to pass that on or cash it out if that is the direction the family would like to go.
I have clients who I have helped set them up for retirement when they never thought they could afford to retire. Please give me a call. I would love to chat with you about your ranch real estate needs or future planning needs.
Ranch Broker Jerad Cotten 970-640-9461
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