We recently spotlighted a growing trend among investors to purchase farm and timberland in the United States due to the steady value growth such investments provide. We also mentioned how land in Arkansas is currently a hot commodity in the investment world.
Turns out, we’re not the only ones who feel that way about Arkansas. A recent article in the Memphis Business Journal also points out the numerous benefits to investing in Arkansas land, and the reasons some investors are pouring more and more money into the area.
The article mentions that for the last few decades, the Midwest has set the standard for land deals in the United States. However, investors are discovering that land in Arkansas and other states in the Southeast are investment diamonds in the rough thanks to their “great soil quality, water supply and lower price per acre.”
In fact, where land in the Midwest can run investors $10,000 or more per acre, the cost of land in Delta areas (Arkansas, Tennessee, Mississippi, Louisiana) is closer to $5,000 per acre, with comparable return rates as land in the Midwest.
The lower cost per acre means smaller institutions and individual investors have been able to secure large tracts of land at reasonable prices compared to land values across the Midwest. The success of these investors over the last few years has in turn captured the attention of larger investment firms who have “started to recognize the Delta as an asset.”
An additional benefit to owning farmland is the income generated from commodity sales. Rather than simply hold the land and wait for desired appreciation before selling, investors can benefit almost immediately by renting the land to farmers or other partners, who can create a healthy income for investors.
The article made another important point: in the past, landowners often grew their land ownership from a small farm to a healthy tract of land, in some cases reaching more than 2,000 acres. However, many current owners who inherited that land live in different parts of the country and are frequently anxious to sell the land to farmers or investors.
All these factors together – the low cost of land compared to other areas in the U.S., the high value and return on investment, and growing investor interest – work together to create a perfect opportunity in Arkansas for investors of all sizes.
Our own experience confirms this as we’ve been privileged to be a part of many major land purchases and sales in the state.
For more information about how we can help you buy or sell land in Arkansas, contact our team at Lile Real Estate.
Source: Memphis Business Journal