A famous old real estate chestnut attributed to Mark Twain urges investors to “buy land – they’re not making it anymore.” While the wisdom of the advice as a blanket statement may be open to question, its basic premise that land is in limited supply is obviously true – especially so for agricultural property. This type of acreage, while it typically costs less per acre than developed land, has historically tended to offer better-than-inflation returns, and a good way to diversify a portfolio and protect against market volatility.
Investing in farmland is emerging as a popular and lucrative avenue. It captivates both those with aspirations to develop the land for residential or commercial purposes and those seeking to lease to tenant farmers. The post-COVID commercial realty market in the vicinity of Cincinnati has witnessed a notable surge in interest. It’s primarily from residential developers and industrial distributors. The appeal extends beyond the burgeoning commerce along the Cincinnati-Dayton-Union KY corridor; it is equally attributed to the exceptional quality of the farmland in the immediate vicinity of Cincinnati.
As the allure of investing in farmland continues to grow, the potential for development or leasing to tenant farmers presents a spectrum of opportunities for investors. The strategic location of Cincinnati within the evolving commercial landscape further enhances the attractiveness of these investments. The region’s post-COVID resurgence, coupled with the intrinsic quality of the farmland, positions Cincinnati as a prime location. An area ready for those seeking to capitalize on the dynamic intersection of agriculture and commercial development.
We were founded in Lebanon, OH, along what is now the Cincinnati-Dayton corridor, so Southwest Ohio and Northern Kentucky real estate has always been our focus. We’ve spent decades acquiring the best pieces of empty acreage and farmland available for land development – 90 years, in fact. One of our main drives in our commitment to buying, selling, and leasing the best pieces of commercial land is securing quality parcels of farmland in locations we know will be integrated into the ever-expanding Southwest Ohio/Northern Kentucky commercial real estate market.
Our region’s geology makes developing land easy compared to other parts of the country. The open, shallow rolling hills, and flats around the Ohio River, make regrading land to prep it for building foundations a fairly simple process. This also means factors such as creating access roads and running new utility lines don’t have to be expensive feats of engineering. And because we’re so familiar with the area’s existing empty agricultural plots on the market, we can give you great advice on what a commercial or industrial development project would look like from start to finish.
The forces propelling the buying, selling, leasing, and construction of industrial properties, such as warehouses, are paralleled by a significant upswing in the growth of the agricultural sector. The demand for farmland is soaring, driven by industry-related influences, and it’s reaching a premium status due to its inherent limitations. Unlike every parcel of empty acreage, not all can metamorphose into a farm; the key lies in possessing plots of arable land.
The symbiotic relationship between industrial expansion and agricultural growth underscores the interconnected nature of these sectors. As industries thrive, the need for agricultural resources and land becomes increasingly pronounced. The scarcity of arable land amplifies its value. It creates a competitive landscape where strategic acquisition and use of farmland play a pivotal role in meeting the demands of a burgeoning economy.
This limited availability of usable acreage, coupled with the ever-increasing need for larger crop harvests, make purchasing some or all of a farm a smart long-term investment. Farmland investments consistently outdo other commercial real estate returns – 12% compared to 8%. And when you consider market fluctuations, farmland is more than one standard deviation less than other types of CRE properties.
When you buy farmland and lease to a tenant farmer, you create 3 avenues of revenue from that investment: capital appreciation (7% in 2021), rent payments, and crop yields (investors usually receive a percentage). Agricultural operations are protected from inflation and economic volatility, and as far as lucrative CRE investments go, they’re very low-maintenance.
Investing in farmland can serve as an effective inflation hedge. We mentioned it before as being low maintenance but they’re an incredibly safe investment if you’re expecting economic turmoil. As far as real estate sales are concerned, farmland is extremely responsive to changing economic conditions. As inflation rises, the value of agricultural products typically increases. This is driven by the basic principles of supply and demand. Food businesses and their production are never driven down in our growing world. The demand for food and raw materials remains constant, and in times of inflation, their prices tend to surge. Farmland’s inherent connection to the production of these essential goods positions it as a tangible asset. It even has the potential to appreciate during inflationary periods.
Farmland’s limited supply and long-term demand contribute to its strong purchasing power. With farmland in an investment portfolio, investors can gain from its ability to preserve and enhance their capital’s value amid inflationary pressures. Buying farmland in Cincinnati can add a layer of protection and stability to your holdings.
The farmland market in Cincinnati is currently seeing a surge in demand, driven by both agricultural needs and commercial development. As industries expand along with I-75 corridor and beyond, farmland near Cincinnati is becoming increasingly valuable. Development opportunities for residential, industrial, and commercial purposes further enhance the area’s appeal to investors. Additionally, the region’s agricultural industry remains strong, supported by favorable weather, soil, and local farming expertise, ensuring a steady demand for large tracts of development-ready land.
Right from its beginnings, the Schueler Group of Companies handled farm properties; in fact, we were founded in Lebanon, Ohio in 1935 as a farm brokerage. One of the most noteworthy deals ever brokered by our founder, George Henkle, was the sale of 1,500 acres of arable land which is now the home of the Kings Island Amusement and Water Park. We understand the tax and other legal implications involved in agricultural land deals, and can help you assess the potential of a site as income property or for commercial development.
Purchasing quality, development-ready farmland involves several key steps: Selecting the right property, understanding zoning and land use regulations, and securing financing. Working with a knowledgeable real estate broker, familiar with both agricultural and commercial development, can simplify this process. Consulting with local experts ensures that you can find the best piece of land for your investment or development needs.
View available farm sites, which are included in our residential land listings, and speak to one of our commercial sales agents or brokers to learn more about why you should consider agricultural acreage as the site for your next venture in commercial construction.
