Purchasing Farmland in Southwest Ohio can be a Smart Investment
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.
Buying farmland is becoming an increasingly popular avenue of investment, both among those who aim to develop the land for residential or commercial use, as well as those who intend to lease to tenant farmers. The commercial realty market around Cincinnati post-COVID is attracting residential developers and industrial developments for distributors of many kinds. And it’s not just the growing commerce along the Cincinnati-Dayton-Union KY corridor that’s drawing them – it’s also the quality of the farmland around Cincinnati itself.
Why Acreage in Southwest Ohio is Ideal for Commercial Real Estate 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 – over 80 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 like 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.
Investing in Farmland is a Safe Bet with Low Risks & High Returns
Perhaps just as much as industry is spurring the buying, selling, leasing and building of industrial properties like warehouses, it is also spurring the growth of the agricultural sector. Farmland is at a premium because it is limited. Not every parcel of empty acreage can become a farm; you need plots of arable land.
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.
Holding Farmland Instead of Selling Is an Effective Hedge for Inflation
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.
We’ve Bought and Sold Farmland for the Better Part of a Century
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.
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.
