My Grandfather was a share-cropper. In Missouri. Almost one hundred years ago.
Actually before he was a share cropper, he worked in the coal mines in Illinois. Hated John L. Lewis and the union, but that’s another story.
Looking for a better life, my Grandfather was able to make a deal with a land owner in central Missouri. He and his family could live in the old house on the property, farm the 360 acres and share the profits with the land owner.
Then something unexpected happened. We call it the Great Depression. The property was repossessed for unpaid taxes and unpaid mortgage. So, now my Grandfather was farming for the bank.
Soon after that, the banker drove out to the farm and offered the 360 acres to my Grandfather for $5,000. Total. “You already live here John. You’re already farming it” he said. “Just take ownership. Take it off our hands”
My Grandfather turned him down. The idea of owing $5,000 was more than he could handle.
The banker came out a second time, and a third. Finally my Grandfather agreed. That land today is worth about 1.8 million. It was sold years ago when my Grandparents passed away.
This story from my history got me thinking about something. What if someone took Will Roger’s advice to “Buy land. They ain’t making any more of the stuff” , and held it until today. What would it be worth, adjusted for inflation and taxes.
Was Will Rogers correct with his home-spun investment advice?
I don’t know the answer yet, but let’s think about this.
The land itself does appreciate over time, however, even if you just let it sit there and do nothing, you still have to pay those county taxes every year. It may not seem like much, but year after year you still have to pay it or lose the land.
And then, you better keep some kind of insurance on it in case someone trespasses on your land and gets hurt or killed.
Also, if and when you sell it, you will pay capital gains taxes on it.
So, I’ll keep searching for a more exact answer, but meanwhile my answer is that the real value of land is the value it brings to your life. You can grow stuff on it, raise a family on it, get away from the daily grind on it, and if you happen to own land in the path of growth, you might just get a heck of a good financial return on it.
But then you need to find some more land for your life.
If you have land to sell, contact us. We’re buying.