Is Land a Better Investment than Stocks?

Do you have a favorite song? We do. There's a country song by Jordan Davis called "Buy Dirt" that we love. The words say, "if you want my two cents, of making a dollar count, buy dirt." It continues with "you can thank the good Lord for it, 'cause he ain't making any more of it." We agree. That song speaks to us because land is a finite resource.

We work with people and families to help them realize their land-owning real estate dreams. So whether you want to buy, sell, develop, or manage the property, we're here to help you secure your future.

In terms of investing, owning real estate is a lot different than owning stock. Land is a long-term investment. Unless you are lending parcels of land to farmers or investing in timber, you won't see a return on it until you sell. But if you invest in raw land located in a growing area, it is highly likely to increase in value, as it will be needed for growth. Which will make it much more valuable, returning more money than you initially put into it. Let's talk about the possibilities of raw land.

What Are the Different Types of Land Investments?

When most people think of real estate investments, residential or commercial property usually come to mind. This is because many real estate investors are looking for passive income through investments in rental properties. However, the reality of it is that most people don't necessarily want to be property managers. As it makes the income a little less "passive."

Meanwhile, investing in real estate like timberland, hunting land, and farm land can provide you with that feeling you can only get from actually owning physical land. It is a tangible asset that you can experience directly. You can walk on it and hold the dirt in your hand. You can experience it with nearly all of your senses. And you have the ability to generate ongoing income from direct farming, leasing to farmers, hunting leases, and/or selling timber to saw mills and pulp mills. (You can learn more about investing in timberland on our "Investing in Pine Plantation" page.) But, best of all, you can do all this while still enjoying the land and experiencing the satisfaction of land ownership.

But, for many investors, a Real Estate Investment Trust Exchange Traded Funds (REIT ETF) is a great way to have a real estate investment portfolio that is widely diversified. They are usually comprised of everything from residential property developments to retail, office, industrial, and even public storage developments. This is very similar to other diversified investment options like a mutual fund for the stock market. But with this way of investing in real estate, you don't actually get to own or enjoy the land yourself. So it can be an issue for people who want to experience owning raw land.

We can work with you to determine the type and size of rural real estate that would be best for you in terms of initial investment as well as potential return on investment.

Things to Consider

There are many things that people new to investing in real estate may not be aware of that can affect them. We can work with you to navigate through concerns and issues, including possible legal considerations. There may be land-use restrictions, mineral rights issues, water rights, or land easement clauses related to a property.

You'll want to understand who has access or rights to the property before buying it. You'll also want to know if it lies within a flood plain. To better understand these things, we can help you access and understand the land deed associated with your desired property. You'll also need to understand your potential access to utilities, as well as property taxes and the costs that you could incur regarding each. We can help you cover all of the aspects that could be associated with a potential land real estate purchase.

Looking Out for Capital Gains Taxes

Ideally, you want to make a capital gain on any investment. But an important consideration to take in to account is the taxes you will face if you earn a profit from selling the investment. And, unfortunately, selling stocks usually results in a capital gains tax. However, real estate investors can defer capital gains if another property is purchased following the sale. This is what is referred to as a 1031 exchange in the tax code. Information like this is just another added value to a relationship with Tutt Land. It's just one of the many ways we help our clients.

You don't know what you don't know. A thorough knowledge of these kind of things is what we bring to the table. Let us help guide you through an industry we've been working in for more than seven decades.

Real Estate Investments vs. Stock Market

Typically, when you hear the word "investing" you think about the stock market. And that is understandable, since over half of the U.S. owns stock. We understand that farmland is not as popular of an investment: Less than a single percent of Americans own farmland. This would make sense though, as it is much faster and easier to invest in the stock market than it is to buy land.

However, this is changing. Investing in real estate tracts meant for farmland, timberland, or hunting land is becoming a much easier prospect for investors who want to diversify their investment portfolios. These types of land investments are a different type of asset class. But it is one that is beginning to gain a lot of momentum.

When you realize that the returns are comparable to the stock market but with a lot less risk, it becomes a much more attractive investment opportunity. In fact, many famous investors have been buying large tracts of land lately, including Bill Gates. It's a great path to diversifying into more alternative investments.

Some Investments Are Safer than Others

Buying a piece of land is a solid investment. If you don't plan to develop it, then your expenses pretty much end there. There would be no mortgage payment or utility bills to pay. And property taxes are traditionally very low in the Southeast. So, putting money into vacant land is a low maintenance investment and can be especially profitable in a growing area.

Is It Better to Invest in Land or Stocks?

Real estate and stocks as asset classes have both been great investments over the years. Choosing between the two all comes down to your personal preferences. You have to consider the amount of money you have to invest, your tolerance for risk, and when/how you are looking for returns. A lot of times, these factors can vary greatly depending on where you are in life. Let us help you determine your risk-benefit analysis regarding an investment in land.

What Are the Pros and Cons of Real Estate?

With the rise in popularity of HGTV, Americans have seen a change in real estate. From knocking down walls for open concept floor plans and house flipping to creating rental property in order to generate passive income, real estate has changed a lot over the past decade. And real estate prices have followed suit, with home prices going up and houses being purchased in bidding wars.

But real estate is not an easy or quick way to make money. There's no quick in and out. Land is a tangible asset that is a longer term investment. It can't be liquidated or cashed out quickly. It's also something that requires a lot of research upfront, to make sure the land is a good match for what you're looking to do with it.

The pros to real estate investment are that it can provide a hedge against inflation, has tax advantages, is a finite resource, and can provide income via farm leases and timber or hunting leases. There are a lot of aspects that a buyer will need to consider. But we feel that there is no greater feeling than owning land. And we're here to help guide you to experience that same feeling.

What Are the Pros and Cons of the Stock Market?

One of the advantages of the stock market is that it doesn't require as much money to get into as land. And, unlike real estate, you can buy and sell stocks more quickly and easily. You can also create a diversified stock portfolio more easily.

But the con to stocks is that they are volatile, which can mean a more risky investment. And, you have to think more about capital gains tax as well. Stocks can be easier to get into with less money, but it is going to require a greater monetary investment to see your holdings grow in a significant way.

Again, the choice comes down to the individual investor. What are you looking for in an investment and what do you want your money to do for you? If you're thinking about a real estate investment in a rural area, we'd like to talk with you about your options.

Rural Land As A Retreat or Refuge

Many of our buyers that we work with are seeking a place to escape to on the weekends. Land to roam, hunt on, or even treat as a personal refuge. Rural land tracts can even provide you with natural food and water sources as well, should the need arise.

In having a piece of land, you can know there's a place you can always retreat to if needed. With so much unrest in our society these days, it could be a place to go to that is "off the grid" if needed. Or simply a place to find peace and serenity. A little piece of the great outdoors to call your own. Your own part of nature.

If that's the type of real estate that you'd like to own, then reach out to us. We'd love to help you realize your rural real estate dreams. We can help you invest in land that can pay dividends now and for generations to come.

How We Can Help

Unlike real estate in the suburbs or purchasing a rental property, the market for rural land is a whole different ballgame. Buying land for timber, farmland, or hunting land is a sound investment. We feel like the real estate market is a better investment than playing stock markets. A stock portfolio can fluctuate based on the economic cycle. Land gives you a little more financial freedom in that it is quite stable.

Listing or buying rural real estate with us is one of the best decisions you'll make. We've been in this business for more 70 years, and we are still going strong. Our experience in developing, managing, and owning rural real estate can't be matched. So, if you're looking for a good real estate agent, we've got a team for you to choose from. We can help you navigate through the uncharted waters of rural real estate investments.

We are a real estate and land management company providing land brokerage, development services, and timberland management, as well as residential and commercial properties. Use our contact page to get in touch or give us a call at .