Buying and owning hard assets like farmland and timberland has been a popular investing method for many years. Unfortunately, it is too costly and difficult for the average retail investor, so it is often left to those who have access to a significant capital base. For those who can invest in land, it can often be one of the best investments you will ever make, as the potential for profit is quite large [for more commodity news and analysis subscribe to our free newsletter].
Why Own Land?
Beyond the usual arguments for owning real assets, like keeping up with inflation and other factors, there is a lot of strong history behind land ownership. Farmland, for example, saw and average price increase of 4.8% between 1987 and 2004. That figure jumped to annual gains of 15% from 2004 to 2008. While the value of land may not increase every year, historical data certainly positions a trend in favor of an ongoing jump in value.
It certainly won’t be the most liquid asset in your portfolio, but those who are smart about their purchases can often flourish. Timberlands is another one of the most popular buys, as this commodity has been performing well for quite some time. The price of timber has risen by an average of 5% for the past century, and those gains include strong performances during some of the worst markets in U.S. history. Those fortunate enough to be able to purchase productive landplots have watched it pay dividends in the past few years [see also Timber Set to Soar Says Jeremy Grantham].
Below, we list the top five individual private landowners in the US.
- John Malone: Chairman of Liberty Media. 2.2 million acres.
- Ted Turner: Turner Enterprises. 2 million acres.
- Emmerson Family: Sierra Pacific Industries. 1.8 million acres.
- Brad Kelley: Entrepreneur. 1.5 million acres (though he insists it is more like 1 million).
- Irving Family: Controls Canadian forestry company J.D. Irving. 1.2 million acres.
Disclosure: No positions at time of writing.