Florida Land Investments
This current opportunity is for a stable, alternative investment in recreational hunting property with potential for sustainable timber and lease revenues. This asset class is a hedge against future inflation, is renewable, an investment in the stewardship of a critical ecosystem and it is sustainable. The exit strategy is the sale of the property in the future as an improved, high quality recreational or plantation style property with sustainable revenues and a track record of management by a professional team of foresters and biologists.
Currently, the land market is seeing increased activity but is still well below its historical highs in price. We believe this asset class will continue to be attractive to high net worth individuals who want to invest in a prestigious, high quality property for enjoyment, legacy and return. The opportunity to offset management cost and derive return through intelligent and efficient management is especially important, and possible, if the right property is located and managed well. The potential for significant upside through asset appreciation if market conditions improve coupled with the enjoyment and use of the asset during ownership differentiates this asset class from most others.
Given the current timing in the market cycle opportunity exists for appreciation, not only in the dirt but also through the growth of the existing timber and in the recovery of the timber market itself. Location is also a primary factor to the appreciation of these assets and certain parts of the southeast will excel compared to others as the market returns.
Key qualities in these properties are:
- Distinguishing characteristic or unique feature
- Soil quality
- Water features
- Proximity to other similar and like-managed properties
- High percentage of usable acres
- Ability to produce sustainable income from multiple sources
- Acquisition at proper time in market cycle and discount to real value
As we enter the Summer we came across an interesting article. It discusses the many benefits of owning real estate and the reasons to use professionals for advice and consulting which is something we would agree with. It also advocates for recreational land as a sound investment which we would also agree with them on.
However, it does briefly refer to land as a hedge against inflation, which is a commonly used phrase, but might warrant expanding on a little further in light of the current circumstances. During periods of inflation the dollar loses its purchasing power which is what people care most about. Over time, the same dollar buys less and less of a certain “real” item. Therefore people have an increasing appetite for “real” assets in times of expected or realized inflation. Real Estate is a favored, tangible asset during these times because it can create income over time, can be used for enjoyment, can appreciate but most importantly it pays you back when you sell it in inflation adjusted dollars. The inflation adjusted return, if no other return occurred, would be zero but compared to cash the relative return would be desirable. Because of inflation it would take more dollars to buy that same asset, you had purchased earlier, today. In other words it maintains its purchasing power, therefore the hedge has been effective against inflation. Hopefully some of the other benefits discussed here and in the article have also occurred and that is an additional benefit. Solomon said ‘wisdom comes with many advisors, so we believe the chances of these additional benefits occurring are increased with professionals assisting landowners in their purchase decision and management.”
Contact Live Water Properties to learn more about properties that meet these criteria and how we can provide the trust and expertise necessary to acquire and manage them effectively.