The State of the Land Market

Most entering into large transactions analyze the state of the market before doing so. Right now, the land market remains quite strong. People are buying and selling land.

With the recent election over, it’s picking up even more. Without a doubt, the market is trending upward.

“I continue to see increases in consumer confidence and buyer activity, especially with the election behind us,” said Jake Meyer, a Whitetail Properties Land Specialist in northeastern Mississippi. “Considering the past two to three years, I think buyers are more confident in where the economy is projected to head toward.”

Of course, the current debate centers on interest rates. They’re higher than in recent years. Even so, it’s still a good time to buy.

“They seem high compared to where they were just a few years ago,” Meyer said. “Historically, interest rates aren’t that high relative to where they’ve been the last 20-30 years.”

Meyer says that, relatively low interest rates paired with a low supply of land listings, is leading to increased buyer activity. Currently, there is no shortage of land transactions occurring.

As a result, investors are increasingly learning the values of residential property. It continues to increase in popularity. So do other land investments, such as row crop land, timber-centric tracts, and more.

“From a macro perspective, buyers are becoming more educated on the value of having these types of assets in their investment portfolios,” Meyer said.

Interestingly, this year and beyond, some experts expect a shift away from riskier real estate investment types. One example includes large office spaces. As more workers shift to hybrid- and work-from-home workflows, more commercial buildings are becoming vacant, especially in larger cities. This should continue to fuel increases in residential and raw land prices.

Despite the decline in urban office space use, the overarching collective of raw land, residential property, and even some commercial types, remains on the upswing. Currently, consumer confidence is high.

“Overall, 2024 was a great year,” Meyer said. “Whitetail Properties had its best sales year yet. The momentum I’m seeing, plus what 2024 was, I envision an even stronger year for 2025. The strength of our brand, and the industry, continues to hold strong.”

Examining Personal Finances and Setting Goals

Before choosing a real estate direction to target, potential investors should examine their personal and financial goals. Study risk versus reward, determine available capital, and set goals.

Of course, most investors seek out passive income opportunities. These are found within the land types mentioned above. That said, others might walk a different road.

Perhaps the property purchase is less about passive income opportunities. Maybe it’s more about hands-on potential. If so, doing something you enjoy decreases odds of burnout. Spending time working on enjoyable tasks increases odds of success, too.

So, find a property that’s highest and best use aligns with your plans and skill sets. Determine what type of work it’s compatible with and set up for. Let that be your compass.

“Try to align your passions with the land,” Meyer said. “How might you be most interested in improving and utilizing the land? Ask yourself, do you consider yourself a farmer (i.e.: grain, livestock, etc.)?”

Perhaps you’re planning to homestead the property. You might choose to raise chickens and sell eggs. Or, maybe you want to raise goats, and make it a hobby farm. You could even grow a pumpkin patch.”

Whatever the decision, starting by examining finances, setting goals, and finding real estate that aligns with these factors, offers greater chances of success.

Analyzing Residential and Commercial Infrastructure

When buying land from an investment standpoint, it’s important to study each variable that can affect the property value. Timber prices within the region, crop prices, and other commodity prices, drastically influence land values. So do residential and commercial infrastructures.

“Gauge its current and long-term projected values,” Meyer said. “Study its infrastructure, such as residential or industrial infrastructure, in that area. Are people moving to, or leaving from, that area? This is a good indicator of future value.”

Inquire whether businesses are investing in the region, or not. If businesses are pushing into the area, land prices should appreciate quite well. Locations with business-friendly environments, and good economies, are best positioned for great land prices. If businesses are leaving, that’s not something to ignore.

Taxes also factor in. Zooming out to the countrywide view, states with increasing tax burdens on residents tend to be states where people are leaving, rather than moving to.

“I’m a land specialist in Northeast Mississippi, but I’m working with multiple buyers from across the country wanting to move to the South,” Meyer said. “That’s largely because of its relatively low cost of living, lower taxes, etc.

“For example, here in the Golden Triangle of northeastern Mississippi, you have West Point, Starkville, and Columbus,” Meyer continued. “There has been major economic development (including industrial) in this area. That’s bringing a lot of workers in to build this infrastructure. It’s created a significant demand for short-, mid-, and long-term rentals in this area. This, and accommodating these workers, has greatly increased the prices of these types of properties.”

Meyer says that, as interest rates rise, cash flowing effectively requires even more strategy. If you plan to cash flow the property, and otherwise optimize your return on the asset, it comes back to infrastructure. Lower supply and higher demand fuels it even more. Find these areas.

Real Estate Investment Types to Know

Real estate might seem singular, but it isn’t. There are numerous real estate investment types. According to Meyer, many of these are seeing big gains over time. Projections predict continued growth.

Raw land, recreational properties, timber investment, row crop land, and more, are all becoming increasingly popular. Each of these can be great investment assets.

“There are different categories of land investments,” Meyer said. “There are even different types of returns, such as crop return (i.e.: cash rent), timber return (timber harvest), mineral return (i.e.: gravel pit), other mineral rights (i.e.: oil or natural gas), etc.”

In addition to identifying these types of returns, also watch for conversion opportunities. Transitioning the land into a new investment type can be a viable play.

For example, as more offices remain vacant, some are being converted into apartment rentals. Others are being transformed into other uses. Fortunately, office space isn’t the only type of commercial real estate.

Commercial Properties: Meyer says there’s an increasing evolution of people fleeing cities, and that they’re moving out into the country. Office buildings used to be the staple of the commercial property market. Today, these are increasingly becoming liabilities. Instead, consider pursuing other commercial options.

Single and Multi-Family Properties: Meyer says that, if there’s a single or multi-family residence on the property, there is residential rental income. Thus, single and multi-family properties are oftentimes good investment opportunities.

Agricultural Land: As the world population continues increasing, food production must rise with it. Therefore, pasture for livestock, hay fields for feed, tillable acreage for row crops, and other agricultural disciplines, can create viable real estate investments.

Development Land: Urban sprawl oftentimes drives up land prices. Incoming factories, subdivisions, and other developments drive up prices of surrounding areas. Thus, having the foresight to secure properties before it becomes apparent to others is a significant advantage.

Recreational Land: Some buyers choose recreational lands. Hunting, hiking, fishing, water sports, and other outdoor activities require land access. Oftentimes, people prefer private landownership for these recreational adventures.

Timber Land: The timber market varies from one place to the next. That said, in most areas, it’s a stable sector. Thus, it’s a staple investment category. Land with marketable, or near-marketable timber, are usually excellent investments.

Other more obscure investment types exist. Regardless of the type chosen, assess your financial footing, and measure your risk tolerance, to determine appropriate moves.

Real Estate Investment Strategies to Consider

There are numerous investment strategies to consider. These are routes in which to gain potential traction in the real estate arena. Progressing through available tools increases odds of a successful acquisition.

Of course, the goal is buying land that continues to improve its land valuation over time. To that, do your best to gauge whether a property is likely to increase in value (generally likely), decline in value (usually unlikely), or remain stagnant (relatively possible), over time.

Analyze Property Best Use: Meyer says it’s important to assess a property’s highest and best use. That helps you understand what the property is, and therefore, its value. Most properties can’t be used for just anything, and thus, potential buyers should gauge its capabilities, limitations, and overall potential. This impacts value and growth over time.

Leverage Technological Tools: Artificial intelligence continues to penetrate and dominate industries across the globe. The land market is no different. Therefore, it’s important to leverage all available technologies. Use these to find land listings, determine best fits, and more.

Scour for Good Deals: Using faster methods to find properties, don’t forget to search for good deals. Although less common, it’s still possible to scout for better opportunities.

Find Mineral-Rich Properties: It’s difficult to know if a property offers minerals. That said, finding a tract that does is sure to be a boon.

Buy with Water Rights in Mind: An increasingly popular trend is buying lands with the water rights in mind. In time, water might be a scarcer commodity. Thus, purchasing land with that characteristic is a long-term, but great, approach.

Locate Emerging Markets: As cities and towns continue to be built, it can be profitable to locate emerging markets. Then, with that in mind, select real estate within the region.

Discover Passive Income Opportunities: Passive income is the foundation of increasing wealth. Establishing multiple revenue streams can be done with property types outlined above.

Buy and Flip: With the right market, buying to fix and flip is a legitimate route. It requires getting the property at a deal, completing the appropriate steps, and more.

Buy and Hold: Perhaps the best real estate strategy is buying a promising tract of land and holding onto it. This allows the property to appreciate in value, increases odds of an eventual capital gain, which improves net worth.

Reinvest Profits: Owners of properties that generate income might consider reinvesting profits back into the initial property mortgage, or into a new one.

1031 Exchange: Those buying and selling land in an effort to upgrade their portfolio should keep the 1031 Exchange in mind. This allows sellers to defer capital gains taxes, and instead, use that money for a slightly bigger land purchase. Ultimately, you can defer taxes, and instead, immediately re-invest that money into a bigger real estate deal.

Completing Due Diligence and Implementing Risk Management

Anyone considering a land purchase should meet with a financial advisor. Sit down with them, go over your finances, and determine a reasonable allocation of resources. A good financial advisor studies the ins and outs of a potential purchase, and can provide information as needed.

Next, implement risk management. Do your due diligence. Inspect the property in person. Meyer says that software predictions are reliable, but it’s crucial to see things for yourself, too. Walk the entire property. Ensure there are no access issues and complete all due diligence.

“Before making an offer, know exactly what you’re purchasing,” Meyer said. “If you’re new to it, or even a seasoned buyer or investor, it can’t be stated enough to find an experienced buyer’s agent that does this type of work all day every day. They can guide you through the process. That’s hands down my foremost recommendation.”

So, all who are planning to make a real estate deal should consider finding a reputable buyer’s agent. Contacting a land specialist with Whitetail Properties is the way to do that.