When one thinks of investing in land or commercial property Alabama would not usually be at the top of the list. Yet it is one of the few states that can offer real estate at a reasonable rate that is still attractive to investors. Whether you are looking to farm, build a hunting lodge, start your own poultry farm or invest in timber this is the state for you.
Although Alabama is considered one of the poorer states in the Union with a population just under five million, it opens the door for investors and businesses looking to expand into other areas and taking advantage of the lower cost of living. The state’s quality of life is a major draw for business executives with terrain ranging from mountains in the northern area of the state to beautiful beaches in the Southern portion. The climate is mild, the cost of living is low with the state having the lowest electricity cost for users, according to a recent article in Global Direct Investment Solutions.
Investing in timberland has been proven particularly profitable to investors especially during bear markets. Alabama’s forest grows at a rate between two to eight per cent a year. Timberland return on investment has gone up roughly 15% per year, compared to an annualized return of just 9.6% for the S&P 500, according to the National Council of Real Estate Investment Fiduciaries (NCREIF). With over 50,000 square miles of land and a population located mostly in the metropolitan areas, there exists plenty of opportunity for this type of investment.
One advantage to timber is that it does not need to be cut at the end of the growing season and will continue to mature and increase in value until the owner decides to harvest. Alabama ranks second in the United States for forestland with over twenty-two million acres.
For those looking for farmland it is also available. Good farmland can earn a two to four per cent annual cash-on-cash return compared to a yield of less than one per cent on a six-month treasury bill. Let’s face it, farmland is limited in the United States with over a million acres of farmland per year being converted to housing development, malls, commercial and industrial property, said an article found in Land in Alabama for Sale. As population in the United States tends to increase, farmland on the other hand is decreasing. On average, farmland has a long-term appreciation of five to six per cent annually. As farmland production continues to decrease, appreciation of the remaining farmland will certainly increase.
Land has long been a hedge against inflation while stocks and bonds typically lose value with inflation. Land investment is not a get rich quick scheme but it is a definite way to diversify your investment portfolio.
So, if you are looking to diversity that portfolio, or invest in timber, start a farm or build a premier hunting lodge you have to consider Alabama as a great land investment opportunity.
For more information on Land for Sale in South Alabama, contact Kenny King at 334-372-1992.