Contributor: Jesus Martinez-Aviles
Editor: Dave Price
“Buy or Bury.” That’s how Brad Griffin sees the competitive dynamics of land investment. Griffin is marketing director for AcreValue, an Ithaca, New York-based company that provides information including land sales, ownership information, and crop history.
Act quickly and buy that property you seek. Or delay and get buried by a competitor.
If only one or two percent of available farmland transfers ownership each year (and a portion of that involves private sales that never hit the open market), that further elevates the competition for investors or landowners looking to expand. As Griffin puts it, if one individual investor doesn’t act on a property, someone else will.
RELATED: The National Council of Real Estate Investment Fiduciaries (NCREIF) Timberland Index shows the highest timberland market value per acre is in the Northwest, which is nearly twice as high as the South. See historical trends here.
Griffin believes the demand for the small portion of land that becomes available at any given time underscores the importance of forming strategies with business partners.
“To stay in front of the competition and to outpace them in business, that means to constantly maintain the leading position. It means that in the market, to be able to surpass folks, your performance and your growth need to be better than those other businesses in the same industry,” Griffin said.
You get to know of potential partnerships and competitors while sharing resources that can benefit both parties. And at the very least, you get to know more about the market where you want to invest.
"The goal is to be the forefront player in the industry, to set the tone, to set the terminology, the messaging, and ultimately lead from the front. Set the pace that others are going to follow. Don't be chasing from behind,” Griffin said.
RELATED: Factors including whether you want to live on the land you buy, what your tolerance for risk is, and how available labor will be for your operation are among those to consider when investing in land. Smartasset.com offers a breakdown of various determinants here.
Elevated interest rates can be a competitive advantage to those for whom borrowing to buy land is not necessary. “Interest rates are at the highest they’ve been since 1981. They are expected to remain somewhere between 5.25% to 5.5% until the middle of 2024, causing buying activity to drop 30% over the past 18 months,” Griffin said.
Regardless of your overall wealth, you want to invest resources into yourself. Making yourself more productive is a way to “increase efficiency,” Griffin said.
“You have to leverage new technology. It's going to get information to you faster, or it's going to allow you to do more with less,” Griffin said.
Managing your company's time according to the market, and trying various platforms are ways to use your time wisely. Business owners need an urgency to want to stay ahead. It is not enough to just to plan it out.
Griffin said that investors also need to stay updated on market and industry trends. Ideally, they access that information before others.
“We live in a fast driven society. We want everything instantly. And our information should be no different. We want to use data that is better structured for your needs,” Griffin said.
He also stressed the need for “after action reviews.” Analyze the aftermath of an investment or business decision. Think critically about the outcome. Griffin says to consider these questions:
Why did you do it this way?
How could you do it better next time?
Why do we keep doing it this way?
Is this the best way that we can do it?
How can we do it better?
It’s a never-ending commitment to “stay learning.” Suppose you are looking to invest in land. What resource would you use to navigate the market value? How many acres do you want to buy? What about the geographical aspects and natural aspects? All these areas may be considered through Acre Value’s Market Dashboard.
“It allows me customizable filters on the left-hand side to filter out all the very specific data that matters exactly to me, and it's always changing in real time. I'm always staying up on top of the average sales price per acre by quarter. I'm seeing how large my investment is growing,” Griffin said.
NOTE: AcreValue Marketing Director Brad Griffin led a breakout session on staying ahead of the competition during the 2024 Land Investment Expo in Des Moines, Iowa.