Bourbon Boom Makes Investing In Kentucky A Good Idea
Tangible assets, such as cars, houses, and buildings keep depreciating over time. Among other assets, land is the only one which keeps appreciating the longer the time passes. It is a good long-term investment which doesn’t require a lot of effort to take care. Investing in land is unlike investing in stocks, which needs a lot of monitoring. According to a Yale study, investing in land properties has outperformed stocks in the past 40 years. In the meantime, you can use the land for other purposes.
Buying a land depends on your purposes and future plans for the asset. For instance, if you want to buy a land where you can build your dream house, you should buy residential land. When you’re looking for a place to start your business, you can buy a lot in a commercial or industrial land, depending on your business.
But if you’re looking for a land where you can put some of your money for future appreciation, then you might want to try looking for farm lands for sale. A farmland is a limited resource, but it has a higher rate of return than any conventional investment, according to John Farris, the founder of LandFund Partners.
Of course, choosing a farmland to put your money into is a big challenge, but a lot of investors are investing in farmlands around Kentucky, and it’s not hard to see why. You might want to look for land for sale in Kentucky right now. Investing in lands around Kentucky has been one of the most profitable investments, according to Brian Luftman of the American Farm Investors. This is partly because Kentucky lands have water resources that aren’t drying up, which means that maintaining a crop without worrying about irrigation is possible. However, the main reason is that there is a growing market of bourbon, where the raw materials came mostly from Kentucky.
According to CNBC, the sales of Bourbon grew from $252 million to a staggering $3.4 billion last year. The reason for this growth is the rising appreciation for premium spirits among the millennial drinkers. Because of this, Michter’s Distillery’s president Joseph Magllocco stated that he doesn’t even have to worry about the ongoing trade wars because of the higher demand of the American whiskey.
How would investing in Kentucky (in relation to the booming Bourbon industry) be profitable? In addition to the gains from the land appreciation, tenant farmers who are using the investor’s land for farming of the necessary crops are paying for the usage of the asset. In return, the payment becomes dividends and serves as another source of income for the investor. The dividends can be treated as a passive income and can be put to other uses. You don’t even have to see the land personally in order to start earning from it.
According to Luftman, a resident from Kentucky interviewed by Greg Kocher of the Herald-Leader, 40 percent of the investors live in Kentucky while 60 percent are from other states.
“Almost all my clients are investors who have a diverse investment portfolio, and they think of this as the illiquid, risk-free part of their portfolio that is set-it-and-forget-it,” Luftman explained in the interview.
“We’re here in Kentucky buying land within 100 miles of here, and we’re trying to create a long-term view of how to sustainably farm this acreage for many, many decades,” he added.
There’s a lot of available Kentucky for sale right now. One of the lands available for grabs is 46 acres of land for $69,950 in Metcalfe County, Edmonton, KY. If you want a larger land, 286 acres of land is for sale for $499,950 along the Reynolds Station. There are also ranches on sale if you want to get one. There are a lot of options you can choose from depending on your budget or the size of the land you need. There’s a lot of options from different counties so you don’t have to worry if you want to buy a land from a specific county.
In addition to Kentucky’s corn produce (for the production of bourbon), tobacco, soybeans, wheat, barley, tomatoes, apples, and grain sorghum are also grown in the area. There are also ranches that produce livestock products from horses and beef cattle.
This is so helpful! It’s so important in real estate to know what the current trends are!
You had me at bourbon! LOL Sounds like a lot of these booms require a real awareness of local trends and markets. Thanks for sharing!