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Many people keep a close and watchful eye on land values, but perhaps nobody watches more closely than farmers and farmland owners. 
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This is because, in many cases, land is an asset that should be treated like a valuable investment. In fact, land is often a worthwhile <a href="https://farmtogether.com/learn/blog/5-benefits-of-investing-in-farmland">investment</a> when compared to more traditional investments, such as stocks and even gold. It can add diversity to any investor’s profile and has a history of providing high yields and return. Plus, it’s typically more stable than other common options. 
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But more than anyone, farmers understand that what makes land valuable also generates revenue. Land is also a worthy investment for farmers because it will very likely maintain its value over time, resulting in a favorable result when they decide to sell or hand down to future generations.
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However, it is important to always know the value of your land and have a solid understanding of what can affect that value.
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<h2>What is land value? </h2>


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It may go without saying, but we should probably state up front that land value is not just what the land is worth. The value of any <a href="https://www.investopedia.com/terms/l/landvalue.asp">improvements</a> that have been made to the land is also factored into one lump price or value. 
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Location, amenities, and unique features or qualities of the land, whether real or sentimental, are also part of the equation in determining a dollar figure.
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<h2>Land values are relatively stable</h2>


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Land will very likely remain a good investment for both farmers and investors alike. That is because, over the years, land values have been relatively stable when compared to other forms of investment.
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There are several reasons for this, one being that the <a href="https://www.fool.com/millionacres/real-estate-investing/rental-properties/how-invest-land/">amount of land</a> can’t be changed. There will always only be as much land as there is now. As for farmland, there could be even less due to continued development.
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In addition to this is the fact that the world’s population is only going to grow for the foreseeable future. This means the value of agricultural land will be relatively protected because, well, everyone still has to eat and all that food still has to be produced.
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<h2>Factors that affect farmland value</h2>


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There are many <a href="https://www.advantagerealtyandlandmanagement.com/2019/11/30/these-are-the-7-issues-affecting-farmland-values/">factors</a> that hold an influence over whether farmland and rural land values increase, hold steady or decrease. There are other, more complex factors that can send the price of land one way or the other, but farmers and landowners should especially be aware of each of these.
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<strong>Low farmland availability</strong>
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This can include the supply of farmland in an area, or how much is available to buy. In many areas, the supply of available farmland is low, which helps keep values high. 
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Now, if there should be a sudden surge in available farmland, then it’s likely that prices could trend down.
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<strong>Low interest rates</strong>
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Low and falling interest rates are another factor that help give land values a boost. Low interest rates mean more favorable loans that many farmers and landowners are most interested in. 
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Interest rates are also one of the factors that should be monitored over time. If rates start to increase, then loans will not be as attractive and values may shift as a result.
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<strong>Farm income and aid</strong>
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It’s no secret that <a href="https://www.fb.org/market-intel/is-farm-income-really-up">farm income</a> has been on a bit of a roller coaster in the past decade. While overall farm income has looked as though it is on the rebound, a lot of that has to do with federal aid.
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Still, in a general sense, farm income has been on the rise in the United States. In recent years here <a href="https://www.advantagerealtyandlandmanagement.com/2019/07/31/these-are-the-top-factors-influencing-todays-farmland-values/">locally in Iowa</a>, strong crop yields have led to better incomes. Land that performs better and can provide better returns will always fetch a higher price if ever sold or put up for auction.
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<h2>How farmers and landowners can use land value</h2>


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Land value is critical information for landowners because it can inform the many decisions that they may make, including not only whether to sell and for how much, but also how much they could lease it for. 
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However, it’s always a good idea to get an official <a href="https://www.advantagerealtyandlandmanagement.com/what-is-your-land-or-property-worth/">appraisal</a> from a third party to be able to back up any asking price, whether as part of a sale or rental agreement.
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<h2>Market price vs. market value</h2>


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It’s important to realize that land value and its actual selling price may not always be the same. An appraisal will try to determine, in the appraiser’s opinion, the <a href="https://www.investopedia.com/articles/realestate/12/real-estate-valuation.asp">market value</a> of the land and property in question. 
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However, the market price may end up being higher or lower than the value. It’s true that the appraiser’s market value is an assessment of the land that tries to get as close to what the land would sell for on the market, but again, this may not always be the case. 
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At the end of the day, there can be many factors that could create a disconnect between market price and value, including pressures faced by either the buyer or seller.
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<h2>Get land appraised regularly</h2>


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It is often the case that an appraisal is only as accurate as it is timely. Factors that go into determining land value can change – and quickly. 
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An appraiser will use current information available at the time of their assessment to determine land value. Once that information is outdated, it may no longer be accurate. This is why most appraisers will use <a href="https://www.landthink.com/four-tips-for-understanding-land-value/">180 days</a> as the acceptable age of an appraisal, according to Landthink. Any appraisal older than that is likely too outdated to be entirely accurate.
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<h2>Learn what your land is worth</h2>


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If you need to learn what your property or land is worth, then do not hesitate to reach out to us at Advantage Realty and Land Management. Our experience working here in Northwest Iowa in land management, crop consulting and real estate services gives us a clear understanding of how to price land.
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Get the Advantage on your side today by getting a <a href="https://www.advantagerealtyandlandmanagement.com/what-is-your-land-or-property-worth/">free estimate</a> of your land’s value.
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