Why Rich People Buy Land Now

Summary

Wealthy individuals are increasingly investing in land for various strategic reasons. The script reveals that land, particularly farmland, has been the top appreciating asset class in the U.S. over the past 80 years, averaging a 12% annual increase. It offers safety of investment, low maintenance, potential cash flow through leasing, and scarcity value as land is finite. Additionally, owning land in growth areas can lead to exponential value increases, and water rights can provide a significant advantage as water scarcity grows. This summary captures the key reasons why the super-rich are buying land and why it might be a wise investment for others as well.

Takeaways

• 💼 Wealthy individuals are increasingly investing in land as a part of their portfolio for various strategic reasons.
• 🏞️ The top 100 landowning families in the United States have seen their land holdings increase by 50% since 2007.
• 📈 Land, particularly farmland, has historically been the best-performing asset class in the U.S. over the last 80 years, appreciating on average by 12% annually.
• 🔒 Land is considered a safe investment due to its consistent appreciation over time, even through economic downturns.
• 🌾 Low maintenance is a key advantage of land ownership, as it requires minimal upkeep, especially for large acreages.
• 💰 Land can generate cash flow through leasing to farmers or other users, providing a passive income stream.
• 📊 Scarcity of land is a significant factor driving its value, as no new land is being created, making strategic land holdings in growth areas highly valuable.
• 🌳 Landowners can benefit from tax advantages, such as reduced property taxes on farmland and potential subsidies for agricultural use.
• 💧 Water rights associated with land ownership are becoming increasingly valuable as water scarcity becomes a global issue.
• 🏆 Prominent figures like Ted Turner, John Malone, and Jeff Bezos are notable landowners, demonstrating the trend among the wealthy.
• 📚 The script suggests that understanding land investment requires knowledge of development paths, migration patterns, and potential for future growth.

Q & A

Why are some of the wealthiest people buying land?

The wealthiest people are buying land as a form of investment, considering it for its safety, potential for appreciation, low maintenance, and cash flow generation.

What percentage of land ownership has increased since 2007 among the 100 families that own most of the land in the United States?

The land ownership among these families has increased by 50% since 2007.

Who are some notable individuals mentioned in the script as large land owners in the United States?

Ted Turner, the founder of CNN, owns 2 million acres, John Malone, the former CEO of Telecommunications, owns 2.2 million acres, and Jeff Bezos owns 420,000 acres.

What is the number one asset class in terms of appreciation in the United States over the last 80 years?

Land, particularly farmland, has been the number one asset class in terms of appreciation over the last 80 years, with an average annual increase of 12%.

Why is land considered a low maintenance investment?

Land is considered low maintenance because it does not require regular upkeep or maintenance like mowing lawns or repairing fences, especially for large acreages.

How can land generate cash flow for its owners?

Land can generate cash flow through leasing it out for activities like farming, grazing, or other uses, providing a passive income stream for the owner.

What is the concept of 'scarcity guard city' in the context of land investment?

'Scarcity guard city' refers to the strategy of buying land in areas expected to grow or develop, thus increasing the land's value as the city expands.

How can owning land provide tax benefits?

Owning land, especially if it is designated as preservation land or farmland, can provide tax benefits such as reduced property taxes and potential subsidies.

What is the significance of water rights in land ownership?

Water rights are significant because owning land often comes with the rights to the water underneath it, which can be a valuable resource as water scarcity increases.

Why is water being referred to as the 'new gold' in the context of land investment?

Water is referred to as the 'new gold' because of its increasing scarcity and value, making land with water rights a highly sought-after investment.

What is the potential impact of land investment on the wealth of the super-rich?

Land investment can significantly increase the wealth of the super-rich by providing asset preservation, cash flow, and substantial appreciation in value, especially in areas with growth potential or water rights.