[ Up ] [ Farmland Investment as a 1031 Alternative ] [ Why Michigan Farmland? ] [ Concluding Remarks ]
Why
Michigan Farmland?
There are a number of reasons why an investor utilizing a 1031 exchange
would find farms in Michigan particularly desirable as opposed to land in
other areas. Moreover, a relationship with Heartland Agricultural
Services, LLC (HAS) in locating such properties is most advantageous. The
following explains why.Ease of
Procurement
HAS has a unique position in the Michigan farmland market. As the state's
leader in agricultural land transactions, we can identify economically
viable farm properties on short notice. Also, parcels of varying acreage
can be pieced together to form an investment of the size needed to satisfy
the requirements of a tax-deferred exchange. Acreage ranging from 40 acres
in size to 1,000 can be "packaged", if you will, to create the size
needed. HAS is well penetrated throughout Michigan to insure rapid
procurement is achieved.
Diversification
As Michigan is second only to California in the diversity of its
agriculture, a good measure of risk is able to be avoided in holding
agricultural real estate. Should prices drop in one particular market such
as grain, a vegetable farmer may choose to re-direct the cropping program
to cauliflower, for example. The wide variety of cropping operations make
reliance upon the economic strength of any single commodity obsolete. Lake
Michigan's effect on our climate allows for this diversity in cropping
opportunities--something other areas do not have.
Alternative Use
To many, investment in agricultural land also brings with it the
possibility of extra profitability in the form of development potential.
Many farm properties increase in value exponentially once they are
targeted by developers for housing or light industrial use. The influences
of Grand Rapids, Kalamazoo, Ann Arbor, Lansing, South Bend, and Chicago
itself are creating demand for land to be used as country estates--thereby
raising its value substantially. Southern Michigan is experiencing strong
growth in the demand for rural housing sites.
"Hands Off" Management
For the passive investor, HAS can provide farm management services that
will both increase profitability and minimize financial risk. A strong
advocate of cash renting as opposed to share cropping, HAS will introduce
to each landowner a qualified tenant who emphasizes land stewardship and
fiscal responsibility. In most case, the entire year's rent will be paid
in advance!
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