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Alabama Land For Sale-Beating Inflation With Land
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I am often asked by friends who know I have been in the real estate business for a long time “What kind of Alabama real estate would be best to invest in?”  Is it farmland, timber, or income producing commercial property?  Why not all of them?  Being asked about hedging inflation with timberland caused me to have to do a little homework.  I can share with you what I found out through some research and how I now would answer the question asked about hedging off inflation.

The headlines of some major news papers read recently that inflation is at a decades old low.  That doesn’t sound too promising.  A common argument for investing in Alabama timberland is the potential it has to beat inflation.  Knowing that inflation is so low doesn’t make investing in timber very attractive.  So, what to do?

Studies done in the past reveal that Alabama timberland investments could be a key in fending off  inflation.  One of the resources I looked at included Court Washburn and Clark Binkley’s “Do Forest Assets Hedge Inflation? (Forest Science, August 1993).  This article confirmed that Alabama timberland assets hedge “higher-correlation between timberland returns and inflation, concluding that timberlands will “preserve capital in the face of rising consumer prices” (Forest Research Notes, 3rd Quarter 2007).  This issue was revisited by Forisk and exposed similar results for direct timberlands, but not quite the same results for publicly-traded timberland-owning REITs.  Returns from direct Alabama timberland investments, measured by NCREIF Timberland Index, compare positively on an annual basis with inflation; public timber REITs, as calculated by the FTR Index, lack a similar relationship over the pasts ten years.  The key factors being:  the differences in owning hard land assets versus super-liquid public equities.

Are you wanting to say “Say What?” Just because inflation rates are low doesn’t have any comparison to timberland’s potential to moderate exposure to inflation in the future.  The focal game is against “Unexpected” inflation, not average expectations.

After all this, I say that now is the perfect time to buy Alabama timberland, water frontage, recreational, commercial and high yield production farmland.  Even with the current economic environment.  Using Alabama, Mississippi, and Louisiana, for example.  In the Delta farmland of Mississippi that has great soil and high production is in great demand and buyers who are foreign are grabbing it as quickly as it hits the market.  Should you locate a good price on recreational Alabama land, grab it.  If the bargain price offsets inflationary cost, you did good.  Commercial land can be bought at a great price in Alabama  in cities like Birmingham and Mobile  if you are interested in the lower portion or maybe Shreveport if you are interested in the North end of the state.  Always keep your ears open because you can find a bargain.  It is out there everyday.  It just takes some homework and research.  The deals are out there I’m telling you that you just have to be willing to research and find deals on Alabama land for sale



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