As an investment asset class, hunting land offers some unique characteristics that can make it appealing for certain investors. Hunting land investment provides the opportunity to own a hard asset and enjoy recreation, while also potentially generating stable income from leasing. However, there are also risks and challenges involved with owning rural land. When evaluating is hunting land a good investment, key factors to consider include location, amenities, access, carrying costs, and intended holding period.
Location is critical when investing in hunting land
The location of a hunting property will largely determine its investment potential and value. Prime hunting areas with abundant wildlife, good access and proximity to major cities or hunting destinations tend to command the highest prices and lease rates. Smaller, remote tracts or regions with less game may offer cheaper entry costs but lower income potential and liquidity. Focusing on properties in highly desirable hunting locations can improve returns and make it easier to attract lessees or resell the land.
Quality amenities and infrastructure add value
Hunting land with quality amenities and infrastructure in place will be more attractive to potential buyers and lessees. This includes good road access, utilities, lodging or camp facilities, maintained food plots/stands, and reliable cell/internet service. While developing these features requires upfront and ongoing investments, they can enable higher lease rates and improved resale value. Lack of accessibility, utilities or lodging can deter serious hunting enthusiasts and crimp investment returns.
Shorter holding periods can increase liquidity risks
Investors should consider their intended holding period, as hunting land can be relatively illiquid compared to financial assets. Properties in prime locations with multiple potential buyer profiles usually sell faster. However, lower-quality or remote parcels often have fewer potential buyers and longer marketing times. Investors planning to flip or resell quickly may face higher liquidity risk. Strategies like partnering with other long-term investors can help mitigate liquidity challenges.
Carrying costs must be accounted for
While hunting land offers passive income potential from leasing, there are also carrying costs to factor in. Property taxes, maintenance, utilities, insurance, travel, and management/oversight require budgeting for regular and unexpected expenses. Conservation practices like timber stand improvements and sustaining wildlife habitat also require ongoing investments. Estimating and planning for both fixed and variable carrying costs is essential for hunting land to make sense financially.
Returns are driven by lease rates and appreciation
Hunting land can generate annual income through lease agreements, usually structured as a price per acre. Lease rates are driven by the property’s game, habitat quality, and amenities provided. While leased acres produce direct income, total returns also depend on long-term land appreciation. Areas with strong population growth, limited supply, or rising participation in hunting/recreation are better positioned for appreciation. Investors should analyze both income and appreciation potential when evaluating hunting land deals.
In summary, hunting land can be a rewarding investment given attractive location fundamentals, quality improvements/infrastructure, reasonable carrying costs, patient capital, and upside from appreciation. However, lackluster locations or properties, high expenses, and unrealistic return expectations could result in disappointing performance.