Tag Archives: real estate
Indiana, Illinois Land Sells For $6.57 Million In Auction
SULLIVAN, Ind., June 21, 2013 /PRNewswire/ — The auction of 1,035 acres of Indiana and Illinois farmland drew a standing-room-only crowd of approximately 250 people Tuesday, resulting in active bidding and strong prices. Most of the tillable cropland sold to investors at prices reaching $8,373 per acre in the auction, which was managed by Schrader Real Estate and Auction Company and Murray Wise Associates. “Farmers and investors alike were actively bidding, and during the past few months, farmers have been prevailing. But in this case, most of the cropland went to the investors,” said Gene Klingaman, executive vice president of Schrader. “This exceeded our expectations and demonstrates what we’ve been seeing for quite a while now — that demand for farmland remains high among investors and farmers alike,” he said. Joe Bubon, executive vice president of Murray Wise Associates, agreed. “There isn’t a lot of supply of available farmland, so a property like this one that is more than 80 percent tillable is very attractive. I think we’ll continue to see strong farmland prices, because there really aren’t a lot of alternatives that combine the return and stability, especially with the recent volatility in stocks and bonds.” The auction was held at the Sullivan County 4-H Fair Grounds Exhibit Building. Schrader Real Estate and Auction Company, based in Columbia City, Ind., is a leading auctioneer of agricultural land throughout the United States. Individuals seeking additional information about the firm and its auctions may visit www.schraderauction.com or call 800-451-2709. Murray Wise Associates, based in Champaign, Ill., is a leading auctioneer of farms and ranches throughout the United States. Individuals seeking additional information may visit www.murraywiseassociates.com or call 800-607-6888. For more information: Carl Carter, 205-823-3273 SOURCE Schrader Real Estate and Auction Company /Web site: http://www.schraderauction.com Continue reading
US Property Prices Still Historically Low
Axis Property Investment, a firm located in the United Kingdom (U.K.), is telling clients that now is the time to invest in U.S. property provided the historically low interest rates and property bargains. The firm quotes rates as low as 3.6% for 30-year mortgages, which it says are even lower than what they were in the 1950s. Experts there warn, however, that buying property in the U.S. is different from buying in the U.K., particularly when it comes to pricing and the warranties that come with the home. Buyers are advised to do thorough research before jumping into any foreign market. For more on this continue reading the following article from Property Wire . A 30 year fixed mortgage currently costs as little as 3.6% in interest to service each year and this has made houses more affordable and driven a big rise both in mortgage applications and in refinancing to cheaper deals, experts claim. For those considering property investment in the US, the climate is favorable and hotting up. Low, but rising prices and increasing average rental rates make it possible to achieve much better yields than in the UK, says Axis Property Investment. It also points out that rental vacancies are now at their lowest levels in over a decade, while the homeowner vacancy rate is at its lowest point since March 2006. Selected regions in the US can easily give a rental yield of well above 5%. It points out that properties are often sold as seen and you can be taking on a property with associated problems either in terms of the fabric of the building or debts linked to the address which may be passed onto the new owner. It believes that more research needs to be done into prices before buying as property valuation in the US is different. Other issues worth checking if you are renting out the property is where there is a tenant before you buy. ‘A pre-tenanted property means there will be no initial void period and your income stream will start to flow into your account. Furthermore, there is also associated hassle and stress with an empty property such as the chance of vandalism, or the higher insurance premiums you may have to pay for an empty unit,’ the report says. The firm also recommends that overseas buyers commission an independent property inspection report and for investors to have a realistic exit strategy. ‘We are currently at the bottom of the US property cycle just at the point where prices are starting to rise. In order to derive the greatest overall returns, you should be looking to sell at the top of the cycle and this will take some time to arrive, maybe even a decade from now,’ it says. Continue reading
Time For Timber? 25-Year Gain Crushes S&P 500
BY CARLA FRIED JUNE 21, 2013 1 0 When it comes to commodities, gold and energy typically bubble up as the go-to ways to add some alternative asset class diversification to a portfolio. Thing is, you’re typically in for a feast or famine experience, depending on global demand (for oil) and the global zeitgeist (for gold). From the Lehman Brothers bankruptcy in September 2008 through the debt-ceiling debacle in August 2008 the price of gold nearly doubled. Since then, as the Chicken Little trade has lost its appeal amid mending economies, the price of gold is off nearly 25%. With energy, you’re pretty much beholden to the direction of oil prices , which swing around in line with the global economic outlook. Here’s how the Vanguard Energy ETF’s ( VDE ) price chart side by side with the direction of oil prices. Brent Crude Oil Spot Price data by YCharts If you’re intrigued by the idea of adding a commodity sleeve to your portfolio, timber is an often overlooked commodity worth consideration. First off, it’s a renewable resource. Can’t say that about gold or (most) energy. It’s also got a flexible harvesting schedule. You can’t keep corn in the ground if prices soften. A benchmark timber index had an annualized gain of more than 12% from 1987 through 2012, compared to the S&P 500 ’s annual gain of just below 10%. Coming out of the market low in March 2009, the SPDR Gold Share ETF ( GLD ) hasn’t been half as productive an alternative investment as the two largest timber ETFs, Guggenheim Timber ( CUT ), and iShares S&P Global Timber and Forestry ( WOOD ). WOOD data by YCharts Then there’s the Grantham seal of approval to consider. Jeremy Grantham, co-founder of GMO, which manages more than $100 billion for institutional clients, has been an eerily canny long-term seer. He was harping about the tech excess in the 1990s long before bubble talk became fashionable. He was also out in front on suggesting we had a bit of a credit/debt imbalance prior to the 2008 meltdown. The GMO team has long been pounding the table on the diversification and inflation-hedge attributes of timber for years. In GMO’s latest seven-year forecast, the 5.9% projected real return for timber is equaled only by the firm’s outlook for much more volatile emerging market stocks. For perspective, GMO expects run of the mill U.S. small and large caps to register negative returns over the next seven years when adjusted for inflation. High quality U.S. large caps — think excellent ROE and low debt — are expected to fare better, with an annualized 3.7% real return. But that’s still two percentage points less than timber. If you’re looking to rotate out of some profitable investments that look a little long in the tooth these days, timber might be worth a look as a long-term hedge position. To be sure, GMO and other big time institutional clients can invest directly in timber. With timber-focused ETFs you’re of course buying a portfolios of businesses that traffic in timber, in whole or part. For a more direct stake, you can take a look at Real Estate Investment Trusts that own forestland. Weyerhaeuser ( WY ), which converted from a mish-mosh of paper-related business to a full on REIT in 2010, is a major holding in both ETF portfolios. The company just announced it will pay $2.65 billion to buy more land that will increase its Pacific Northwest timber acreage by 33% to more than 6 million acres. (Pacific timber has a faster route to Asian emerging markets than southern timberland.) At the same time, Weyerhaeuser says it’s considering a sale or spinoff of a home-building subsidiary. The net takeaway: it’s doubling down on direct timber ownership and looking to cash out of a main consumer of said timber. Granted a forward PE ratio north of 20 isn’t exactly a bargain, but that’s well below Weyerhaeuser’s recent highs. Management announced it plans to finance the deal by issuing more equity and debt. As a little company research shows, Weyerhaeuser’s debt-to-equity ratio is below 1.00; that makes it far more stable than Plum Creek Timber ( PCL ), but it’s still more leveraged than the other major U.S. timber REIT, Rayonier ( RYN ), which operates in the Southern states. WY Debt to Equity Ratio data by YCharts As with all REITs, at least 90% of income must be distributed to investors. Weyerhaeuser’s current dividend yield is 2.8%. Rayonier’s dividend yield is at 3.3%. Carla Fried, a senior contributing editor at ycharts.com, has covered investing for more than 25 years. Her work appears in The New York Times, Bloomberg.com and Money Magazine. She can be reached at editor@ycharts.com. You can also request a demonstration of YCharts Platinum. – See more at: http://ycharts.com/a…h.wJduGa6w.dpuf Continue reading
