By Gary Hubbell, ALC
What is a “Safe Haven” Investment? Gold is One–Land is Another
There’s no doubt we are living in uncertain times. Inflation is stubbornly high and most of us are grudgingly admitting that many prices will never come down to where they were three years ago. The stock market is irrationally high, pumped full of inflation dollars, and many experts think we’re far overdue for a major correction–with the word “correction” translating to huge losses for the average investor. When the tea leaves are calling for you to withdraw from the market, smart investors start looking for “safe haven” investments–assets that hold their value over time.
Gold, Government Bonds, Swiss Francs, US Dollar–Seriously?
So what is a “safe haven” investment? Many people point to gold. It’s tangible, you can hold it in your hand, it has never gone to zero value, and it has stood the test of millennia as a valuable asset. But gold also has its inherent problems. It doesn’t actually do anything for you, other than look pretty and perhaps is fashioned into jewelry. It’s easy to transport, but that means it’s also easy to steal. You can slip a gold coin into your pocket and walk away whistling a tune. People mention the US Dollar, the Swiss Franc, and government bonds as safe haven assets. Seriously? The US Dollar has been devalued through inflation. My wife is Swiss, and their economic problems are just as bad as anyone else’s. Their social net is strained, inflation is high, they have uncontrolled immigration, and their economy is weak. Hard pass. Aside from gold and silver, I wouldn’t add any of these assets to my portfolio.
Land is the Original Safe Haven Asset
Land is different. It predates gold as a valuable asset, as everyone needs land to survive. It provides many functions that gold can’t match. You can grow a crop, raise animals, use it as a buffer zone from unwanted neighboring activities, recreate on it, photograph it, develop it into homesites, portray it in a painting, have family reunions on it, race cars and motorcycles on it, set up hunting blinds, ride horses–the lists are endless. And over time, land not only holds its value, it typically increases considerably in value over time.
A recent market analysis showed a 55% gain on land values in only three years
I was recently asked by a client to do a market analysis on two 35-acre parcels of mountain land that he planned to give to his adult children. He had actually made the same request three years earlier, so I simply had to update the old document with new comparable sales. I dug up my 2021 market analysis and noted that I had valued the two parcels at $140,000 each. I was pleased to find five excellent new comparable sales from late 2023 and 2024. The comps were so close in proximity, vegetation, topography, road access, and utilities that I found it hard to believe. And the value came out at $252,000, or a 55% increase in value in only three years.
The Great Reset Became the Great Rural Reset
Now, we can ascribe a lot of that gain to the CoVid years of real estate, when the market went crazy. But it’s more than that. While the World Economic Forum tried to implement the Great Reset, where the goal is to shove people into “15-minute cities” in apartment complexes stacked upon one another, there was a “Great Rural Reset” instead. People took advantage of widespread high-speed internet and searched out where they really wanted to live instead of where they had to live prior to this new technological freedom. CoVid was truly the era of Zoom calls, and people realized they didn’t have to get to the airport for tedious meetings in a distant city when they could “jump on a Zoom call” and do it from their country retreat. This phenomenon really accelerated land prices.
Land Has Retained Its Value Over Time
But it’s deeper and wider than that. I’ve been cleaning up my office lately, getting rid of stacks of outdated files and papers. As you well know, I’m a member of the Realtors Land Institute, and our Colorado RLI CO Chapter has quarterly marketing meetings. Each broker is allowed to present listings to the group, along with a flyer for each property. I found a box of RLI packets from the September 2013 meeting, and dang, there were some deals! For example, an 1,800-acre ranch near Cedaredge for $2.7 million? Wow! An equine event center with arena and grandstands for $750,000? Are you kidding? At the time, these seemed like well-priced properties for the current market. Today, those same properties would list for 2-3 times those 2013 prices, maybe more, proving once again that land is a phenomenal investment over time.
Farm Rental Rates are Modest–But When Appreciation is Added In, Farmland Pays Off
It’s well known that farmland rentals are not a great return on your investment. My colleagues who broker a lot of Iowa farmland, such as Luke Nissen and David Whitaker, will tell you that a 3-3.5% rental return is pretty standard. Let’s say you buy 80 or 160 acres of corn ground with a buy-and-hold strategy, and you lease it to a local farmer who plants corn on it. After taxes and expenses, you will typically realize a net return of 3-3.5%. Not great, when the stock market is making triple that amount. However, when you factor in appreciation, it might just beat the stock market. Our latest RLI statistics show that land tends to increase in value 7-10% a year, year over year, and I’m pretty sure that these statistics don’t include a jump in land prices over the CoVid years.
Land Is a Safe Haven Asset Like Gold
We all know that markets fluctuate. While the DOW recently cracked the 40,000 barrier, it’s already back down to 38,000 as I write this. Land fluctuates as well. However, the stock market has been poised to crash for years, and canny investors know when to back off and go to “safe haven” investments such as gold, which is up 18% the past year and 78% the past five years. Land is considered one of the best long-term safe haven investments, especially for very wealthy investors who have a lot of cash on hand. My dear friend Dave Alvarez is a nationally known golf pro who has tutored many wealthy students, including Hall of Fame quarterbacks, very famous actors, singers, Wall Street titans, and even a certain President. “When the market starts to turn, they go to ground, baby,” Dave says. “They buy dirt.”
Interest Rates Don’t Matter for Cash Buyers
While everyone loves an income return, many investors just want the property to carry its own costs of taxes, maintenance, and insurance, betting on the long-term appreciation in land values over time. That’s why larger holdings have been selling strongly, even as interest rates have tripled. These buyers don’t care about interest rates because they’re paying cash.
“Stand on Your Investment”™ by UC Hunting Properties
And then you have the factor of owning dirt. As my colleagues say at UC Hunting Properties powered by Realtree, “Stand on Your Investment™”. It’s hard to get a kid really excited about your stock portfolio, but going fishing at the farm pond makes lifetime memories. I was awakened this morning by a rooster pheasant cackling outside our bedroom window, which made me start the day with a smile. We just picked up 11 boxes of prime beef from the local packing plant, which was fed with hay from our ranch. I continue to advocate for land ownership. It’s one of life’s greatest investments.
Several Recommended “Safe Haven” Investment Properties
My friend Ross Busch is part of a family farm in the Palouse area of Idaho. This 883-acre farm has had excellent yields of wheat for over 100 years and it’s also located in the path of development. I can’t think of a better safe haven investment than this one. This is an auction, so if you want to bid, get in touch with me quickly to learn more about this property. https://www.ucsteelheadrealty.com/properties/id/palouse-area-dryland-farm-auction–idaho/1109841/
The Porter Ranch in New Castle, Colorado, is an excellent example of a “safe haven” investment. At $15.9 million for the 3,526-acre ranch, it’s priced at a little over $5,000 an acre, while Aspen properties 70 miles away are selling for millions per acre. It’s one of the largest ranches left in the Aspen-Glenwood Springs area. Not only does it offer excellent elk and mule deer hunting, it has outstanding water rights with its own 1,175-acre-foot reservoir. The ranch has literally hundreds of beautiful homesites, so it has strong potential for future development. It is currently under contract, but interested buyers should check in with us in the event that it falls out of contract. https://www.uccoloradobrokers.com/properties/co/the-porter-ranchcolorado-legacy-ranch-for-sale/1093705/
Here’s another excellent land banking property. This 175-acre parcel is located right at the I-70 interchange in DeBeque, Colorado, midway between Rifle and Grand Junction. This property has excellent potential for an RV park, gravel mining, ranching, and recreation. Or housing development. It has a 4-inch water main nearby on the county road, excellent access to power, it’s immediately off the interstate, and has river frontage. It’s currently in agricultural tax status, so taxes and holding costs are low. Priced at $2,995,000. https://www.uccoloradobrokers.com/properties/co/colorado-riverfront-i-70-development-land-for-sale/1088568/
Here’s a sleeper for you–this 175-acre property near Loma, Colorado, looks dry on the photos, but that’s because the current owner hasn’t brought his water rights to life on the property. It’s a great candidate for a feedlot, horse ranch, hay farm, or even for a rural subdivision. This is a nice land investment that will certainly appreciate over time. https://www.uccoloradobrokers.com/properties/co/172–acres-colorado-ranch-and-recreational-land/1104564/
We Are Accredited Land Consultants–The Best of the Best in Land Brokerage
And by the way, if you’re going to make that investment, be strategic about it. Employ the services of a professional. The Realtors Land Institute recognizes the Accredited Land Consultant designation as the pinnacle in land brokerage https://youtu.be/24cmSf63nZY?si=tS-QkRKMc3105edm. I’m one of only 45 ALC’s in Colorado, along with my son, Jake Hubbell. My agents Rocky Mountain Lifestyle Properties – Scott Reece, Loren Williams, and UC Ranch Properties – Spencer Jordan are all studying for the ALC designation. When they’ve completed the process, we will have more ALC’s in one office than any other real estate brokerage in the country. We are land professionals. We love it and live it. For a market analysis of your property or to begin a land search https://aspenranchrealestate.com/#, reach out to us at 970-872-3322.
Gary Hubbell, ALC, is the managing broker and founder of United Country Colorado Brokers & Auctioneers, based in Hotchkiss and Carbondale, Colorado. Gary is recognized by the Realtors Land Institute as an Accredited Land Consultant and has sold farms, ranches, orchards, wineries, hunting land, outfitting businesses, and resorts all over Colorado and Utah.
