Is Kansas Land a Good Investment?

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Is Kansas Land a Good Investment?
By

Bart Waldon

Kansas is located in the Midwestern United States, aptly referred to as "America's Heartland." Known for its beautiful rolling plains, agricultural production, and the famous Yellow Brick Road from The Wizard of Oz, Kansas conjures images of rural America at its finest.

With a population of just under 3 million people, Kansas is not overly crowded, yet offers plenty of opportunities in its cities like Wichita, Topeka (the state capital), Kansas City, and Lawrence. The cost of living is below the national average, making Kansas an affordable place to call home.

So, what about investing in Kansas land? Is it a good investment in 2024 and beyond? Let's explore some of the key factors to consider.

Economic Stability 

Kansas enjoys relative economic stability, largely due to agriculture and aviation manufacturing. The state is a leading producer of wheat, beef cattle, and soybeans. Major employers like Cessna, Bombardier Aerospace, Spirit AeroSystems, and Airbus help drive a robust aviation economy. Kansas also has a fast-growing renewable energy industry.

With below average unemployment and median incomes on par with the rest of the nation, Kansas offers investment potential for land buyers who can tap into these steady local industries.

Affordable Pricing 

The price of Kansas land is affordable compared to other parts of the country. As of 2022, the typical price per acre ranged from $2,250 per acre on the low end to $4,750 on the high end, depending on the part of the state. These prices are a fraction of land values on the densely populated coasts.

For savvy investors or those wanting acreage for personal use, affordable Kansas land represents a useful value investment and store of wealth during inflationary times in 2024 and coming years.

Strategic Location 

Kansas occupies a strategic Central U.S. location ideal for transportation, distribution, manufacturing and agriculture. The state has easy access to rail, air and truck transportation routes, which helps explain the prominence of aviation and food processing facilities. Kansas City International Airport continues expanding as a travel and cargo hub.

For companies in sectors like e-commerce, food production, commodities, freight and logistics, Kansas offers prime positioning at the crossroads of America. The infrastructure and geography make it convenient for national and global distribution channels – and room for more growth.

Strong Investment Culture 

Unlike some regions focused only on residential properties, Kansas has a strong culture welcoming commercial and investment land buyers. The state actively works to attract manufacturers, distributors, data centers and other major projects bringing jobs and tax revenue. Investors find openness to development proposals compared to more restrictive parts of the U.S.

Forward-thinking cities like Olathe and Gardner have incubated technology hubs and business parks for companies small and large. The Greater Wichita Partnership also promotes the Wichita metro for its manufacturing prowess. This investment culture signals opportunities for those acquiring land now for future income potential.

Favorable Tax Environment 

In addition to affordable land prices, Kansas offers a favorable tax environment for owners and investors. The state has worked to implement tax reforms designed to attract business and development. Key elements include:

  • No state property tax
  • Low retail sales tax capped at 6.5%
  • No taxes on core business inputs
  • Aggressive income tax exemptions and credits
  • Tax increment financing (TIF) widely available

These incentives allow investors to maximize returns on land assets and developments. TIF public financing provides infrastructure improvements for approved commercial, industrial and mixed-use projects.

Taken together, Kansas has positioned itself as a low-cost, low-tax destination for companies locating facilities, offices or farmland generating income. Ongoing tax reform talks strive to enhance the state's draw versus alternatives.

What Could Change Things? 

No location is without some downsides. In Kansas, future land investors should monitor impacts from:

Water Access – Parts of Kansas utilize the Ogallala Aquifer spanning eight states. This water source has declined faster than recharge in some areas. While irrigation helps agriculture thrive, limits could constrain crop outputs if not addressed.

Population Trends – Except the KC and Wichita metros, many Kansas counties peaked in population back in the 1930s. An aging population base could limit future workforce expansion.

Climate Change – Kansas already contends with floods, droughts, tornadoes and extreme weather. Climate impacts could amplify vulnerabilities going forward.

Taxes – While currently favorable, Kansas implemented sweeping tax cuts that backfired from 2012-2017 by creating large revenue shortfalls later reversed. Taxes remain an ongoing discussion.

Any future challenges would likely emerge over years or decades, not overnight. But investors should monitor how these issues develop for impacts on long-term land prospects.

Evaluating Land Investment Potential 

When evaluating potential land investments in Kansas, focus analysis on key aspects that determine income producing potential:

Land Usage – What is legally permitted in terms of zoning and deed restrictions? Can the property support your intended commercial activity or development plans?

Accessibility – Does the location offer strong road, rail, air or utility connectivity to support your operations? Can inventory and materials easily reach markets?

Existing Infrastructure – Is there sufficient supporting infrastructure on site or that can be reasonably added to accommodate needs like parking, power, water, sewerage, storm drainage, lighting, etc.?

Site Conditions – Do topography, soil stability, vegetation, habitats, flood zones or other physical characteristics pose any restraints or costs to overcome with grading, mitigation, studies or special permitting?

Community Support – Would local planners and public stakeholders welcome, resist or remain neutral to the type of project you have in mind? Their feedback influences approvals.

Run the numbers – Forecast taxes, operating expenses, construction costs, financing terms and exit strategies to model investment returns and performance sensitivities.

Weighing all location-specific factors provides the diligence required to determine if a Kansas land opportunity truly aligns with your risk-return investment goals.

Top Kansas Growth Regions to Consider 

While evaluating any site on its merits, the following Kansas regions stand out for continued growth potential:

Kansas City Metro – Anchored by Overland Park and Kansas City (KS) seeing strong corporate expansion and residential development. Amazon, Garmin and Waddell & Reed have located major facilities in the metro.

Wichita Metro – The state’s largest city is a manufacturing, healthcare and education hub. Spirit AeroSystems, Textron Aviation, Koch Industries, Via Christi Health and Wichita State University power the economy.

Topeka Metro – Kansas’ capital city features a stable government employment base along with food processing like Mars Chocolate North America. Retail is also picking up with additions like Dick’s Sporting Goods to the area.

I-35 Corridor – The interstate connecting Kansas City to Wichita fosters growing smaller cities like Gardner, Olathe and Edgerton positioning logistics parks, tech campuses and upscale living.

Rural Acreages – Prospects remain for crop production, cattle ranching and energy farms on rural acreage across Kansas. Precision agriculture leveraging automation, AI and sensors gains wider adoption.

These areas share positive demographic and infrastructure trends for land buyers targeting either near-term or future development plays when aligned with demand drivers.

Is Kansas a Good Land Investment Right Now? 

Despite some future uncertainties impacting all states, Kansas remains on solid enough economic footing to represent a reasonably good land investment – especially at current affordable pricing levels.

The agriculture, aviation and logistics sectors signal stability not tied solely to real estate booms or busts. Water challenges bear monitoring but won’t transform Kansas overnight. For those looking 5-10+ years out, Kansas provides income generating land investment upside worth considered exploration in 2024.

Kansas will likely never lead national real estate appreciation, especially compared to the major coastal metros. Yet in terms of value, predictability and sustainable returns, quality land investments in well-selected Kansas locations deliver for many investor risk-reward preferences.

Frequently Asked Questions (FAQs)

How much does land in Kansas cost per acre? 

Land prices in Kansas range from around $2,250 per acre on the low end and up to $4,750 per acre on the high end, with the average price per acre statewide around $3,500 as of 2022. Prices can vary significantly depending on location and land quality.

What returns can I expect from investing in Kansas land? 

Return on investment for Kansas land varies substantially based on the type of land use. Farmland may generate around 2-5% annual returns from crop production, while land developed for commercial use may see higher returns of 5-15% per year once established. Total returns long-term ultimately depend on how the land gets utilized.

What are the main industries and demand drivers in Kansas? 

Key Kansas industries like agriculture, aviation manufacturing, transportation and logistics, renewable energy, and food processing help drive demand for land in the state. Population and job growth in metro areas can also impact real estate markets. These demand drivers support prices and development potential.

Is funding available for development projects on Kansas land? 

Yes, Kansas offers a range of public funding resources investors can leverage for development plans. Tax Increment Financing (TIF) provides infrastructure upgrades in support of approved commercial and industrial projects. Other state and local programs exist as well.

What risks should I evaluate before investing in Kansas land? 

Investors should assess long term availability of groundwater given portions of the state utilize the declining Ogallala Aquifer. Trends in population, workforce, taxes and climate also impact how land in Kansas may perform as investments over 5-10+ year time horizons and factor into risk evaluations.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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