Is This the Year for Home Remodeling or Building?

Consider family goals when deciding where to invest.

The 2007 season could well wind up being remembered in Indiana s the year of the haves and have-nots. If you had good yields, you should have enough income to think about investments of one sort or another this fall. If you didn't but aggressively priced what you had, it may still be a decent year. If you didn't do either one but had revenue-guaranteed crop insurance, it may still be a fall and winter where you can rest easily, prepare for next season and maybe still have a few bucks to invest in things you put off when crop budgets were very tight, like in '04 and '05. For an unfortunate few with low yields, no prices locked in and either minimal or no crop insurance, what to invest in this fall won't be an issue.

If you have at least some income to think about investing, there are many places to put it, says Chris Hurt, Purdue University ag economist. What you must decide is where you can get the biggest return on your investment. Maybe it's in putting up more grain storage, especially if grain storage is already a bottleneck, or if you're delivering to a plant expecting for you to store it until they need it, nearly all year long.

It might be in tile. If you've got a wet farm that doesn't have a whole field tile drainage system and you've got an outlet, that may be an opportunity to make land you already own more valuable for the future, even though drainage was a moot point for most people this year. Just remember, 2007 wasn't typical- it was a year of twists and turns, and for many a walk on the dry side.

"For some, buying land might be an option," Hurt notes. Sometimes key pieces of real estate only come up for sale once or twice during your lifetime. Still, with land prices up 16 to 19% in Purdue's annual mid-summer survey in '07 vs. '06, land is a costly investment.

The one you don't want to overlook is perhaps remodeling the house, building a new house, or doing something else with the family, In fact, one southern Indiana farmer tells us that's what he's in the process of doing now- building a new house. His area wasn't blessed with good weather, and he's not worried about having extra money setting around, but he committed to the house before the season was known because he felt it was time his wife got something she deserved. He offset the price tag by searching hard, and finding a local builder who does good work but charges much less than most conventional builders in his area.

"You need to sit down with your wife and family and discuss priorities and objectives," Hurt says. "It shouldn't always be automatic that all the money earned in a year goes back into the farm business. Maybe you haven't had a vacation with the kids in a number of years, and that's high on your priority list. If you had a decent year, this might be the time when you choose to do that," he says.

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