Are tractors and equipment a good investment right now?

[koshari]

Cute little bugger….

IMO, we’d all do better with some more “European influence” in our tractors.
Heavier & generally higher quality than Asian stuff.

We have a few North American machines here ( toro and walker mowers and a polaris ranger ) . solid machines but metric is a lot easier than fractal stuff. BSP rather than NPT is good as well.

 

[LightningCamaroGuy]

Here's my thought. Land is a good investment. They don't make more of it, and it doesn't get any cheaper. You need to keep up with your land, which you'll likely want/need equipment to do, so in that sense I do think that a tractor and attachments for it, backhoe, bulldozer, trackhoe, etc can be good investments depending on your needs.

 

[jyoutz]

Here's my thought. Land is a good investment. They don't make more of it, and it doesn't get any cheaper. You need to keep up with your land, which you'll likely want/need equipment to do, so in that sense I do think that a tractor and attachments for it, backhoe, bulldozer, trackhoe, etc can be good investments depending on your needs.

Nice spin. I like it.

 

[TBob42]

Here's my thought. Land is a good investment. They don't make more of it, and it doesn't get any cheaper. You need to keep up with your land, which you'll likely want/need equipment to do, so in that sense I do think that a tractor and attachments for it, backhoe, bulldozer, trackhoe, etc can be good investments depending on your needs.

Except Dubai, they made some more land. I'm not sure if it worked out for them but.....

 

[koshari]

Except Dubai, they made some more land. I'm not sure if it worked out for them but.....

and Holland. and land doesn't necessarily not lose value, especially when industry moves from a region, but as a whole its a reasonably sound investment.

 

[Hay Dude]

You're in good shape either way, if you used that machine to generate profit for your business. But if not, then you have to consider that $45k today is actually worth less than $41k in 2021 dollars, due to massive inflation the last two years. Indexes vary, but the average indicates that $41,000 in 2021 would be $46,100 today.

The average return on a CD over this time period is just shy of 17%, so if you had just put that $41k into CDs, you'd have $48k today. Of course, you wouldn't have had that nice tractor to use 3 years in-between.

jyoutz already nailed it, that they're depreciating assets, even if that depreciation comes from inflation alone. If you're generating profit from it, then it's still a good investment, like any piece of capital equipment. For the rest of us, at least they're depreciating far slower than almost anything else we buy.

Remember, I get to make money with it and depreciate it, along with selling it for more than I paid for it (as long as I don’t recapture the depreciation by selling too soon)

 

[milkman636]

Two of the three tractors I’ve sold in my lifetime netted more than I paid for them. The only one that sold for less was a two wheel drive model with a manual transmission. It still returned about 80% of the purchase price after 9 years of ownership and use.

The real value in a tractor is what it can be used for. It has utility. While I sit here and type this, I could look out any window of my house and point to things in that view that have been improved by the use of a tractor. In addition to land improvements, the tractors have also been employed in growing of food for my family each summer and removal of snow each winter over the 18 years we’ve been here. A tractor and loader even saved a ton of climbing, hauling, and cleanup while reshingling the roof of the house. Hiring out all the things I’ve done over those years would have easily exceeded the purchase price of my tractors.

 

[Hay Dude]

If you are a busy homeowner/hobbyist and did projects you would normally have paid a landscaper to do, your tractor could be a good investment after you sell it. Depends on the scope/scale of what you have done.
I would encourage any retirees or anyone with ample time to consider starting a small business LLC and write off your tractor, so long as you are doing work for other people, it’s legit.

 

[rScotty]

Deutz is making quite a push in the States to become relevant. I hope they succeed.

MAN seems to be the preferred diesel engine in the Fendts over Deutz.

IMO, MAN is the finest diesel engine manufacturer in the world.

That is pretty high praise for MAN. What makes them so good? Any lessons there?

I remember that at one time Yanmar was said to be one of the largest diesel manufacturer in the world. They kept the quality up by doing their own smelting, casting, and machining.
That's rough considering the size of some of those engines.

Wonder how many companies do all their own work in house today?

rScotty

 

[Hay Dude]

Well, I did say “IMO”, but its based on talking to quite a few diesel mechanics and they are Fendt’s primary mill. They make more power at lower RPM than anything I have seen, saving fuel and reducing noise. Most Fendts with Mans will go 15,000+ hours with nothing but maintenance.