Smart Ways to Invest in Tennessee Land in 2026

If you’ve spent time in Tennessee, you’ve seen how quickly the landscape changes—mountain ridgelines, river valleys, fertile cropland, and fast-growing suburbs often within the same drive. That variety is exactly why land investing here can work: Tennessee offers multiple paths to returns, from leasing ground to farmers to positioning a parcel for future development. The key is understanding what you’re buying, what you can legally do with it, and what forces are reshaping land values right now.

The Tennessee Land Market in 2026: What’s Driving Demand

Tennessee sits at the intersection of strong population growth, expanding infrastructure, and a large agricultural economy. Agriculture alone contributes roughly $100 billion annually to the state’s economy and supports more than 380,000 jobs, according to the University of Tennessee - Securing a Future for Tennessee Farms. That economic base helps explain why high-quality farmland, well-located rural tracts, and development-ready parcels continue to attract investors.

At the same time, land scarcity is increasing. Between 2017 and 2023, Tennessee converted 430,000 acres of agricultural land to non-farm uses—equivalent to one average-sized Tennessee farm every 17 hours—according to Farmland Trust - Securing a Future for Tennessee Farms. Looking ahead, Tennessee ranks third in the nation for projected farmland conversion between 2016 and 2040, with projections of more than one million acres shifting to non-farm uses, per Farmland Trust - Securing a Future for Tennessee Farms. For investors, that trend matters because shrinking supply can put upward pressure on strategically located land—especially parcels near expanding metro edges.

Quick Market Snapshot: Farmland Values and Farm Size

Farmland pricing is not static, and recent data shows continued movement. Tennessee farmland values increased by 7.7% in 2025, with cropland values rising by $260 per acre year over year, bringing the average agricultural real estate value to $4,350 per acre, according to the USDA National Agricultural Statistics Service (NASS) - Land Values 2025 Summary Report.

Farm structure also shapes the market. The average farm size in Tennessee is 170 acres, based on the most recent Census of Agriculture, according to Farmland Trust - Securing a Future for Tennessee Farms. Nationally, farms are much larger on average: in 2024, the average U.S. farm size was 466 acres (up from 464 acres in 2023), with total farmland at 876,460,000 acres, per the USDA National Agricultural Statistics Service (NASS) - Farms and Land in Farms 2024 Summary. This difference helps explain why Tennessee often trades in smaller parcels and why subdivision potential, road frontage, and utilities can influence pricing more dramatically in many counties.

Urban vs. Rural: Choosing Your Investment Lane

Urban and Metro-Edge Parcels

Land near Nashville, Chattanooga, Knoxville, and Memphis can appreciate quickly when it sits in the path of new housing, commercial demand, or infrastructure expansion. The upside is strong, but you must treat zoning, access, utility capacity, and entitlement timelines as core parts of the investment—not afterthoughts.

Rural Tracts and Agricultural Land

Rural land can offer lower entry prices and flexible strategies (leasing, recreation, timber, long-term appreciation). However, you still need to verify legal access, survey accuracy, soil capability, water availability, and the true cost of holding the property.

Types of Tennessee Land Investments (and When They Make Sense)

• Farmland: Investors often seek stable, long-term value supported by local farm economics and leasing demand. Recent appreciation reinforces why many buyers keep farmland on their radar—Tennessee’s average agricultural real estate value reached $4,350 per acre in 2025, per USDA NASS - Land Values 2025 Summary Report.
• Residential development land: Best suited for investors who can evaluate zoning, utilities, subdivision requirements, and absorption rates—especially on metro edges where growth pushes outward.
• Commercial land: Works when traffic counts, visibility, access, and nearby rooftops support retail, industrial, or mixed-use demand.
• Recreational land: Can deliver personal use plus resale demand, but requires careful diligence on access, boundaries, and any restrictions.
• Pasture and grazing land: Useful for agricultural leasing and long-term holding. For context on broader market conditions, U.S. pasture value averaged $1,920 per acre in 2025—up $90 per acre (4.9%) from 2024—according to the USDA National Agricultural Statistics Service (NASS) - Land Values 2025 Summary.

Step-by-Step: How to Invest in Tennessee Land

1) Define your end goal (before you shop)

Start with a clear plan: cash flow (leasing), appreciation (hold), entitlement and resale (develop), or personal use (recreation). Your strategy determines what “good land” actually means.

2) Research the county, not just the listing

• Comparable sales and local trends: Confirm what similar parcels actually sold for—not just asking prices.
• Zoning and future land-use maps: Verify what you can do today and what the county expects tomorrow.
• Access and utilities: Road frontage, easements, power, water, sewer/septic feasibility, and broadband can materially change value.
• Economic tailwinds: Tennessee agriculture remains a major economic engine—roughly $100 billion annually and more than 380,000 jobs—per University of Tennessee - Securing a Future for Tennessee Farms.

3) Budget for ownership, not just purchase

• Property taxes
• Insurance (including liability coverage)
• Maintenance (brush, gates, fencing, erosion control)
• Professional costs (survey, soil testing, engineering, legal)
• Development costs if you plan to build or subdivide

4) Source deals strategically

Use online marketplaces, local land agents, and county records, but also watch for auctions and off-market opportunities. The best deals often require patience and local relationships.

5) Complete land-specific due diligence

• Title review: Confirm ownership, easements, and restrictions.
• Boundary survey: Verify acreage, corners, and encroachments.
• Environmental review: Identify contamination risk and flood concerns.
• Soils and water: Essential for farming and for septic feasibility.
• Access verification: Confirm deeded legal access, not “neighbor permission.”

6) Choose the right financing structure

• Conventional loans (often stricter on raw land)
• Farm/ag loans for agricultural use
• Owner financing (common in land deals)
• Private lenders (higher cost, faster closings)

7) Negotiate with the land’s constraints in mind

Land pricing depends heavily on constraints—access, topography, zoning, wetlands, and utilities. Use findings from surveys and feasibility checks to negotiate terms, contingencies, and price.

8) Close with professional support

Use a Tennessee real estate attorney and a reputable title company to reduce risk. Land transactions can hide expensive problems when buyers skip documentation and verification.

Winning Strategies for Tennessee Land Investors

Focus on location and inevitability

• Proximity to growing cities and employment hubs
• Access to highways and key corridors
• Utility availability (or realistic cost to extend)
• Surrounding land-use direction (what’s being built nearby)

Invest with a long-term mindset

Land is typically less liquid than homes or stocks. Many investors do best when they plan for a multi-year hold and let growth, scarcity, and improvements compound value.

Track farmland conversion and farm consolidation signals

Conversion pressure and shrinking farm counts can change local supply dynamics. Between 2017 and 2022, Tennessee saw a decline of nearly 7,000 farms, most of which were less than 500 acres, according to Farmland Trust - Securing a Future for Tennessee Farms. Combine that with the 430,000 acres converted from 2017–2023 (one average-sized farm every 17 hours), per Farmland Trust - Securing a Future for Tennessee Farms, and you have a strong reason to evaluate long-run land scarcity when underwriting a deal.

Look for ethical upside through preservation and smart management

Preservation programs can protect working lands and support long-term rural value. Tennessee’s farmland preservation program has protected more than 6,400 farms covering almost 650,000 acres, and it generates an estimated $2 of economic activity for every $1 spent, according to Farmland Trust - Securing a Future for Tennessee Farms. If your goals include long-term stewardship, explore whether a property qualifies for conservation tools or agricultural-friendly programs in its county.

Challenges to Know Before You Buy

1. Liquidity: You can’t sell land instantly, and buyer pools can be smaller.
2. Valuation complexity: Two parcels with the same acreage can vary widely in value due to access, utilities, and zoning.
3. Carrying costs: Taxes, insurance, and maintenance add up even when the land sits unused.
4. Zoning and entitlement risk: Your plan may depend on approvals that take time—or don’t happen.
5. Environmental and physical constraints: Floodplains, wetlands, steep slopes, and contamination can limit use and financing.

The Fast Track Option: Selling to a Land Buying Company

If you’re selling rather than buying, a land buying company can simplify the process. These firms often purchase with cash, close quickly, and buy property as-is—reducing cleanup, marketing time, and paperwork. The trade-off is price: convenience and speed may come with a lower offer than a fully marketed retail sale.

Final Thoughts

Tennessee land can be a powerful asset when you match the right property to the right strategy and execute strong due diligence. The state’s agricultural importance—roughly $100 billion annually and more than 380,000 jobs, per University of Tennessee - Securing a Future for Tennessee Farms—supports long-term demand, while ongoing farmland conversion and shrinking farm counts reshape supply across many counties.

If you want exposure to an asset with tangible utility and long-run scarcity dynamics, Tennessee land deserves a serious look. Start with your end goal, verify feasibility, budget conservatively, and make decisions based on data—not hype.

Frequently Asked Questions (FAQs)

How much does land typically cost in Tennessee?

Land prices vary widely by location and intended use. For agricultural benchmarks, Tennessee farmland values increased by 7.7% in 2025, with cropland values rising by $260 per acre year over year, bringing the average agricultural real estate value to $4,350 per acre, according to the USDA National Agricultural Statistics Service (NASS) - Land Values 2025 Summary Report. Always confirm current comps for the specific county and property type you’re targeting.

How big is the average farm in Tennessee?

The average farm size in Tennessee is 170 acres, based on the most recent Census of Agriculture, according to Farmland Trust - Securing a Future for Tennessee Farms. For comparison, the average U.S. farm size was 466 acres in 2024, with total farmland at 876,460,000 acres, per USDA National Agricultural Statistics Service (NASS) - Farms and Land in Farms 2024 Summary.

Is farmland being converted to development in Tennessee?

Yes. Between 2017 and 2023, Tennessee converted 430,000 acres of agricultural land to non-farm uses—equivalent to one average-sized Tennessee farm every 17 hours—according to Farmland Trust - Securing a Future for Tennessee Farms. Tennessee also ranks third in the nation for projected farmland conversion between 2016 and 2040, with projections of more than one million acres converted to non-farm uses, per Farmland Trust - Securing a Future for Tennessee Farms.

What’s happening to the number of farms in Tennessee?

Between 2017 and 2022, Tennessee saw a decline of nearly 7,000 farms, most of which were less than 500 acres, according to Farmland Trust - Securing a Future for Tennessee Farms. This trend can affect local land supply, parcel sizes, and competition for productive ground.

What’s a useful benchmark for pasture land values?

As a national reference point, U.S. pasture value averaged $1,920 per acre in 2025—an increase of $90 per acre (4.9%) from 2024—according to the USDA National Agricultural Statistics Service (NASS) - Land Values 2025 Summary. Local Tennessee values can differ substantially based on region, access, and productivity.

Does Tennessee support farmland preservation?

Yes. Tennessee’s farmland preservation program has protected more than 6,400 farms covering almost 650,000 acres and generates an estimated $2 of economic activity for every $1 spent on the program, according to Farmland Trust - Securing a Future for Tennessee Farms.