Author Topic: Looking at Another Farm  (Read 1722 times)

Fishindude

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Looking at Another Farm
« on: June 19, 2018, 02:20:44 PM »
Put an offer in yesterday on a 112 acre farm in southern Illinois.
(83) acres tillable and the balance in pasture, woodlots and two ponds.
Cross my fingers and see what happens.

Xlar

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Re: Looking at Another Farm
« Reply #1 on: June 19, 2018, 05:18:11 PM »
That sounds exciting, good luck! What's your plan to earn income from the farm, rent out the tillable acreage?


daverobev

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Re: Looking at Another Farm
« Reply #2 on: June 19, 2018, 05:50:21 PM »
What sort of price does something like that go for? 'They aren't making any more land' is as true as it gets (well, except in Dubai/the South China Sea/the Netherlands I guess, ha).

MrUpwardlyMobile

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Re: Looking at Another Farm
« Reply #3 on: June 19, 2018, 05:58:46 PM »
Put an offer in yesterday on a 112 acre farm in southern Illinois.
(83) acres tillable and the balance in pasture, woodlots and two ponds.
Cross my fingers and see what happens.

Fishindude, do you know much about rural land? Id love to pick your brain on the subject.

Fishindude

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Re: Looking at Another Farm
« Reply #4 on: June 20, 2018, 08:47:09 AM »
If successful, this will be the 8th farm we have purchased, so not new to the game.  The returns are not huge but they are consistent and you would be very unlikely to ever have a year where you didn't get the return, unlike stocks or other investments.    We cash rent our tillable farm ground for annual income and some of our non-tillable is in various CRP programs that also earn some income.   You can also selectively harvest timber from woodlots every 15 years or so to bring in some cash, and there are habitat programs you can enroll land in to reduce the taxes to nearly nothing.

I think it's a great way to preserve money and in all likelihood get some long term appreciation and some annual income along the way.   I like to hunt, fish and do around the farm chores and tinkering anyway, so that is a big plus as well.

MrUpwardlyMobile

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Re: Looking at Another Farm
« Reply #5 on: June 20, 2018, 12:51:31 PM »
If successful, this will be the 8th farm we have purchased, so not new to the game.  The returns are not huge but they are consistent and you would be very unlikely to ever have a year where you didn't get the return, unlike stocks or other investments.    We cash rent our tillable farm ground for annual income and some of our non-tillable is in various CRP programs that also earn some income.   You can also selectively harvest timber from woodlots every 15 years or so to bring in some cash, and there are habitat programs you can enroll land in to reduce the taxes to nearly nothing.

I think it's a great way to preserve money and in all likelihood get some long term appreciation and some annual income along the way.   I like to hunt, fish and do around the farm chores and tinkering anyway, so that is a big plus as well.

How much of an investment does rural land require?

Fishindude

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Re: Looking at Another Farm
« Reply #6 on: June 20, 2018, 01:02:43 PM »
How much of an investment does rural land require?

Prices are all over the board, depends on how much, where, and what it's good for.
The better it is for growing crops, the more it is worth generally.   The very best farm ground in the midwest sells for $10-12,000 per acre or more, while "rough ground", marshy, wooded, rugged terrain, etc. might sell for $1500 per acre.

MrUpwardlyMobile

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Re: Looking at Another Farm
« Reply #7 on: June 20, 2018, 05:13:51 PM »
How much of an investment does rural land require?

Prices are all over the board, depends on how much, where, and what it's good for.
The better it is for growing crops, the more it is worth generally.   The very best farm ground in the midwest sells for $10-12,000 per acre or more, while "rough ground", marshy, wooded, rugged terrain, etc. might sell for $1500 per acre.

What do you look for in a piece of investment property in rural land?

Fishindude

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Re: Looking at Another Farm
« Reply #8 on: June 21, 2018, 08:19:24 AM »
What do you look for in a piece of investment property in rural land?

Different strokes for different folks.   Having sold out of a business, I have excess cash I want to get deployed into something safe (other than the stock market) for long term appreciation and to earn some additional retirement income.   I'm also a very avid outdoorsman and whitetail deer hunter, so this farm will give me another hunting property within a few miles of an my hunting camp & cabin.   Fishing ponds too, mushroom hunting and other recreational opportunities.

Things I looked at:
* Is it affordable?
* Will it earn some decent annual income?
* Are taxes reasonable?
* Are there any other upkeep expenses?
* Does it fit well with the things I like to do?
* Is it somewhere I will be able to check on pretty regularly?
* Are the neighbors a negative issue?



MrUpwardlyMobile

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Re: Looking at Another Farm
« Reply #9 on: June 21, 2018, 07:26:37 PM »
What do you look for in a piece of investment property in rural land?

Different strokes for different folks.   Having sold out of a business, I have excess cash I want to get deployed into something safe (other than the stock market) for long term appreciation and to earn some additional retirement income.   I'm also a very avid outdoorsman and whitetail deer hunter, so this farm will give me another hunting property within a few miles of an my hunting camp & cabin.   Fishing ponds too, mushroom hunting and other recreational opportunities.

Things I looked at:
* Is it affordable?
* Will it earn some decent annual income?
* Are taxes reasonable?
* Are there any other upkeep expenses?
* Does it fit well with the things I like to do?
* Is it somewhere I will be able to check on pretty regularly?
* Are the neighbors a negative issue?

Are you financing the properties or buying with cash? How much income do you try to shoot for from a property? Do you measure income  by tillable acre or total?

Fishindude

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Re: Looking at Another Farm
« Reply #10 on: June 22, 2018, 06:30:05 AM »
Are you financing the properties or buying with cash? How much income do you try to shoot for from a property? Do you measure income  by tillable acre or total?

I buy with cash.
Income varies, but returns are traditionally better than CD's and not as good as market investments like mutual funds.   You won't have years that you lose money.
I measure income by how many total dollars the farm kicks back to me (less expenses) annually.

Fishindude

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Re: Looking at Another Farm
« Reply #11 on: June 26, 2018, 08:49:36 AM »
Well, the realtor tells me we got it.
Will close in next month or so.   Plenty of time between now and next spring to line up a farmer for the ground.

Cezil

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Re: Looking at Another Farm
« Reply #12 on: June 26, 2018, 10:05:31 AM »
Well, the realtor tells me we got it.
Will close in next month or so.   Plenty of time between now and next spring to line up a farmer for the ground.

Congratulations!  Buying land is something we have wanted to do in the past couple years, and I'm happy I found this thread.  When we mention it, people look at us like we have two heads, and not very many people are know are knowledgeable on the topic of buying-land-to-make-money.  Do you have any resources you'd care to share for those who are highly interested?

Dicey

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Re: Looking at Another Farm
« Reply #13 on: June 26, 2018, 10:06:48 AM »
What sort of price does something like that go for? 'They aren't making any more land' is as true as it gets (well, except in Dubai/the South China Sea/the Netherlands I guess, ha).
You forgot Hawaii.

Congratulations, @Fishindude!

TheOnlyJustin

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Re: Looking at Another Farm
« Reply #14 on: June 26, 2018, 10:09:05 AM »
Well, the realtor tells me we got it.
Will close in next month or so.   Plenty of time between now and next spring to line up a farmer for the ground.

Awesome! We are on 43 acres in Texas. Land prices are rising upwards of $10K per acre where I am and its not feasible financially to turn a profit there but I suppose its still a great way to accomplish what you are looking for. Good luck on this and your future deals.

Gone Fishing

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Re: Looking at Another Farm
« Reply #15 on: June 26, 2018, 10:21:24 AM »
Nice.  I could never make the numbers work in our area.  I love some decent hunting and fishing land to live on, but we'd have to move pretty far to get it. 

Michael in ABQ

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Re: Looking at Another Farm
« Reply #16 on: June 26, 2018, 06:01:33 PM »
Out of curiosity, how do you find tenants to farm? My dad recently sold an 80-acre farm he had owned for decades and part of the reason was the difficulty in finding someone to farm it. This was in central Oregon (wheat) and since it wasn't irrigated the yields weren't great. It sold for about $1,000 an acre to a neighbor who wanted to raise buffalo. The neighbor had recently bought the farm across the street to grow marijuana - albeit in a greenhouse.

wbranch

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Re: Looking at Another Farm
« Reply #17 on: June 27, 2018, 10:00:59 AM »
Awesome! I know a lot of people involved in farming and farmland investing that have done very well (and a few that have not). A few bought in the early 2000s for <$3k/acre and the land now cash rents for 250+ and would sell for 10k+/acre. Most of those properties never hit the market, you have to know a guy who has a friend with a great aunt selling.

Fishindude

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Re: Looking at Another Farm
« Reply #18 on: June 27, 2018, 11:24:49 AM »
Out of curiosity, how do you find tenants to farm? My dad recently sold an 80-acre farm he had owned for decades and part of the reason was the difficulty in finding someone to farm it. This was in central Oregon (wheat) and since it wasn't irrigated the yields weren't great. It sold for about $1,000 an acre to a neighbor who wanted to raise buffalo. The neighbor had recently bought the farm across the street to grow marijuana - albeit in a greenhouse.

The midwest is pretty desirable farmland, so it's typically not difficult to find someone to farm your ground so long as you are fair in pricing it.  My first attempt will be to cash rent to the current farmer.  If that falls through I'll just touch base with a couple other large farmers in the area.

Michael in ABQ

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Re: Looking at Another Farm
« Reply #19 on: June 27, 2018, 05:53:53 PM »
Out of curiosity, how do you find tenants to farm? My dad recently sold an 80-acre farm he had owned for decades and part of the reason was the difficulty in finding someone to farm it. This was in central Oregon (wheat) and since it wasn't irrigated the yields weren't great. It sold for about $1,000 an acre to a neighbor who wanted to raise buffalo. The neighbor had recently bought the farm across the street to grow marijuana - albeit in a greenhouse.

The midwest is pretty desirable farmland, so it's typically not difficult to find someone to farm your ground so long as you are fair in pricing it.  My first attempt will be to cash rent to the current farmer.  If that falls through I'll just touch base with a couple other large farmers in the area.


Do you advertise on Craigslist or somewhere else? Stick a sign in the ground? Or is it just a matter of knowing who the local farmers are in the area that might be interested? I worked in commercial real estate for the last decade so I'm used to how commercial landlords find tenants for buildings and it's usually via a broker, sign, or some form of online advertising. Just curious how different it is in the agricultural world.

Fishindude

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Re: Looking at Another Farm
« Reply #20 on: June 27, 2018, 06:19:13 PM »
Do you advertise on Craigslist or somewhere else? Stick a sign in the ground? Or is it just a matter of knowing who the local farmers are in the area that might be interested? I worked in commercial real estate for the last decade so I'm used to how commercial landlords find tenants for buildings and it's usually via a broker, sign, or some form of online advertising. Just curious how different it is in the agricultural world.

It's just not that difficult.  The folks that are going to want to farm it are going to be farmers who operate right in the same general area, there are always a few of them competing to acquire more ground.   It will probably just be a matter of asking around and making a couple visits or phone calls.   Seriously doubt I will have to resort to advertising.