Author Topic: Buying acreage  (Read 3512 times)

mrigney

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Buying acreage
« on: December 31, 2017, 12:24:44 AM »
My wife and I (and 3 kids--6/3/6 months) are starting to search for some acreage to start homesteading on. Would like something in the 10-50 acres. Long-term would like to raise some cattle, grow our own produce, etc, etc.

As we start looking for land, what are things about the land buying process that we should know? I've bought houses in town before (own two in fact), but haven't bought raw acreage w/o a house. Any advice on buying raw land and building vs buying land w/a house already built?
What are things we should look for in terms of accessibility, frontage, utilities? Well digging? What questions should we ask realtors/sellers as we look at acreage?

Any advice, anecdotes, or experience welcomed!


Dusty Dog Ranch

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Re: Buying acreage
« Reply #2 on: December 31, 2017, 11:54:04 AM »
Get this book: Finding and Buying your Place in the Country by Les Scher. Hands-down the most useful tool for us looking for and getting the first 40 acres of the ranch. Not sure what the most recent edition is, but I don't think much will have changed regarding the basic like water, access, etc.

Fishindude

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Re: Buying acreage
« Reply #3 on: January 01, 2018, 01:23:00 PM »
What part of the country are you thinking about setting up in?

Michael in ABQ

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Re: Buying acreage
« Reply #4 on: January 01, 2018, 01:46:02 PM »
If you're planning on raising any sort of crops or animals (or people for that matter) water is key. Here in New Mexico water isn't all that common and in some places drilling a well may cost $10k+ and you might still end up with a dry hole. In other places if you dig a 5-foot deep hole it will be full of water by the next day.

Site improvements (utilities, roads/driveways, fencing, etc.) will cost a lot more new than if they're already in place on the property. If it cost say $30,000 to put up a perimeter fence and grade a driveway you should be able to find an existing site with those improvements that might cost only $15,000 - $20,000 more than raw land.

Know what growing zone you're located in so you have some idea of what sort of plants will work. There's some varieties that are bred to be more cold or heat resistant or better able to tolerate dry or wet conditions. You don't want to buy trees for a small orchard that are meant for a different environment and watch them all die or never produce very much.

If you don't have direct access to a public right-of-way (i.e. a street owned and maintained by the local government) make sure there is some sort of written easement and/or access agreement in place. Banks don't like lending money on property where the legal access is questionable. Just because there's a road to the property doesn't mean it's not actually across someone else's land who never granted an easement or who will refuse to repair said road if it becomes damaged.

kbray003

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Re: Buying acreage
« Reply #5 on: January 02, 2018, 10:22:43 AM »
I'm interested in this as well, so following in order to gain advice.  My husband and I are planning a move to a rural area when he retires in 5 years, but we are looking to make the purchase very soon.  What are some ways the land (with no home) can be used to make passive income while we wait?

Michael in ABQ

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Re: Buying acreage
« Reply #6 on: January 02, 2018, 08:57:07 PM »
I'm interested in this as well, so following in order to gain advice.  My husband and I are planning a move to a rural area when he retires in 5 years, but we are looking to make the purchase very soon.  What are some ways the land (with no home) can be used to make passive income while we wait?

Land rents are typically very low - usually on the order of 1-2% of the value. Farm land might rent for something like $50/acre. Ranch land even less. The plus side is that taxes on rural land are typically very low as well, especially if you can get any sort of agricultural property tax reduction. If it's forested you can try to sell the timber but that's obviously a one-time thing and if it's a small tract it may not even be worthwhile for someone to come in an harvest it.

AccidentialMustache

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Re: Buying acreage
« Reply #7 on: January 02, 2018, 10:13:36 PM »
Farmland rent varies VASTLY with the productivity of the land. $50/ac for good land in IA/IL/IN would be dirt cheap if you'll pardon the pun. Of course acreage in same said area is in the 10-15k/ac range. Higher rents though... you probably have traditional row crop ag going -- which may not suit to what you want to do with the land later.

coopdog

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Re: Buying acreage
« Reply #8 on: January 03, 2018, 05:48:30 AM »
1. Make sure you legally build on it. This includes septic/sewer. Where I live septic permitting is difficult.
2. Make sure you can get utilities.

Fishindude

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Re: Buying acreage
« Reply #9 on: January 03, 2018, 09:03:12 AM »
Land rents are typically very low - usually on the order of 1-2% of the value. Farm land might rent for something like $50/acre. Ranch land even less. The plus side is that taxes on rural land are typically very low as well, especially if you can get any sort of agricultural property tax reduction. If it's forested you can try to sell the timber but that's obviously a one-time thing and if it's a small tract it may not even be worthwhile for someone to come in an harvest it.

Depends on where you are located and what kind of ground you have.   I'm in farming area of IN; my cheapest ground rented is $96 per acre and best is $290 per acre.   Middle of the road farm ground around here will easily net $150-200 per acre annual cash rent.   There are also some programs where you can enroll your land in permanent wildlife habitat programs and get the taxes reduced to almost nothing.   

I think true homesteading is near impossible in this day and age and most are going to need / want electric service, LP or natural gas, internet, phone & TV.   You can however pretty much feed yourself off of your own land with the right set up.   In my opinion someplace with good quality soils and ample rain for growing (the midwest) would be paramount.   You can get a heck of a lot of food out of a small garden in good soils if you work it hard, and the return is probably a whole lot better bang for the buck when you start looking at all the work that livestock requires.
« Last Edit: January 04, 2018, 12:13:39 PM by Fishindude »

mrigney

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Re: Buying acreage
« Reply #10 on: January 03, 2018, 11:37:44 PM »
Im late to my own thread. Someone asked where were looking to set up. High probability it will be north Alabama or southern middle Tennessee. I work in Huntsville and will commute in until FIRE. We are doing this as much for personal preference as for grand dreams of self sustainment. Im a homesteader in some level, but also like civilization:-). Wed like to grow our own food (have a couple hundred square foot garden at our suburban home right now). After FIRE, would like to try to start a small CSA.

Livestock is something Id like to do for fun down the road. My wifes family all raise some sort of livestock on small scales as a hobby (e.g. my father in law has about 15 head of cattle), but I have no dreams of making it big with livestock. Maybe try to get into breeding one high end cattle like Wagyu (have a connection with a local farmer) for fun someday. Who knows.

All good advice so far!

coopdog

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Re: Buying acreage
« Reply #11 on: January 04, 2018, 06:36:54 AM »
I live just south of Nashville. You shouldn't have any trouble finding an inexpensive small piece of land that fits your desires. There's lots of like minded people doing the same thing all around there. There's a great livestock trade market in Ardmore just north of Huntsville. If you end up doing a CSA, one of the top 10 wealthiest counties in the country, Williamson County, is just north of you.

mrigney

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Re: Buying acreage
« Reply #12 on: January 04, 2018, 01:31:20 PM »
@coopdog Agreed. Just need to work on making it happen.

Does anyone know what an actual downpayment on acreage needs to be %-wise? I've read in different places numbers from 20-50%. The land I've looked at so far has typically run in the $5-6k/acre range, so probably looking at $100-150k for the acreage if I stick with similar properties. So probably looking at needing to have somewhere in the neighborhood ofr $30-60k to put down I would expect?

Michael in ABQ

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Re: Buying acreage
« Reply #13 on: January 04, 2018, 03:34:40 PM »
@coopdog Agreed. Just need to work on making it happen.

Does anyone know what an actual downpayment on acreage needs to be %-wise? I've read in different places numbers from 20-50%. The land I've looked at so far has typically run in the $5-6k/acre range, so probably looking at $100-150k for the acreage if I stick with similar properties. So probably looking at needing to have somewhere in the neighborhood ofr $30-60k to put down I would expect?

I doubt any bank would loan on raw land with less than 20% down. Easy enough to find out by calling a few local lenders. They would probably be more willing to work with you on something like that than a large regional or national bank that likes their mortgages to fit in nice neat boxes so they can quickly resell them on the secondary market.

mrigney

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Re: Buying acreage
« Reply #14 on: January 04, 2018, 04:37:34 PM »
Oh yeah, I fully expect it to be no less than 20% down. Wasn't sure what was more common, though...20% or 40%. I'll check with the local credit Union I bank with.

LiveLean

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Re: Buying acreage
« Reply #15 on: January 05, 2018, 08:02:25 AM »
OP -- Have you considered forestland? It can be income generating and a lot lower maintenance than cattle, other crops, etc. Forty acres is pretty modest for that, but if you want to get in the 100-200 range, your proposed neck of the woods (no pun intended) of AL or middle TN has plenty of forest landowners who have built the proverbial lakeside cabin in the woods.

MishMash

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Re: Buying acreage
« Reply #16 on: January 05, 2018, 09:02:00 AM »
Another thing for income generation is hunting leases.  Those are huge in our area.  It's not a ton but a hey it can be an extra few grand a year.

coopdog

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Re: Buying acreage
« Reply #17 on: January 05, 2018, 06:26:17 PM »
Call Farm Credit Services. It is a quasi-government entity that often has the best rates and requirements. Most traditional lenders require 40% down on raw land. I think FCS can do better than that.

MustacheCowboy

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Re: Buying acreage
« Reply #18 on: January 06, 2018, 08:04:46 AM »
I second what Coopdog says. I work for sister organization of Farm Credit Services. Farm Credit has a mission to help people begin farming. Many times there are special incentives for beginning farmers.

Down payments required vary based on areas but generally 20-30% down for raw land is standard.

mrigney

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Re: Buying acreage
« Reply #19 on: January 06, 2018, 09:28:33 PM »
Interesting. Had never heard of Farm Credit Services. Looking into it. Also perusing my local credit union's website (where I do my banking).

https://www.redfcu.org/personal/loans/land-loans.html

It appears from that webpage that they will finance up to 90% of the appraised/purchase price (up to $150k). So, seems like there are options to look into.

Dusty Dog Ranch

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Re: Buying acreage
« Reply #20 on: January 06, 2018, 11:59:47 PM »
Also check out your nearest Farm Services Agency. Often located in a USDA Service Center. They have loans specifically for beginning farmers.

WranglerBowman

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Re: Buying acreage
« Reply #21 on: January 08, 2018, 10:54:02 AM »
+3 for Farm Credit entities.  I live in Maryland have used Colonial Farm Credit and it's awesome, 25% down minimum, very competitive rates, and since they're owned by the loan holders any profit they have at the end of the year is paid to each loan holder in the form of a credit.  Generally this ends up being about 1% drop in the interest rate of your loan on an average year.

There's a lot to know/look into about buying raw land and if you're not educated it's easy to get burned.  I would discuss with someone who knows about land development or hire and consultant.  It's important to look into a parcels; deeds, easements, zoning, watersheds, wetlands, streams, stream buffers, subdivision regulations, rare threatened or endangered species, forests, soils, percability, septic tier, access to utilities, slopes, viewsheds, etc...  I do this for a living in Maryland and it can become extremely complex.  I would imagine TN or AL is much more laid back than Maryland.

TheWifeHalf

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Re: Buying acreage
« Reply #22 on: January 08, 2018, 11:08:03 PM »
Land rents are typically very low - usually on the order of 1-2% of the value. Farm land might rent for something like $50/acre. Ranch land even less. The plus side is that taxes on rural land are typically very low as well, especially if you can get any sort of agricultural property tax reduction. If it's forested you can try to sell the timber but that's obviously a one-time thing and if it's a small tract it may not even be worthwhile for someone to come in an harvest it.

Depends on where you are located and what kind of ground you have.   I'm in farming area of IN; my cheapest ground rented is $96 per acre and best is $290 per acre.   Middle of the road farm ground around here will easily net $150-200 per acre annual cash rent.   There are also some programs where you can enroll your land in permanent wildlife habitat programs and get the taxes reduced to almost nothing.   

I think true homesteading is near impossible in this day and age and most are going to need / want electric service, LP or natural gas, internet, phone & TV.   You can however pretty much feed yourself off of your own land with the right set up.   In my opinion someplace with good quality soils and ample rain for growing (the midwest) would be paramount.   You can get a heck of a lot of food out of a small garden in good soils if you work it hard, and the return is probably a whole lot better bang for the buck when you start looking at all the work that livestock requires.

I'm in Ohio, farm community and water drainage is important. It's known as The Black Swamp.' My father was a drainage contractor, even tiled our yard.

trollwithamustache

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Re: Buying acreage
« Reply #23 on: January 09, 2018, 08:40:18 AM »
If you go through with homesteading, give us a report. The land purchase remains a fantasy of mine as well.

MishMash

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Re: Buying acreage
« Reply #24 on: January 09, 2018, 09:27:08 AM »
+3 for Farm Credit entities.  I live in Maryland have used Colonial Farm Credit and it's awesome, 25% down minimum, very competitive rates, and since they're owned by the loan holders any profit they have at the end of the year is paid to each loan holder in the form of a credit.  Generally this ends up being about 1% drop in the interest rate of your loan on an average year.

There's a lot to know/look into about buying raw land and if you're not educated it's easy to get burned.  I would discuss with someone who knows about land development or hire and consultant.  It's important to look into a parcels; deeds, easements, zoning, watersheds, wetlands, streams, stream buffers, subdivision regulations, rare threatened or endangered species, forests, soils, percability, septic tier, access to utilities, slopes, viewsheds, etc...  I do this for a living in Maryland and it can become extremely complex.  I would imagine TN or AL is much more laid back than Maryland.

Wrangler, we are actually looking at buying land in MD (eastern shore), do you have any recommendations on resources we can check in with?  I am well aware of perc tests and utilities and easements but you mentioned a few things I did not think about.

WranglerBowman

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Re: Buying acreage
« Reply #25 on: January 17, 2018, 10:34:50 AM »
+3 for Farm Credit entities.  I live in Maryland have used Colonial Farm Credit and it's awesome, 25% down minimum, very competitive rates, and since they're owned by the loan holders any profit they have at the end of the year is paid to each loan holder in the form of a credit.  Generally this ends up being about 1% drop in the interest rate of your loan on an average year.

There's a lot to know/look into about buying raw land and if you're not educated it's easy to get burned.  I would discuss with someone who knows about land development or hire and consultant.  It's important to look into a parcels; deeds, easements, zoning, watersheds, wetlands, streams, stream buffers, subdivision regulations, rare threatened or endangered species, forests, soils, percability, septic tier, access to utilities, slopes, viewsheds, etc...  I do this for a living in Maryland and it can become extremely complex.  I would imagine TN or AL is much more laid back than Maryland.

Wrangler, we are actually looking at buying land in MD (eastern shore), do you have any recommendations on resources we can check in with?  I am well aware of perc tests and utilities and easements but you mentioned a few things I did not think about.

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Car Jack

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Re: Buying acreage
« Reply #26 on: January 17, 2018, 01:14:24 PM »
You want to know the local governmental environment.  I live in a town where I've concluded that they surveyed all restrictive laws in the entire country and implemented all of them.  We have a 35 acre lot down the street that has changed hands several times of the 25 years I've been here.  Where access to the road is, there is wetlands.  Developers come in and think "no problem, I know how to build a road there".  Nope.  They go in front of the conservation commission and are denied.  One got desperate enough to include neighboring land, saying that they're in talks with the owner and once acquired, they'd have the dry access that they need.  One problem......one of the conservation commissioners owned the land and was in no such talks.

Ok, so how's it zoned?  Do you have proper access and enough frontage to eventually build?  If forest land (I forest manage my land), what is marketable.  Timber on my land has zero value at the lumber yard half a mile from my house.  Why?  They have more than enough aging.  Other yards will pay something but because of the distance, it's not worth the bother.  I do cut hardwood for my own firewood use so it's worth it to me.  I also am in a state program to reduce my taxes to 10% of assessed value on the forest acreage.  Look into these programs.  Similar ones exist for farmland.

Good luck.