Top Eleven Reasons Not To Miss NLC18!

It’s only December, but here at RLI, we’re already excited for the 2018 National Land Conference! It’s an amazing time of year when the best of the best in land real estate come together to share knowledge, network, and have a ton of fun together. Since we did the Top Ten Reasons to Attend the 2017 National Land Conference last year, this year we are counting down the Top Eleven Reasons to Attend the NLC18 on March 12-14 in Nashville, TN.

  1. Nashville, TN – The Music City!

This year’s location is none other than Music City, USA. The hotel is located in the heart of downtown Nashville, so you’ll be within walking distance of landmarks such as the Country Music Hall of Fame, Bridgestone Arena (home of the Nashville Predators), and plenty of honky-tonks. We’ll also be hosting our Welcome Reception at The Valentine — aka Broadway’s Biggest Party!

  1. The Variety of the Sessions

Even the most seasoned land professional can learn something new in our line-up of breakout sessions. The Breakout Sessions include topics like timberland, social media, the 2018 Farm Bill, title issues, investing in land, hemp, and so much more.

  1. Our Partners

Drop by the exhibit hall to meet some of our partners and explore the variety of services and products they have to offer. NLC18 wouldn’t be possible without partners like United Country Real Estate, Keller Williams Farm & Ranch, and so many more!

  1. The Cowboy Auction: Pony Up!

Bid on hunting trips, autographed memorabilia, vacation packages, and more! We’ll have a more detailed list of items to bid on as the event draws closer. This lively event raises money for the Land Education Foundation (LEF).

  1. Amazing Expert Speakers

The best of the best come out for the National Land Conference, and 2018 is no different. Dr. Mark Dotzour, the Chief Economist of the Real Estate Center at Texas A&M University, has had his research featured in Wall Street Journal, USA Today, and Business Week. We’ll also have on site expert speaker is Edsel Charles, the Founder and Chairman of the Board for MarketGraphics Research Group, INC. These two men are coming to NLC18 to share their knowledge and answer questions from the audience. Where else could you get such an opportunity but at NLC18?

  1. Have Your Voice Heard

With chapters in eighteen states and over a thousand members, you might think that it would be hard to have an input with such a big organization. However, with sessions like the RLI Town Hall and RLI Chapter Workshop Meeting, you can have a chance to make a difference and have your voice heard by (and hear from) hundreds of other RLI members.

  1. The Land Tech Accelerator Program

This new addition to the conference is a look into the future of land real estate. The 2018 New Technology Partners will showcase the latest technologies for land real estate and showcase how they can improve your business.

  1. Pre-Conference Tour of Jack Daniel’s Distillery

Kick off the week the Nashville Way! Take a tour of the Jack Daniel’s Distillery and learn the history behind this famous whisky. Afterwards, sip five different types of whisky and liqueur at Barrel House 1-14. There are a limited number of spots for this event and registration is first-come-first-serve—so get your tickets today!

  1. The Return of Let’s Make Deal$ LIVE

It’s back by popular demand! This fan favorite event is a live Haves & Wants session where you can showcase your client’s property to over 250 other brokers/agents and their clients. It is the largest opportunity to market and buy land in the industry, so don’t miss out on this amazing business opportunity to make deals.

  1. The Chance to Network

With texting, social media, and LinkedIn, it seems as if there are fewer and fewer opportunities to network with people offline. At NLC18, not only do you get to meet fellow professionals from all over the country, but you will be interacting with the best of the best.

  1. The 2018 RLI APEX Awards

Topping off our list is a new addition to the NLC rotation. NLC18 will include the first-ever APEX Awards Program. The APEX Awards Program celebrates outstanding RLI members and their accomplishments. Awards will be given to the top twenty producers, as well as top brokers in the categories of Crops, Ranches, Recreational Land, Timber Land, Commercial Land, Residential Land, and Auction Sales. Will you be recognized as one of the nation’s top producers? Apply and attend to find out!

tax reform; capitol building

Take Action: Protect The 1031 Exchange

The REALTORS® Land Institute and National Association of REALTORS® need your help to ensure the 1031 exchange remains protected in the proposed Tax Plan. Both the House and the Senate have released their tax reform plans retaining 1031 like-kind exchanges for land and real estate. However, we cannot be complacent – there is still a risk to 1031s as the tax reform proposals make their way through the legislative process.

The REALTORS® Land Institute and NAR need your help to protect 1031 like-kind exchanges for land and real estate. We encourage all landowners and land professionals to take action and help us ensure this valuable tax code makes it safely through the as the new Tax Plan moves forward.

Two Ways To Action:

1. Email this letter to your Members of Congress here.

OR

2. Call your Members of Congress and inform them of the importance of protecting the 1031 Exchange. You may use the information in this letter as a reference.

For more talking points or information on 1031s and their importance, visit our Advocacy page or our member resources center.

Template Letter to Send to Your Member of Congress

Dear Member of Congress,

As Congress considers ways to create jobs, grow the economy, and raise wages through comprehensive tax reform, I want to thank you for retaining current law regarding like-kind exchanges for land and real estate under Section 1031 of the Internal Revenue Code.

I would also urge you to retain this important land investment tool as the bill moves through the legislative process. Like-kind exchanges are integral to the operation and vitality of thousands of American businesses, especially in the land real estate sector. Like-kind exchanges allow taxpayers to exchange investment and business property for similar types of property, to diversify or consolidate holdings, and to transition to meet changing business needs.

A recent economic study found that like-kind exchanges encourage real estate and other capital investments.[1] This study also concluded that taxpayers engaged in a like-kind exchange make significantly greater investments in replacement property than non-exchanging buyers.

The elimination or restriction of like-kind exchanges would increase the cost of capital, slow the rate of investment, and decrease real estate transactions. It will have a negative effect on land transactions since land is not allowed to be expensed. Restricting this tool will lower land values across the country, which will negatively impact rural counties’ tax base and economic potential.

Like-kind exchanges promote tax reform goals such as economic growth, job creation, and increased competitiveness. Restricting them would hinder economic activity and investment, particularly in land.  It is an essential tool used by family farmers and ranchers and should be retained.

Thank you for your consideration of this important matter.

Sincerely,

[1] David Ling and Milena Petrova, The Economic Impact of Repealing or limiting Section 1031 Like-Kind Exchanges in Real Estate (March 2015, revised June 2015), at 5, available at http://www.1031taxreform.com/wp-content/uploads/Ling-Petrova-Economic-Impact-of-Repealing-or-Limiting-Section-1031-in-Real-Estate.pdf.

Top Tips For Land Agents to Beat Holiday Stress

Few people understand how tough it is to be in the land real estate business during the holidays. You don’t just have a nine-to-five job, you’re working around the clock. You have to work around the schedules of the clients, which in many cases means early mornings, late nights, and weekends where you are barely home. And while December is notorious for being one of the worst months to sell land real estate, many people use the holiday free-time to look around for properties. Putting all this together can make the most wonderful time of the year into a nightmare.

So, with an increase in work and the holidays right around the corner, how is a successful land real estate agent supposed to stay on top of their work and also enjoy time with their friends and family? Below, we’ve rounded up some great ways to handle the holiday craziness.

Want to learn more about how to stay sane during the crazy holiday times? Be sure to check out RLI’s ALC-to-ALC teleconference ‘Being Your Best-Reduce Stress, Maximize Productivity, Stay Healthy’. A recording will be made available to everyone after the event. In the meantime, here are some quick tips to get you started:

1. Focus on your target audience.

You don’t want to spread yourself too thin during the holiday season. So instead of reaching out to every type of client that comes your way and running yourself ragged, try to focus on serious potential buyers and the projects you already have. This way, you can focus all your energy into projects that will have the best payout for you.

2. Budget

The holidays can be a stressful time on anybody’s wallet, but it can be especially hard on those in the land real estate business. Since income is tied to sales instead of a 9-to-5 paycheck, it can be hard to figure out how much money you’ll have to spend on presents and other holiday fun. If you haven’t tried budgeting before, now is a great time to start. Once you figure out how much you usually spend a month, you can get a conservative estimate about how much you’ll have leftover for the holidays. Here’s a link to learn more about budgeting.

3. Take Control of Your Time

Anyone who tells you “It must be great to be able to pick which hours you work!” has never worked in land real estate. You might not have to clock in from 9-5 Monday through Friday, but the hours can be grueling. Add on top of that family events, mass, pageants, shopping, and you’ve got a tight schedule.

While a huge part of working in land real estate revolves around the clients, there are some things you can do to reclaim your time. Scheduling meetings with clients as early in advance as possible will let you plan other things around it. And if you aren’t typically the most organized, now’s the time to change that (at least for the holiday season). You can use a physical planner or an online one, like Google Calendar. Seeing your time laid out in a planner is a great way to stay updated on what needs to be done and when.

4. Sleep

Sleep is the one thing that everyone thinks they can skimp on. Some people carry their lack of sleep like a badge of honor. Even though it might make you feel good to say “I’ve been working so hard, I only slept two hours last night!” getting no sleep can take a serious toll on your work and your health, which will hurt your career. Also, skimping on sleep is a guaranteed way to make your body more prone to catching a cold, which is the last thing you need during the holiday season.

5. Limit Time on Tech.

Do you ever feel like you spend all day answering texts and e-mails, but never actually get anything checked off of your to-do list? Even though it’s a necessary part of any job, technology can be a huge time waster. The real time-suckers are those e-mails that don’t require an instant reply. Try putting those aside to focus on projects that need your full attention and see how much extra time you have at the end of the day.

6. Eat Well.

We know this is tough to hear during the season of roast turkey, gingerbread cookies, and eggnog, but you’re going to need all the energy you have to make the most out of this time of year. Sugary treats can keep you up at night, limitng the time you have for the all-important sleep, and fatty foods can zap your energy. Does this mean you can only eat salads during the most delicious time of the year? Of course not! Making a few changes each day (switching soda for water, getting a side salad instead of fries, keeping healthy snacks with you) can make a huge difference. You’ll notice an increase in your energy and focus (and maybe even how your favorite pair of pants fit) in no time.

7. Remember What It’s All For.

Between all the stress, hard work, and tension that comes with the holidays, sometimes it’s easy to just want them to be over. But it’s important to keep in mind what makes the holidays so special. Think about your favorite part of the holidays. Is it eating a good meal with your family? Going to church Christmas morning? Unwrapping presents first thing in the morning? Whatever it is, remind yourself of those special moments whenever you can. Putting some pictures of good family times from previous Christmases around your work space can help bring holiday cheer into your day.

8. Cut yourself some slack.

Everyone has to make sacrifices during the holidays, especially people who work in land real estate. Maybe that means spending less time at work or having to skip a Christmas party with your friends. Don’t beat yourself up for not being able to do everything that everyone wants you to do. Remind yourself that no one is able to “do it all” during the holiday season.

 

wind energy

Does Wind Cool a Hot Housing Market, or are Wind Farm Worries Overblown?

For most of us, buying a home is the most financially consequential decision we make. So it makes sense to protect that investment—and find out how major developments in the neighborhood will affect our most valuable asset.

Traditionally, three factors have an outsized impact on home values: strength of the local economy, low taxes, and access to good schools. For rural communities that may go years between major investments, the arrival of a wind farm has large benefits in all three areas.

Over 99 percent of wind power projects are built in rural America and on private land. That means project owners lease small segments of property from large landowners—usually farmers and ranchers. The concrete pads on which they build wind turbines, and the gravel lanes to reach them, typically leave 98 percent of the land undisturbed and available for other uses, such as crops, livestock, hunting, and off-road vehicles.

And the checks start arriving for thousands of dollars per turbine per year.

Those lease payments can really add up: in 2016 alone they totaled $245 million across America, a figure that is steadily rising. That creates a steady source of income for landowners, as well as a new tax base that agricultural communities can count on. It’s especially meaningful during years of drought, poor harvests, or crashes in commodity prices. In fact, many farmers call wind their new drought-proof cash crop.

“It will not change how we operate, it will not change anything about our lives. But it will be an additional income stream that I suspect will be very handy,” said John Dudley, whose family has been ranching in Comanche, Texas, since the 1880’s. “It’ll allow [our] family to have that ranch for a long time.”

Dr. Sarah Mills of the University of Michigan’s Gerald R. Ford School of Public Policy recently examined the concrete benefits of wind income for Michigan farmers. Among her findings:

  • Farmers with turbines on their land have invested twice as much in their operations over the last five years as those without them.
  • Turbine-hosting farmers have purchased more farmland in the last five years than non-hosts.
  • Farmers with turbines are more likely to believe their property will be farmed in the future, and they’re more likely to have a succession plan in place for when they retire.

Crucially, Mills also found that landowners with wind turbines spent significantly more on improving their homes and farms.

Beyond income for farmers and ranchers, wind projects also create jobs in the local community. Wind turbine technicians, one of America’s two fastest growing jobs according to the U.S. Bureau of Labor Statistics, are needed to operate and maintain projects. That offers new career opportunities for young people.

It also helps small businesses thrive, another key component in keeping local economies healthy. For example, Auxilius Heavy Industries, based in Fowler, Indiana, performs services for many of the area’s local wind farms. The company has been able to double in size each of the four years since its founding.

Community members don’t need to work in wind or host turbines on their land to realize its benefits, however. Because they are usually built in rural areas with low tax bases, wind farms often become a county’s largest taxpayer. That boosts local budgets and can help pay to fix roads or build new hospitals, without having to raise taxes. In fact, in some communities, wind revenue renders local taxes totally unnecessary. In Sheldon, New York, for example, the town abolished local taxes for eight years because wind revenue covered all of its budgetary needs.

Wind’s extra revenue also strengthens the third pillar of home valuation: access to a strong school system. New financial resources from wind allow rural school districts to offer services they otherwise would not be able to.

“Oh my gosh, it’s been a game changer for us,” said Jeff Synder, superintendent of the Lincolnview school district in Van Wert, Ohio. “Now we have the windmill money opportunity, we have $400,000 per year for 20 [years]. I didn’t have to pass one levy, ask [our taxpayers] for anything.”

The Lincolnview school district was able to provide every student grade K through 12 with a laptop, and fully fund the repair and replacement program. In New York, the Lowville school district used wind revenue to build a new athletic field and offer advanced placement courses, and it has a swim team called The Turbines. In fact, students from the Lowville district perform so well on standardized tests, compared to areas with similarly low average family income, that researchers from Syracuse University are now studying Lowville to see what makes it so successful. The added programs funded by wind surely play a role in the system’s success.

For those concerned about the impacts of wind farms on property values, the evidence shows there is no cause for concern — long-term, comprehensive studies show wind power doesn’t affect property values. In 2014, Lawrence Berkeley National Laboratory (LBNL) along with University of Connecticut examined 122,000 home sales near 26 wind facilities in densely populated Massachusetts between 1998 and 2012, comparing transactions within a half-mile (1,500 of the sales) to similar transactions up to five miles away. Based on a detailed analysis the researchers were unable to uncover any impacts to nearby home property values.

LBNL has conducted two other major studies on this topic (in 2009 and 2013), and in all cases, found no statistical evidence that operating wind turbines have had any measurable impact on home sales prices. As an author of the 2009 report stated “Neither the view of wind energy facilities nor the distance of the home to those facilities was found to have any consistent, measurable, and significant effect on the selling prices of nearby homes.”

“Wind is a lucrative, sustainable ‘crop’ for our farmers and entire community,” said Susan Munroe, president and CEO of Van Wert County’s Chamber of Commerce. “We hope to continue to harvest wind to not only build economic success for our county but provide sustainable, renewable energy for our state.”

About the Author: Greg Alvarez is the Deputy Director, External Communications, for the American Wind Energy Association.

 

Is Virtual Reality in the Future for Land Real Estate?

Nowadays, the technology in land real estate is looking more and more like something out of a science fiction movie. First, drones flew into popularity among landowners to take aerial pictures and film videos of properties (read more about drones here). Now, virtual reality tours are popping up on the internet, offering 360 views of properties and a more in-depth look at farm life than ever before. We’re going to take a look at this new technology and the pros and cons of investing in your own virtual tours.

First of all, what exactly is a virtual reality tour? You might be thinking of something out of The Jetsons. It’s much simpler than that. A virtual tour uses a combination of photographs and videos to allow someone to explore a location using their phone or computer. Recently, technology has become so advanced that some videos have a 360-degree feature where you can use your mouse to explore every inch of a property. Other companies are using virtual reality headsets so advanced that you feel like you are walking in the middle of an apple orchard when you are actually just standing in the middle of your living room.

One example of this new technology is FarmFoods360, a virtual reality site that lets you explore Canadian farms. There are sixteen different types of farms to tour, ranging from the usual (egg farms and fruit farms) to the unique (ratite, a type of flightless bird originally from South America). Videos with 360-degree access allow you to learn everything from how the animals are kept to how cabbage is harvested. If you click on Dairy Cow Farms, you can view the milking stations, the different types of stalls, and calf barns. Each tour is chock-full with enough facts about the livestock and crops to satisfy even the nosiest customer.

Even though virtual reality tours sound great, every technology has its drawbacks. Let’s take a look at the upsides and downsides of this new technology.

UPSIDES

-Clients can view properties from their own home. You can save yourself and your clients time and money by replacing in-person tours with online ones. They can view your properties from the comfort of their own couch. Also, having a virtual tour expands your working hours with no extra effort to you. Your virtual tour will be open twenty-four hours a day, seven days a week. It’s like a permanent open house!

-Food transparency. Have you noticed a new wave of customers who want to know exactly where their food came from and what is in it? More people than ever are interested in ‘food transparency’, where and how their food is raised.  In a 2015 Trace One survey, 91% of respondents said it’s important for them to know where their food comes from.Virtual tours let customers explore farms and see how their food is raised.

-Shareability. In the age of social media, it’s easier than ever to share information. With one click, you can share a link to your virtual tour to social media sites and high traffic blogs (like the REALTORS® Land Institute blog!). This is an easy way to reach out to new clients and keep current ones updated on your latest properties.

DOWNSIDES

-Virtual tours can be pricey. If you opt for more high-tech virtual reality equipment, it’s going to cost you. A VR computer can cost over $1,000, and high-end headsets can range from $50-$600. Even the cheaper options can end up being more expensive than you’d think. Matterport 3D Camera, a company that uses 3-D scanning to photograph properties, charges around $100 to $200 to capture a property. If you are selling multiple or large properties, this could get expensive fast.

-New tech glitches. Because virtual reality is so new, there are bound to be glitches. Some common glitches include blurry photos and broken links. Some people who use virtual reality headsets claim that the headsets gave them motion sickness if they kept them on for too long.

-The human touch. Some people prefer to walk around the properties they are considering buying and meeting the owners face-to-face. While virtual tours are better for convenience, there is something special about in person visits that can get lost online.   

Taking this all into consideration, are virtual reality tours worth it? Our answer is: yes. While it is a relatively new technology that can glitch and isn’t the cheapest option, virtual tours are simply the best marketing tool in our new world. Today’s customers value convenience and expertise, and virtual tours can give that to them.

Some people still don’t like the idea of virtual reality tours. Some people claim that they prefer the “authenticity” of a real visit instead of a virtual one, while other people are worried about the cost. There was a similar reluctance when drones were first introduced to the world of land real estate. Even though drones were able to get aerial shots of land that were previously impossible to get, almost no one bought a drone. The first commercial drones were outrageously expensive and required a license to fly them. Over time, the prices dropped and people discovered that drones could do more than just take great photos of land. Drones can track hurricanes, track wildlife, and take pictures of poachers.  Now, there are over 600,000 commercial drones in the air.

While some of the more high-end virtual reality equipment like headsets are out of the price range for the average land seller, there are simple and cheap ways to get on board with the newest wave of technology. Check out sites like YouVisit and Homes & Land  to learn about cost effective ways to incorporate virtual reality into your business.

raw land

How Raw Land Investments Can Equal Retirement Income

Raw land investments can serve many lucrative purposes, but have you considered retirement income among them? From rental properties to fix-and-flips, retirement investors have utilized their business expertise to build a comfortable future. Some investors may not realize that property is a permissible retirement asset, but tax-advantaged savings vehicles like IRAs and 401(k)s can own a house, commercial building, or vacant land the same way they can own stocks. These accounts feature tax benefits that can help offset any tax-related concerns that may otherwise deter a potential real estate investor. Pre-developed land has flown under the radar as a viable option for real estate IRAs, but that has changed rapidly over the last several years. 

The beauty of self-directed retirement lies in the hands-on nature of certain business activities. In the context of a vacant land deal, the roles of the broker and of the investor are virtually the same as a transaction with non-retirement funds. Investors must maintain a degree of distance from their IRA holdings, but they’re still able to establish terms and prepare documentation. IRA holders may even pursue non-recourse financing on behalf of their plans to broaden their purchasing options or compensate for a capital deficiency. 

 Although an IRA—as its own investment entity independent of the IRA holder—is able to invest in raw land, the plan holder must follow certain rules to avoid prohibited transactions and possible tax consequences. If your piece of IRA-owned property needs some measure of work before leasing or selling it, the use of personal funds, assets, or efforts would be limited or restricted. For instance, your IRA may own a plot that you’d like to lease as farmland, but there’s a dilapidated barn that has to be removed before you can proceed. Because your retirement plan owns the land, you may not pay for the barn’s demolition and removal with your own money, nor may you fire up a bulldozer to knock it down yourself. Any and all expenses inherent to the development, maintenance, or repair of the property must be covered with IRA funds.  

 In maintaining suitable distance from their retirement assets, investors must also be careful not to conduct IRA business with disqualified persons. Such individuals include anyone in the plan holder’s direct familial lineage or their spouses (daughter, father, son-in-law, etc.) and any individuals with fiduciary responsibilities to the IRA. Non-lineal family members like siblings, existing business partners, or trusted friends are non-disqualified persons and may therefore interact with the IRA more directly. They can provide repair services, serve as property managers, or even take up residence as your tenants. Concerns regarding disqualified persons revolve around the separation of one’s personal funds from his or her retirement dollars. IRAs and other such accounts provide significant benefits, so it’s important that tax-advantaged income never reaches the personal bank accounts of plan holders. 

 That being said, disqualified persons are not 100% prohibited from getting involved with IRA-owned assets. Keeping the money separate may prove especially challenging under these circumstances, but partnering with disqualified persons is certainly possible. Let’s review a few example scenarios that may arise when a self-directed retirement plan and a disqualified person work together on a vacant land investment: 

  • Your IRA and your father own a piece of raw land together, each with a 50% equity share. 
  • If you both decide to sell the property, you would each receive 50% of the sale proceeds in accordance with your ownership percentages. Any other income from the asset would be distributed evenly in the same fashion.   
  • Let’s say you elect to sell your IRA’s portion but your father wants to keep his. This is perfectly allowable as long as the IRA portion isn’t sold to a disqualified person (including you). 
  • If you decide to build a residential or commercial property, all expenses would have to be covered in equal amounts. Both parties could pay no more or less than 50% of any applicable costs. 
  • Just as you wouldn’t be able to retain your IRA’s money on a personal basis, your father could not accept income credited to your IRA.  

Whether you go in alone or pursue an investment with a series of partners, a raw land investment with a self-directed IRA is worth considering. The same approaches that you’ve already mastered—hold and flip, land leasing, construction, etc.—can be applied to assume genuine control over your retirement. Your IRA has the opportunity to yield the same profits that you’ve come to enjoy with your personal pursuits, all while garnering the tax-deferred or tax-free benefits that are only available through retirement investing. A growing marketplace of offerings, expanding technology, and a new breed of IRA providers that specialize in alternative assets like raw land are making it easier than ever for real estate investors to make a virtually seamless transition into this arena. 
About the Author: Bill Humphrey is co-founder and CEO of New Direction IRA, a provider of self-directed retirement plans. With over 20 years of experience as a certified public accountant, Mr. Humphrey has broadened his expertise to include real estate and other alternative retirement holdings. Since 2003, New Direction IRA has provided administrative services for thousands of alternative investments in IRAs, 401(k)s, and health savings accounts.