Top Reasons to Invest in Buying Rural Homes & Properties

This article originally appeared in the 2017 Winter Terra Firma Magazine, the official publication of the REALTORS® Land Institute.

As fall and winter are around us, I can think of nothing better than to drive out in the open country side and appreciate the views, the rolling pastures and the calm. You may want to stop and smell the fresh air and the crispness as it surrounds you. No vehicles except for an occasional farm truck or tractor. This is the country. For me, this is the land that lies between Houston and Austin and San Antonio.

Our offices are constantly asked about moving to the country. Their reasoning is the return to their hometowns, different lifestyle, out of the hustle and bustle, maybe the love of the land. But it is also investment. This is all the land we have. There cannot be any more manufactured for growth, enjoyment, recreation.

Our location is rural from towns of less than 100 to those of 15,000 or more. But the air is cleaner, fresher, the small town lifestyle of festivals, fiestas, parades and other fun and unique gifts of small town living abounds.

Rural Land Real Estate

So what is rural living? Obviously the population is much less. Our houses are spaced more widely apart. Even in town lots are larger. Go outside city limits and tract size grows by leaps and bounds. There is room for grazing animals, large pieces of agricultural land and greenery. We live in nature, which has a very positive effect on our health. Pollution levels are lower due to fewer vehicles and less industry. Our technology is catching up, and many people in rural areas have short to no commutes and work shorter work weeks. You have privacy, it is peaceful, and there is tradition.

Groceries, pharmacies, and medical facilities are more accessible than ever. Hard working people, who still care about what they do, provide services equal to or better than those found in urban areas. People hold the door open and ladies or the elderly are first to pass through. Politeness and manners still matter more than in most urban areas and are always noticed. It is safer, but as the larger cities grow out towards our country towns, the reality is you still need to take heed of what is around you. However, being in the country, you will also find many people carry handguns and you will still see pickups with a gun rack–a natural deterrent in the country.

The problem arises when the property is more expensive than expected, when a buyer thinks they are aware of the costs of building, upkeep and hard work it is to own a country property. This is no different from any other area of the country. Most of all, they think fifty acres is their goal but have no idea what it means. They get out on property and they are shocked to see how big it is, quickly twenty acres or ten acres is much more in their plan. Naturally, there are still large parcels available for the farmer or rancher want-to-bes. That is part of what we do in the farm and ranch business. It is essential that we as land specialists help the buyer with what purchasing a farm or ranch really means.

Property for $5,000 to $100,000 per acre and all in-between are possible to locate. But where do you want to be? Are you going to live permanently on the property or is it a weekend, future retirement property. Our property in this triangle is not inexpensive. That being said, I just sold a half-acre lot in a very desirable in town subdivision for $200,000!

A question remains: How are we going to be proactive in rural areas and not hang on to the success of the past? How do we encourage young people to want to be involved in rural farming if you don’t have a proactive message? You are competing against the world and opportunities everywhere in more urban areas. Young people need opportunity to continue to run the family farm or ranch or to stay in their hometowns and not feel they cannot make a living in small town America.

Rural America encompasses nearly seventy-five percent of the land area of the United States. It only accounts for fifteen percent of the country’s population. The census bureau classifies rural areas as open country and settlements with fewer than 2,500 residents.

Industry and college educations have pulled our young citizens into urban areas where they marry and grow their families. Most of them do not return to their rural roots. However, as we see in our area of Texas, more young families are coming back, not in droves but in steady thoughtful ways. Family roots, family farms and ranches and a slower pace. We still need to find a way to make rural America enticing enough for those in their twenties and thirties and forties to stay, work and raise their family.

How do we do that? This area for certain is seeing growth due to our most desirable location in that magical triangle spoken of before. An hour to Houston, 1.5 hours to Austin and 2.5 hours to San Antonio makes this a great place to be. Our economy has turned to tourism as a major factor to entice the public here. Fifty years ago it was agriculture mostly driving the economics. New companies are eyeing our area due to the location, as our Economic Development and Chamber of Commerce work diligently to increase work places and jobs.

Second home ownership is driven by amenities and age. Let’s get the children back to our family roots and be closer to grandparents. Let’s buy a weekend place so we can breathe, relax and socialize in a different way. If our area is 60 percent second homes, that is a huge population to get engaged when owners only come to the country maybe twice a month, if that.

farm house

Another point of rural living is scientific. It is confirmed what every urbanite has long suspected, life in the city is more stressful. Those people who are born and raised in urban areas are more likely to suffer from anxiety, depression and schizophrenia than those brought up in the countryside. Studies show, that exposure to green space reduces stress, boosts health and makes us less vulnerable to depression. This information comes from a study of the brains of volunteers from urban and rural areas.

Pollution, toxins, or noise could all contribute, however, other studies show access to green space soothes frayed nerves and improves wellbeing. Further studies show, that those with access to the county side are less likely to have heart disease or strokes.

Is this what contributes to the rise in retired people moving to our area? I say so, but also our area is culturally diverse. Orchestra performances, plays with professional actors, restoration of old buildings, shops with high end goods, restaurants and other venues for concerts and music of all types as well as restaurants with more refined menus are popping up all over. The rural arts are benefiting all age groups as spectator or participants. Renovations to existing buildings, are giving them the ability to support more activities for young people drive the younger residents to stay and enjoy events and to invite their friends from the big cities. If we can culturally capture their interest, it is much better as they experience the benefits for all citizens. Years ago I would hear people say there was nothing to do here…. Not anymore!

Also, a small community lets you participate in helping others for fundraising to save a theater, museum, parks, libraries and hospitals. A great fear for country towns is not only the loss of the countryside itself but also the way of life and the community involvement. General concern and care of neighbors and generations of tradition is the focus. We take care of each other and work together to bring a new soccer field, sports complex and other fights for the community.

One thing about living in the country is that when the power goes out after a major storm, it could be days or weeks before power is restored. If a piece of equipment breaks down, it may take weeks to repair and this can mean trouble when it is essential to the running of your farm, ranch or small property. There are no push mowers on properties with twenty acres or more! You become self-sufficient because you have to be. You do a lot more hands-on repairs that you never dreamt of needing to do. It’s an exercise in patience, willingness to learn, taking turns and helping neighbors. In that way, you earn a pat on the back, a handshake, a beer on the porch and know that the person you just helped get a job done is a person you can rely on to assist you, too. Neighbors are key in the country. It is a pace of life you learn to live with.

That is not to say that being part of the country community can take some getting used to. From uninvited visitors, human and wildlife, to the internet not working, cell phones dropping calls in low areas, septic tanks instead of sewers, no streetlights or pavement, it is a far cry from many newcomers previous urban lifestyles.

I hope people will come to visit and stay a little longer than for an ice cream cone or a beer. I hope people come to experience our way of life, the more they can enjoy, appreciate and support it. Our future lies in being able to deliver sustainable communities with thriving local economies made for and by the people who live there.

Cathy Cole, ALCAbout the author: Cathy Cole, ALC, Owner/CEO of Heritage Texas Country Properties, the largest real estate company in south central Texas. She served as the Chair of the REALTORS® Land Institute’s 2016 Government Affairs Committee and as President of the Texas Chapter of RLI. Cathy serves on the Nominating Committee for Texas Association of REALTORS® and is currently a member of their Land Use Sub-Committee. She is also a founding member of the Texas Land Brokers Network.

The Risk of Buying Land Without Using a Land Real Estate Professional

Why do we buy land?  We buy land for:

  • Use as an owner/operator
  • Recreation
  • Investment
  • 1031 exchange
  • Development
  • A legacy
  • Retirement…..

How many types of land are there?

  • Agricultural – farms and ranches
  • Confinement operations: hog, dairy, poultry
  • Agribusiness uses: elevators, seed processing plants, etc.
  • Timber
  • Orchards/vineyards (permanent plantings)
  • Hunting/recreational
  • Development
  • Land-in transition
  • Commercial
  • Residential
  • …the list is lengthy!

Land real estateHow, then, do you make an educated decision in the acquisition or disposition of land?  How do reach your land goals and objectives?  Do you know where to start and the questions to ask?

When you work with a qualified land real estate professional, such as an Accredited Land Consultant (ALC), the land professional can assist you in reaching your goals and objectives through:

  • Asking the right questions to determine what those goals & objectives are
  • Once identified, to provide thoughtful analysis and innovative solutions to help you reach those goals
  • Presenting you with appropriate information on current economic conditions at the local, regional, national and global levels; interest rate trends; commodity prices and effect on land values/rents/sale prices; as well as updates on legislative issues that affect your land
  • Discussions to determine if you should/could do a 1031 exchange, DST, or other tax deferment with the sale proceeds based on your goals/objectives, how large a tax consequence there will be…
  • Determining the highest and best use of your land
  • Handling mineral or water rights issues using the proper legal avenues and guidelines
  • Marketing your property appropriately including through the REALTORS® Land Institute’s Land Connections listing site, Lands-of-America affiliation, as well as marketing at the state and national meeting marketing sessions.
  • … again, the list is lengthy due to the depth and breadth of issues for any tract of land.

Minimize the risk with your largest investment by working with an Accredited Land Consultant (ALC) who can provide the connections, education, experience, and expertise to guide you through the changing, complex world of today’s land market. Before you consider buying or selling a tract of land real estate, make sure to Find a Land Consultant to ensure you get the best representation possible.

Terri Jensen, ALC land real estateAbout the author: Terri Jensen, ALC, was the 2015 National RLI President. She is currently the VP Real Estate/Appraisal Operations at Upper Midwest Management Corporation. She is a licensed REALTOR®/Broker in Minnesota and Nebraska as well as a licensed appraiser and auctioneer in Minnesota.

The Value in Using a Land Real Estate Expert

“Under all is the land. Upon its wise utilization and widely allocated ownership depend the survival and growth of free institutions and of our civilization. REALTORS ® should recognize that the interests of the nation and its citizens require the highest and best use of the land and the widest distribution of land ownership.”Preamble to the NAR Code of Ethics

Accurate, reliable and timely information is vital to effective decision making in almost every aspect of human endeavor, whether it be for personal or business gain. It is absolutely essential for making the most informed decision. As one of our responsibilities as licensed real estate professionals we are to “protect the public.” In the absence of accurate information, people will make bad decisions. Being a member of the REALTORS® Land Institute provides the public with the information that you and I are considered as “the land real estate experts.”

Being the Expert
In today’s world of more highly educated adults and, more specifically, the millennial sector, the qualification of being more than fifty miles from home with a brief case doesn’t qualify a person as an expert. As part of today’s college educated society, the process for making a business decision in a specialty area outside that of your educated profession is to hire an “expert.”

When a client hires an expert, the most important quality they look for is someone who presents themselves as a professional. A potential client will evaluate a REALTOR® on how articulate they are, their personal appearance, and the degree of comfort they demonstrate with the specific area of expertise.

Most likely you’re already fluent in several specific areas of real estate. You may know a little bit about several different types of real estate, but stressing overall knowledge doesn’t let you stand out from your competitors.

Alternatively, consider your unique interests, experience and passion for a specific area of agricultural real estate. Look at your business and calculate where the source of the majority of your transactions comes from.

In essence, what is it about real estate that attracts you and gets your juices going? Do a strong and precise evaluation of what you know best, what you wish to know more about, and what will get traction in your area. Then, focus on those issues that come out at or near the top of the list. In order to gain the edge, you will need to acquire all of the detailed information that is available in that area. Sources can be online, seminars, and/or professional meetings with networking opportunities. Accurate information is crucial to nearly every professional and academic discipline because facts are the only way humans can ascertain truth. With that said, the purpose of this article is to emphasize the importance of providing accurate information to our clients and some processes to attain that information.

Communication of information is key
Based on nearly forty years of experience in farm land sales, management and consulting, I have prepared what I consider to be a comprehensive checklist of detailed information that is the basis for listing a property for sale or when representing a buyer, it’s used to acquire the right information. One of the most frustrating issues for me is when I am evaluating a property for a potential buyer and the listing agent provides only a general summary of the information and, in some cases, inaccurate information.

I would like to illustrate a perfect example of why using a land real estate broker with specialized expertise in these types of transactions—preferably an Accredited Land Consultant—is necessary. A while back, I received information on a farm, provided to me by a farm broker, that was not his listing. That fact was disclosed, which is the correct process. The property included a nice residence and several outbuildings. The large barn had been refurbished into a family party facility and the farm did contain some tree and berry crops. The information packet from the listing broker contained significant information about the improvements but very limited information concerning the crops, soil types, crop varieties, historic crop yields, and lease history.

I use this as an example to illustrate two things: First, in my opinion this is not providing the seller of the property appropriate fiduciary service on selling their farm. Second, as a farm buyer’s agent, I will either pass up the farm right away or have to spend significant time acquiring the appropriate detailed information required to make an informed decision for my client.

The “rest of the story,” as Paul Harvey always said, is that the broker whom presented this property to me did end up doing the work researching the appropriate detailed information. However, he had a very difficult time of acquiring all the usual crop history, even though he attempted, because it was a bit difficult working with the listing agent. Again, the farm broker worked very hard and did the best he could.

Again, I use this example for a few reasons: First, you would not be providing your client (the seller) “expert” service, because as a result of not providing adequate detailed information, many potential buyers will simply pass on the deal. Second, as a member of the elite RLI you would not be appropriately representing our society. Third, you will be losing deals. With the technology available today, your goal should be to provide 95 percent of the information which a potential buyer will need to make an informed investment decision. I use 95 percent because no two investment experts think alike so there will always be some unique information that every potential buyer will request.

Where do you get the information?
First, start with a very detailed interview with the seller, the current tenant, and the respective Farm Security Administration (FSA) office. Be certain to get a letter signed by the seller giving you permission to access their information at the FSA office.

Second, verify the information provided. Even though the information is provided by the seller, I have found that sometimes their memory may not quite be totally accurate.

Third, you can use websites available for aerial, soils, topo, land-use, water permit registrations, drainage, and FSA information. I have a list of websites that may be of interest and am happy to share if you drop me an email.

Fourth, contact your fellow ALC colleagues for information about areas which you may NOT be real knowledgeable. The MOST valuable resource of information for my business is the tremendous network of colleagues that I have created through all the years of being a member for professional agricultural organizations like RLI. That is why I feel so honored to have earned the ALC designation this year and to become a member the most “elite land experts” in the nation. I have known many of the ALCs for years and am certain that when I call on one of them for assistance, there response will always be “what can I do to help you out?”; which would always be my response as well. However, if I have the opportunity to list a property which is outside my area of expertise, I contact one of my ALC colleagues whom I know is an expert in that particular type of real estate and refer the listing to them. For me, that is providing me the “expert” quality service to my client.

The network of professionals you create by attending the annual meeting, your local chapter events, and attending education classes will continually expand that network knowledge base for you to draw from. Having been in the business for many years I have been blessed with having done sales, management or consulting work on more than forty different crops in the thirty-nine of the fifty states. There are many other members with similar experiences and we all are your best resources to draw from for information.

Accurate, reliable and timely information is the key to “protecting the public,” which is a responsibility of our real estate license, providing our clients the top level “expert” fiduciary service, and will bode well for building a very successful business. The best information resource you have available is your fellow RLI ALC members. As a reminder, always make certain to use a disclaimer statement on all of your brochures.

One last testimony: I contribute a very large percentage of my success in the farm land brokerage, management, & consulting business to the networking relationships that I created through the REALTORS® Land Institute. Whenever I have called a colleague for help the answer has ALWAYS been, providing they knew the answer, “How can I help you?” In the cases where the person did not know the answer, they always knew someone to contact. I am willing to share my listing due diligence information checklist if you happen to be interested or if I can help you with any type of project, please contact me.

This article originally appeared in the 2017 Winter Terra Firma Magazine, the official publication of the REALTORS® Land Institute.

About the author: Fred Hepler, ALC, has been involved in the land business for over forty-two years and is a licensed broker in multiple states for over twenty-five years. He has experience in selling, managing, and/or consulting in thirty-nine states. He is a past president of ASFRMA where he held numerous positions on committees at the state and national levels and is now looking forward to becoming more actively involved in RLI.

A Guide to Real Estate Mapping and Analysis Tools

This article originally appeared in the 2017 Winter Terra Firma Magazine, the official publication of the REALTORS® Land Institute.

Smart land agents will embrace technology advances and use them not just to survive but to thrive. Others may cling to their brochures and rolodexes, hoping that they can continue to be successful because things were better in the old days and that’s how things have always been done. Unfortunately, history and my experience have shown that nostalgia and longing are rarely good business strategies, especially when it comes to real estate mapping.

Real estate technology innovation is booming. The first wave focused on residential real estate with companies producing solutions like Realtor.com, Zillow, RedFin and StreetEasy. The residential market was ripe for disruption because the Internet was a natural place to expand listing services, engage people through interactive digital marketing and differentiate the realtor’s business with better information, not just lawn signs.

Innovation in residential real estate led industry leaders in other markets to more broadly adopt technology. However, the uptake has been slower despite promises to make their businesses and the lives of their customers better. For many decades, there’s been no reason to change workflows or processes because immense wealth has been created without disrupting the status quo. However, in the past three years we’ve seen a sea change in technology.

It’s now far easier to use and delivers bigger benefits more quickly. Buyers expect an interactive, digital experience and marketing automation. How do you make sense of all the hype, especially if you are a small business owner who is not tech savvy? Above all, where do you start?

Drones: No Longer Just for Dramatic Video Shoots

The excitement around drones has increased immensely in the past year and with good reason. New Federal Aviation Administration rules have reduced uncertainty on who can fly and where and, more importantly, the technology is at a point where anyone can now use them for a small investment.

Drones used to be used exclusively in marketing real estate. A drone mounted camera can produce cost-effective shots of a property. For large, high-end homes or big expanses of land, dramatic videos let you immerse yourself and experience tree top flights. Today, that immersion comes in the form of virtual reality-like 3D interactive experiences that let you fly around and view the scene from any perspective. In the University of Oxford example, shown below, the drone flew multiple paths over the city. The raw video imagery is used to create a full 3D model of the buildings, including exquisite detail for the build frontages, rooflines, gargoyles and chimneypots. You can literally fly down the streets and lanes, and land in any courtyard to explore the buildings.

The same data feeds used to map Oxford can be used in land management to create terrain surfaces which show perspective and hillshading. This can be used to detect slopes, hollows, banks and hidden landscape features which are not obvious in aerial or satellite imagery. Low level drone flights also create very high resolution data which can show changes in vegetation and land development with high degrees of precision such as in this montage below where we not only can see where a new road has been laid but also changes to the height of vegetation and small hollows where water is ponding or eroding the land.

Immersive scenes are immensely valuable for supplementing existing online marketing. What’s more the video data can also provide new perspectives, often quite literally. I recently worked with a land broker who was selling a large tract of land along California’s Mendocino Coast.  She had a drone fly over the pasture and old growth forest, up fern filled gullies and fishing ponds. Only after did she realize that the views of the homestead from the private vineyard were missing. They had flown the house and grounds but had not flown towards the house over the vineyard. The great thing was that even though the drones had flown different routes, we could still recreate a full 3D model of the house and grounds. Rather than have a static video, our client created a virtual fly through along the rows of grapes glistening in late summer evening sun, and then up and over the house to show the full grandeur of the setting. Better still, her clients can take the same virtual tour or browse a set of interactive snapshots she has created. She didn’t need to organize another drone flight. Everything she needed to properly promote her ranch was in the data files the drone had collected, we just needed to process it.

Data in the Cloud – Everywhere for Everyone

We’ve all experienced Google Maps and Google Earth. They have changed how we find and view maps and land data. The revolution Google drove is for online data. Today, there are millions of map layers from every corner of the globe forming a Living Atlas of the World. Local, regional and national Governments, private companies and even crowdsourcing volunteers are publishing authoritative and personally collected data into open libraries which anyone can use.

In the United States we have Federal Government data on everything from cropland to wilderness areas, maps of geology, soils, landscape, forest, flood zones, wetlands and hundreds more. Every one of these is freely available to use for analysis and overlay. In many rural areas, the data is better and more useful than cities.

One of the most valuable data sets is satellite imagery. Every frame of Landsat data, which has been imaging our planet since 1972, is available online. This is a valuable source of land surface change information and provides insights into seasonal changes in vegetation, soil moisture, crop growth and much more.

Many satellites have collected data which has been used to collect a high-resolution terrain model of the world. Since this data is also open to everyone, land owners and consultants can use it to understand more about the property throughout the buying process. One common use is gaining an understanding of soil drainage, as it has an important impact on crop production together with water and fertilizer use. Terrain profiling tools, like those shown above, can provide detailed analysis on changes in topography, drainage direction and soil moisture variations. In the example, we can see how the land slopes across the mile-long profile. Even small features of a few feet can be understood by tracking the profile against the aerial imagery. It is possible to identify old stream beds and even the site of a small quarry and ditch.

Sketching, Markup and Marketing

Many land specialists just want simple tools to access land parcels and property data. Open map and data standards mean that many communities are sharing their parcel data as online map services or files. Desktop and online software allow you to upload and fuse these files, trace parcels lines and find out ownership details like those shown in this suburban example below. Map services are simple, syndicated data feeds which create layers for each one you open in free real estate mapping applications like Google Earth or ArcGIS Earth. These “services” are more than pictures. You can query them, see attributes and, in many cases, use them to draw property boundaries by sketching straight onto the map.

Map services also now support social media and online storage sites like Facebook, Photobucket and Flickr. Photos which have been captured with your GPS on your smart phone or tablet contain location data that these sites use, so that these photos can automatically be positioned with your map. Tools to change the color, transparency, outline and shape of any symbols allow you to create high quality digital and print materials with no additional software, as shown below.

You can drag and drop spreadsheets with property addresses or GPS coordinates onto a web browser automatically turn them into online maps. A few clicks, and no coding later, the same spreadsheet can become an interactive property promotion or marketing resource. Rather than creating and mailing out paper books, land specialist can now email links to their properties, so clients and prospects can browse them at their leisure. Since the real estate mapping services which underlie these apps are dynamic, they automatically change when new entries are added to the spreadsheet. Better yet, web analytics tools embedded on your website can tell you how many people are browsing your properties and which ones are the most popular. Having real time listings, web analytics and links to your CRM means you can better market your properties and keep your clients coming back for more.

The Real Estate Digital Revolution

The full impact of the digital revolution in real estate is yet to be seen. The huge improvements in the simplicity of building web apps, promoting properties through interactive marketing tools and using different map layers, are producing a strong movement towards empowering the consumer and land specialist alike. Today, buyers expect to be able to access online information and experience the property without having to visit in person. They are more discerning buyers with many choices for who they do business with.

Real estate mapping, analytics and marketing in the real estate industry are moving on, and fast. Shouldn’t you be making the most of it?

About the Author: Helen Thompson is responsible for global marketing strategies in the commercial business development team at Esri. Her twenty years of experience in applied spatial analysis has helped advance the understanding and use of spatial technology in business and society. She is a graduate of spatial science and computing at the University of Wales Institute of Science and Technology and geography at Plymouth University.

 

drone with camera for real estate commercial use

Drones for Commercial Use: Taking Real Estate Businesses to New Heights

As I was browsing the internet today, I came upon a humorous article entitled Santa Delivered the Drone. But not the safety and skill to fly it. The article contained a number of “drone laments”, speaking of the excitement of getting a new drone for Christmas followed by the agony of crashing it on the first day or even the first flight. One Tweet read: “A holiday story: Give nephew drone. Nephew flies drone for like five seconds. Drone falls, breaks. Christmas ruined. Drones are stupid. The end.” This one gave me a good laugh.

It’s true that drones have become a very hot item in recent years. And as the technology has become more widespread and less expensive, drone sales have gone through the roof. The majority of the drones sold cost less than $200 and are best classified as toys. And most people who fly them lack a good understanding of flight principles, wind, and spatial awareness. Thus, the yuletide drone woes come as no surprise.

“The use of drones across all sectors has exploded in the past three years. The FAA estimates that over 600,000 drones will be flying commercially in the US in 2017.”

In real estate and many other businesses, drones are definitely not toys. They are valuable and, I might add, critical tools for marketing and selling property. I have personally been using drones for over two years – thanks to my FAA Section 333 exemption. I can personally attest to their value in my business, BUT here’s the latest: my exemption doesn’t exist anymore. In fact, ZERO Section 333 exemptions exist. That’s because in August of 2016, the FAA enacted a new rule enabling people to become licensed specifically as drone operators. Previously, the only way to legally fly a drone for commercial purposes was to hold a pilots license and go through a lengthy approval process to get an exemption. Now, after taking online education and passing a written exam, individuals become licensed as drone operators and can fly completely legally, subject to certain regulations.

drone for commercial real estate use with camera

Due to this new rule, I have been encouraging every land broker I know to become licensed and start flying. You can buy a drone for less than $1,000 that has all the capabilities needed, and you don’t have to be a Navy fighter pilot to safely and efficiently fly your drone for maximum effectiveness. A little practice goes a long way and the more you fly, the more comfortable you will become. I often tell people that I could teach a ten year old to fly my drone in under thirty minutes – and I mean it. With the right equipment, the drone basically flies itself. This small investment of money and time has the potential to have huge impacts on your business.

An overhead view provided by a drone shows how a property fits together, how it is accessed, and the surrounding land and uses. On a large property, you can showcase more about a property in a sixty-second video than an entire morning of driving. Additionally, in the same way that digital photography and online mapping are considered standard today, drone video and photography are becoming just as commonplace. As land professionals, it is important to keep in step with emerging trends to bring the best service and value to our clients.

At the 2017 National Land Conference, I will be leading a breakout session on the use of drones in land real estate. We will briefly discuss how to become licensed as a drone operator but will focus primarily on how to best use this tool to increase value for your clients and increase business for yourself. If you have no experience or interest in drones, I invite you to attend and see if I can change your mind. If you have been flying drones for years as I have, I invite you to come and share your stories, as well as what works for you and what doesn’t. The format will be very interactive and I think everyone will come away having learned something new – including myself!

I hope to see you at the 2017 National Land Conference in Charlotte, NC, from March 31-April 2. In the meantime, if you have any questions about drones that I can answer, please give me a call or drop me an email.

mcdow, calebAbout the author: Caleb McDow is a land specialist for Crosby and Associates in Winter Haven, FL, with a Master of Science in Real Estate (MSRE) and is a FAA Certified Drone Pilot. McDow joined the institute in 2014 as a Military Transition Program (MTP) member.  He serves on the Institute’s Future Leaders Committee and regularly blogs on real estate issues. Caleb McDow can be reached at 352-665-6648 or caleb@crosbydirt.com

AgriWhat? How the Emerging Trend of Agritourism Can Help Your Business

What do the following have in common?

  • Pumpkin patch
  • Crop maze
  • Farm store
  • Petting zoo
  • Wedding barn
  • Dairy with ice cream and cheese
  • Pastured pork farm
  • U-pick apple orchard

They are all types of agritourism activities and locations.

No matter what you call it – agritourism, agri-tourism, agrotourism, agritainment – it is cool! More than half of all U.S. states have some type of agritourism language written into their respective state laws. So what does this mean for you and your client? Knowing about the agritourism trends and practices around the country can not only assist you in finding the appropriate land for your clients, but can help your clients find future business opportunities. This follows the “growth begets growth” theory.

What is the difference between agritourism and ecotourism? It depends on the location and governing entity. Confused yet? No need to be. The bottom line is that knowing what is applicable within your sales region will help you help your clients, which in turn helps your bottom line.

Agritourism Operations

To be successful, agritourism operators must follow best management practices on their farms, but also must be welcoming to consumers and offer activities that pique their interest. Seasonality comes into play for all operations, with some farms offering multiple attractions year-round, and some farms offering only one or two options in a short amount of time.

An example of the former could be a dairy farm that produces value-added products for sale on the property year-round. Farm visitors can view cows and calves, see a milking parlor, walk through the processing plant, and end up in a store where they can sample and purchase farm-fresh ice cream, cheese, and other products.

An example of the latter could be a Christmas tree farm. The size of the land to grow trees is of foremost importance since the farm may only be open to the public six to eight weeks a year. However, the farmer may decide to be open for events during other seasons (e.g. pumpkin patches and corn maze “haunts” in the fall, u-pick hydroponic fruit and vegetables in the spring, or pick your own flowers in the summer).

In both of these examples, the land size matters. Having a workable space for the farmer is critical to the operation. However, having a safe place for agritourists is also critical. REALTORS can help farmers determine how much land is needed to conduct both public and private business, and can assist in finding the most usable, arable, visitor-friendly space possible.

In the Christmas tree farm example, space is needed to grow the trees, to prepare the trees for purchase (cut, shake, wrap, load), for customer parking, for tree and other product sales. For this type of operation, when parking is needed, usually LOTS of land is needed to accommodate the customers. If the farmer decides to provide other agritourism activities throughout the year, the acreage needed for those activities must also be considered. These are all things to consider when looking at property before purchase.

Ecotourism Operations

Again, depending on the governing entity, what one state considers agritourism may be considered ecotourism by another. This may or may not matter to your client depending on what they want to offer, but the distinction is important in terms of liability protections for one category over another.

Ecotourism can be any outdoor activity that doesn’t need to be consistent with a farm. It CAN be, but doesn’t need to be. These include kayaking, ATV tours, skeet shooting, zip lining, hiking, and many others. Your clients may want to provide these opportunities for their existing or potential customers, and the land specifications are as important for them as if they were considering offering agritourism. Where you can add value for your clients is by knowing the difference, especially in terms of statutory and legal definitions.

The Future

The possibilities for agritourism opportunities are numerous and exciting for REALTORS®, clients, and consumers. Getting people to experience the outdoors and hearken back on America’s agrarian history is a way to tie us back to the land. By navigating the nuances of agritourism policy and how that can shape a client’s business future, a REALTOR has the ability to help clients achieve their dreams. How many people can state that?

I encourage you to take a look at what agritourism operations exist in your nearby communities. If you get a chance, stop by to see the possibilities for how your clients can take advantage of this emerging trend. And don’t even get me started on the exciting trend of agrihoods …

About the Author: Melissa Hunt is the Chairman of the National Agritourism Professionals Association. Learn more from Hunt on this topic at the 2017 National Land Conference in her presentation on Is Agritourism a Viable Option (For You or Your Client)?

vineyard

The Art of Selling a Vineyard

This is part 2 of 2 of an article that originally appeared in the REALTORS® Land Institute’s Summer 2017 Terra Firma magazine.

Although it is somewhat romantic to purchase a vineyard, it can be stressful, emotional or drudgery to sell one that you have put your life and soul into and worked at for years.  A buyer may not have the same passion as the seller.

Vineyards sell for a variety of reasons.  Perhaps the owner has improved it to the point of capacity and wants a new challenge.  Perhaps there is a death in the family and the succeeding generation does not have the desire or passion to continue. Possibly a vineyard has produced some exceptional grapes for wine or juice and a major player wants the label and juice bad enough to pay an exorbitant price for the vineyard.   Perhaps there is financial difficulty that dictates moving on.

Juice grapes hold very little, if any, additional value for the variety.  That land is considered similar to row crop land except that the vines need to be scraped off to make way for a higher and better use.  Unlike merely a few years ago, when grape cooperatives had shares and the shares in the co-op held some value, the co-op shares are nearly worthless in today’s market.  The returns are lower than most any other crop, especially in the western states, and growers are actually losing money in places.  There is approximately a $1,000 to $1,500 cost to pull the vines and remove the infrastructure from a site.  Sellers may take a hit in price for this reason unless the buyer has a higher use for the land.

Table grapes, on the other hand, tend to retain their longevity as a crop.  Disease and urban encroachment are the largest factors confronting sellers of this type of land.

vineyard

Wine vineyards have exponentially more hurdles in the selling process.  Much of it is emotional; however, location within a specific American Viticulture Appellation (AVA) lends higher or lower value to a vineyard.  One in demand can, and usually does, sell at a substantially higher value than the same plantings across the road if they do not sit within the desired AVA.  Red Mountain AVA in southeastern Washington, is one of the smallest AVA’s known. The prices for vineyards and vineyard potential land can command one and a half to two times the price as a similar land parcel merely across the road–simply because of where someone drew the line for the AVA!

When selling, there are specific disclosures required.  The disclosure most often overlooked is the five-year crop pesticide and chemical use records.  There are also production records, income and expense records, labor hour records and sales contracts to disclose.  Much of this type of information is disclosed only with ‘confidentiality agreements’ signed by potential buyers.  Plus, there are state mandated disclosures that vary from state to state.  In addition, some sellers may demand potential buyers to be registered and pre-qualified with a lender’s letter in hand before they will show or release any information about the property.  If there are homes, buildings, or commercial parts to the sale, then, separate disclosures may be required for each endeavor.

One of the most important aspects of selling a vineyard (or any property for that matter) is keeping it clean, weed-free and presentable to the buying public.  First impressions make a HUGE difference when buying a piece of property.  Remember, sellers… Buyers often rely as much on emotional connection to a property as they do on business sense.  A clean and showy place makes all the difference–especially if there is more than one property that a particular prospect is considering.

Vineyard sellers would also be wise to have in their possession (or at least make available or have access to) the weather data, seasonal harvest dates, freeze data and so forth in order for a buyer to make an informed decision about the property.  The varieties, number of acres planted, age of vines, type of root stock (if they are grafted cuttings), row spacing, plants per acre, type of trellis, type of irrigation system, etc. are all pertinent to the sale.  In addition, a recent soil analysis and pH analysis are very helpful to potential buyers and their brokers.  The most important part of disclosures is to BE HONEST!  If there has been a disease or problem in the vineyard, disclose it even if it has been corrected.  Detail any environmental concerns such as being downwind from a processing facility, excessive dust from a gravel crusher, dairy nearby (fly spots on berries), etc.  The more honest, complete and accurate the disclosure is, the less liability the seller shoulders in any transaction.

Also, sellers should think through the end of the transaction.  What are they going to do with the money?  Bank it and pay capital gains, convert the sale into an IRS 1031 Tax Deferred Like-Kind Exchange, split a partnership or family holdings?  Bring in a qualified Certified Public Accountant early in the process so there are no last minute surprises–and be prepared for a long ride.  Vineyard listings, especially wine vineyards, either sell very quickly or may take several years.  If the numbers fit the return profile, they may sell quickly.  If not, it may take a while.  Investors don’t usually jump into the buying process on smaller acreages unless they have other similar property in the area or the holding and profit margin are substantial.  As with most family-owned vineyards, that is not the case.  You may need to take an additional harvest or two before you find the right buyer.  Hang on for the ride!

Flo Sayre, ALCAbout the author: Florence “Flo” Sayre, ALC, has been active in the land business for over forty years and licensed in the real estate industry for over twenty. A member of RLI since 2008, she is the current RLI Pacific Northwest Chapter President and the Chair of the ALC Designation Committee and serves on the RLI Board of Directors.

vineyard

The Art of Buying Vineyards

This is part 1 of 2 from an article that originally appeared in the REALTORS® Land Institute’s Summer 2016 Terra Firma magazine.

So you think you want to own a vineyard, do you?!?  There is much romanticism in buying and/or owning a vineyard.  However, let’s take a look at the facts and attempt to put some sense into the process.

Vineyard land or vineyard potential land is not all the same.  First, one must get some questions answered.  What type of grapes is the buyer interested in growing: table grapes, juice grapes or wine grapes?  If it is wine grapes, of which variety?  Does it have irrigation water, and is there enough water for a sustainable crop?  Which way does the air drain?  By that, I mean, is there a slope or is it flat land?  If the land is flat, then one needs to do substantially more research before committing.  Land with a slope (even in any direction) allows for natural air drainage – either up or down the hillside.  If there are undulations in the land (hills and valleys) there could be cold pockets subjecting spring bloom to potential frost.  In the industry, these are referred to as “frost pockets”.

Juice grapes are hardier than wine grapes or table grapes.  Their growing season is short enough to allow them to be grown in nearly every northern state in the US.  Table grapes have both a longer growing season and a tender blossom.  They are grown a bit mid-line across the US to the more southern areas – usually in the foothills to valley floors in the eastern and western coastal inland areas of the US like California or the Carolinas and Georgia.  Both of these varieties strive for high production and quantity, needing substantial water for finishing.

grapesWine grapes, on the other hand, are much more temperamental.  They need some water, but not too much.  There is a very fine line between not enough and too much water for irrigation.  A smaller berry, starved slightly for water, produces a better quality wine in the end.  Slopes are nearly always preferred for wine grapes, regardless of variety.  Red varietals can take colder winters than the whites and are more susceptible to some diseases.

One should make note of the local weather patterns, spring and fall freeze dates and frost-free growing days.  Also, take note of the types of crops grown in the surrounding area.  Know the standards of practice for spray application to the neighboring lands.  Grapes are very much negatively affected by certain sprays, causing bloom drop and loss of production.  Bees are an important factor to consider as well.  Grapes do very well in areas where orchards and nut groves are prevalent for pollination.  The bees tend to linger longer where there is ample blossom time and fresh nectar.

Take a look at the soils.  Vines do not like to have wet feet, so, well drained soils are a major factor.  Have the soils tested for nutrients as a part of your ‘due diligence’ prior to closing the sale.  Know and understand the nutritional needs of your chosen varieties, and if the soils need amending to reach the plant requirements, find out what the cost will be to reach that goal.  You may determine that a nicer looking property may cost you more than your second choice if the cost to get the soils amended to optimum levels is cost prohibitive.  Find a crop consultant in the area who specializes in grape production to help you with your research.  You may also find a Land Grant University with agricultural specialties in the area that has a team or department with ties to the vineyard industry.  Always look for local, regional or state grower associations for advice and/or assistance.

Have a financial plan!  This is one of the most frequently miscalculated and misguided parts of the farming business in general.  Vineyards do not produce the first year, or the second year, and possibly not even the third year.  Know the cost of trellising, planting, pruning and training the vines before production.  Determine if hand picking or mechanical harvest will be done.  If you are not sure, plan for both.  Height, row spacing and end-row turnaround space are critical.

Plan out plantings in phases so that you can optimize the land and the expense calendar.  Order the vines from a reputable nursery.  ALWAYS ask for the patent and copyright certificate for the vines you purchase!  If the nursery says they don’t have one or that you don’t need one, go elsewhere.  Permanent plants are patented and copyrighted just like photographs, parts and paintings, and there are substantial fines and penalties associated with ‘patent infringement’ in America.  It is also against the law to make cuttings of patented plants for expanding your own growing area.  Just be aware!  Most of all…plan for disaster years; they will happen in agriculture, regardless of the crop.  One cannot control Mother Nature!

Next, know the varieties and the demand.  Remember, the ‘sipping public’ changes flavor trends often and suddenly.  Reds are always popular; however, popular taste may vary from light to heavy, oaky to clear, and whatever other flavors can arise in the process of fermentation, or whatever the marketing ploy is at the time.  Whites can vary widely from dry to sweet; there are cooking varieties, sipping varieties, and dessert and aperitif whites.  It is important to know the market, the demand, and watch the industry trends before getting financially buried in the vineyard business.

Get to know the other growers and vintners in the area.  They will be your biggest resource and greatest fans.  Wine growers, unlike hop growers, are extremely generous with sharing information about practices, operations and what’s new.  Plus, they’ll give you advice–solicited or not!

You have done your research, completed your due diligence, developed a master plan, and found a circle of friends, consultants and advisers…now, you must have a passion in order for your plans to meld into your life and future.  If you don’t have passion, one can give up or give in and the project can easily fizzle at the first bump in the road.

Flo Sayre, ALCAbout the author: Florence “Flo” Sayre, ALC, has been active in the land business for over forty years and licensed in the real estate industry for over twenty. A member of RLI since 2008, she is the current RLI Pacific Northwest Chapter President and the Chair of the ALC Designation Committee and serves on the RLI Board of Directors.

Accredited Land Consultant Pin

Promoting Your ALC Real Estate Designation

No matter the industry, separating yourself from the competition is a critical component that can’t be overlooked. We RLI members know what an Accredited Land Consultant (ALC) is, but does the public? I don’t believe they do. Isn’t our duty to educate the public? We are the elite members of the REALTORS® Land Institute (RLI) and we need to inform the public about WHO we are, not just WHAT we do.

I would like to share some ideas/thoughts that fellow ALCs have shared with us which are working well for them.

Don’t market specific properties, market yourself! Tell the public who you are, how you got to be an ALC. Let them know about the rigorous requirements you had to meet to obtain the designation and how you can use your expertise to assist a client with their current real estate needs.

Educate everyone around you. Let your colleagues, clients, friends and family know what RLI is and how this amazing group of land professionals have helped you in your career. Let clients know that you have a huge network of experts to assist you in meeting their needs. Let them know having your ALC designation, sets you apart from the other millions of real estate agents. Get them to ask themselves, why use anyone else?

Establish connections. Develop a sold group of bankers, accountants, attorneys and financial advisors that you trust. Help the client with full process of their land sale or purchase. It’s more than just buying and/or selling; it’s helping them understand each step and how it will affect them financially.

Write land articles, blogs, post videos etc. These are great ways to position yourself in the industry as the expert you are and share your knowledge and expertise. It helps build a brand with the public that you are the go to person for all their real estate needs. Be the star you are!

These are just a few things that you can do to promote your ALC designation and set yourself apart as being the one they will come to when they think about selling or buying real estate.

I will leave you with this thought. Another MN ALC gathered some data and found out these staggering facts. There are 23,565 licensed real estate agents in the state of Minnesota and of those agents, there are only 13 are ALCs–in the whole state of Minnesota! I am proud to say that I am 1 of those 13 ALCs and I need to educate the public to again get them to ask the question………WHY USE ANYONE ELSE?

Quick fact: According to a recent Nielsen study, only 33% of buyers trust what a brand says about itself; however, 92% believe what their peers say about a brand! What does that mean to you? If you are an ALC you are the best recruiting tool to motivate and promote your peers to grow and join RLI. As the old saying goes, there is strength in numbers. The more RLI members, the more networking, awareness about the ALC, and organizational growth there will be–which benefits all ALCs!

wendy forthun, ALCWendy Forthun, ALC, is an experienced broker and 1 Stop Realty’s Vice President. Wendy joined RLI in 2006 and earned her Accredited Land Consultant designation from RLI in 2013. She has successfully marketed her esteemed designation to help grow her business.

THE REAL (E)STATE OF PRINT ADVERTISING IN THE DIGITAL AGE

This article originally appeared in the REALTORS® Land Institute’s Summer 2017 Terra Firma magazine.

More than one real-estate agent, borrowing from humorist Will Rogers, has advised, “Put your money in land, because they aren’t making any more of it”.

When it comes to where to advertise that land, the adage does not hold so true. Plenty of media vehicles are launching all the time—a vast, renewable resource of print, broadcast, outdoor, online, mobile and social-media outlets to explore. A marketer could be forgiven for wondering exactly where to invest the finite resources of an advertising budget.

The trick lies in putting the money where it matters most, where it will connect with people who’d be most interested in that new-model car, custom shirt maker or ranchland for sale. While data-rich digital platforms offer new ways to target individuals, traditional media, such as newspapers and magazines, remain a vital part of a successful marketing budget and continue to offer distinct advantages.

In the midst of the digital revolution, newspapers and magazines continue to deliver, and so does print advertising. A wealth of research shows that the printed-and-published-on-paper word still resonates today, extending to favorable demographics, longer interaction times, greater trust and other indicators that make a positive environment for advertisers. The combination of print and digital often make an ideal partnership, particularly in real estate marketing, where print advertising introduces a property and peaks interest, even among people who may not be actively looking, and digital draws prospects in further with virtual tours, slide shows and all the important specs.

newspaperIn 2015, consumer neuroscience researchers at Temple University released a study that explored how people responded to print and digital advertising. They concluded that each medium had its strengths, with digital grabbing sustained, focused attention and print ads engaging better emotionally.

The study, produced for the U.S. Postal Service Office of Inspector General, included test subjects looking at advertising in print and on digital screens, while receiving functional MRIs of their brains. While looking at paper ads, the MRIs revealed more activity in the areas of the brain associated with desire and motivation, indicating subjects had a more positive, subconscious response for the item being advertised—a great way to kick off the sales process.

Print and digital go hand in hand in other ways, too. A Wall Street Journal reader study found that subscribers read the print edition in the early morning (six in ten read the newspaper in print, according to the 2015 Ipsos Affluent Survey), later logging on to the paper’s website from a desktop or laptop during the workday and checking in throughout the day via their mobile devices.

Broader audiences display similar behavior. According to the Pew Research Center, citing a Nielsen Scarborough 2014 Newspaper Penetration Report, more than eight in ten people read the newspaper in print—fifty-six percent of people in print alone—with the remainder including online and mobile platforms through the day.

With morning tending to be the most popular time to pick up the newspaper, even in a world of twenty-four-hour news cycles, a print paper still provides an environment for advertisers to present their own big news. Reading the print edition is an engrossing interaction, a lean-in experience, with people engaging forty-five to fifty minutes a day with the print edition of The Wall Street Journal. In today’s content landscape, that is an incredible length of time to hold an individual’s attention.

Magazines have also retained vibrancy in the digital age. Samir Husni, the director of the Magazine Innovation Center at the University Of Mississippi School Of Journalism has tracked trends in the industry for thirty years. Husni was happy to discover that during the first quarter of 2016, one-hundred and ninety-nine new titles launched, seventy-seven in January alone, compared to one-hundred and ninety-one which had debuted during the same period in 2015. In a blog on his website, Husni said, “One thing that I’ve noticed this year in following magazine media and the marketplace, no one is saying that print is dead anymore. That mantra has vanished.”

So who is the print reader? Demographics trend favorably to being able to make bigger purchases, with affluent, well-educated people indicating they read newspapers.  A 2016 Ipsos study revealed newspaper readers have an average net worth that is thirty percent higher than total affluents–$1.64 million compared to $1.27 million. The same distinction holds true at The Wall Street Journal, where print-only readers report net worth of $1.8 million, twelve percent higher than total brand readership. Wall Street Journal print readers have net worths that are sixty percent higher than television viewers.

Environment counts in real estate and it counts in advertising, too. A Pew Research Center study found numerous publications, including The Wall Street Journal and The Economist, ranked high in consumer trust across differing political philosophies, outpacing newer digital news outlets like BuzzFeed and Yahoo News.

With readers, right demographics and environment in place, today’s advertisers use print to capture attention and craft the right image and digital to drill down the details.

In addition to capturing the attention of people who are looking for real estate and those who originally were not, print ads also elevate the brand identity of the brokerage and sales agent.

These objectives would be difficult to achieve in a digital-only campaign, as online, people tend to search for specific things or enter actual web domains—behavior is more directed. Print showcases the property, hooks the prospect and directs him or her further down the sales funnel with digital listings, virtual tours, property slideshows and agents’ websites.

In this era of information overload, another way print is evolving is through creative executions. A clean, simple style—not too wordy or crowded with different elements cluttering the layout—works best to draw the reader’s attention and spur action. According to researcher GfK MRI Starch, the qualities that work best in successful print ads are:

  • Simplicity: A minimalistic design with not a lot of clutter. Copy that is equally simple to read.
  • Boldness: Judicious use of vivid color to grab attention.
  • Clarity: Memorable, direct headlines and similar body copy.
  • Contrast: Visual play of light and dark tones to create sharp contrast.

According to a recent study of Wall Street Journal readers, more than eight in ten read the weekly Mansion section, appearing in the Friday edition. Further, a 2014 Wall Street Journal proprietary study conducted with Ipsos Media CT, revealed twenty-two percent of The Wall Street Journal’s print readers had contacted a real estate broker as a result of a Wall Street Journal real estate ad.

As for what real estate advertising stood out best in the section, according to Starch, top-scoring ads featured ample use of white space, putting the headline, copy and key images in crisp isolation. Of special note, contact information was easy to see and not buried at the end of a copy block, as real estate advertising, more than anything, is a call to action to visit the website and contact the broker.

Starch’s best real estate ads also featured compelling, professional photography. Layouts that featured one, dominant photograph, or a main shot with one or two minor images, scored well.

In a 2015 REAL Trends survey, done in partnership with industry image and virtual-tour maker Virtuance, found ninety-four percent of agents “felt passionate” about using professional photography, believing it attracted buyers to their websites and burnished their brand images.

Headlines, sometimes as simple as the property’s name or address, or maybe a few descriptive details, succeeded in their simplicity, directness and ability to grab readers’ eyes. Copy urged readers to take action, often directing them straight to the property’s website for details and video.

Successful print ads look a lot like strongly performing digital ads, which were even sparser and cleaner—one key image, a headline and a caption often sufficing. As for mobile ads, with minimal screen space comes more simple layouts and little copy.

Real estate marketers have more tools than ever to sell a piece of land, and print complements a broader campaign that might begin with a sign on a fence post and end with an online 3D showcase.

One does not replace the other, as history has shown. The popular media of Will Rogers’ era—newspapers, magazines, billboards and radio—are still with us, but today they work in harmony with digital, satellite, virtual reality and whatever is to come.

Gallardo, MartiAbout the author: Marti Gallardo is Global Head of Advertising for Real Estate and Vertical Markets for The Wall Street Journal.  She and her team work with real estate professionals on smart marketing solutions, helping them connect their luxury and investment properties with qualified prospects. RLI members can save big on print advertising opportunities with the Wall Street Journal as part of the Member Advantage Program (MAP).