Unlike homes in certain residential developments across the country, no two parcels of land are the same in my mind. Sure they may have similar views or produce a similar crop, but there are likely many different attributes that each property might have that are not visible from just a site visit online or from studying a map of the property. In order to completely grasp these attributes to their fullest extent, there are a number of important questions that must be asked prior to making an investment in land.
Is the land encumbered with a conservation easement? This should be one of the first questions asked when looking at land in my mind. While some landowners may be looking to permanently conserve the land while getting a healthy tax benefit, others may want to have the opportunity to develop it at some point down the road. I've seen lots of common sense conservation easements over the years that do not hinder the use of the land in a significant way, but I've also seen some bizarre conservation easements that can greatly affect the overall market value of a property. Consider the long-term effects of a conservation easement and if they're right for you and your heirs.
While most parcels of land do not have conservation easements, some might have rules, restrictions, or covenants that the owners must abide by. It’s imperative that this be investigated so that you know what can actually be done on the property.
Buyers of hunting properties, especially in the West, often look at proximity to public land. While many landowners consider it a luxury to border National Forest, a lot of recreational buyers consider it a negative if there is a public trailhead nearby. The last thing any outdoorsman wants is to purchase a gorgeous high-country elk hunting property bordering the National Forest, just to the have the public legally walking on the other side of the fence in blaze orange come hunting season.
In states where public land is more rare, it's quite common for a hunting buyer to look at smaller properties that are adjacent to large cattle ranches or large farms full of crops, as these will typically hold and attract a significant amount of wildlife. If the neighboring properties are all 80 - 160 acre parcels with homes, then there is a very good chance the hunting opportunities will be very limited compared to if the neighboring properties are a peanut field on one side and a cattle ranch on the other.
Avid fly fisherman will often look for two types of properties. Those with deep enough pockets strive for acquiring a long stretch of river, often at least half a mile, to hold enough holes where they can fish without feeling pressured from neighbors both upstream and downstream. Those looking for more affordable options will often look in ranch communities or platted subdivisions that offer fishing easements for its members or property owners. These fishing easements can range from 1 - 6 miles of premium fishing habitat with very little pressure, as most property owners in these types of communities are typically absentee owners who have a primary residence is another state.
When purchasing waterfront land it's important to obtain a floodplain map. These can often be found through FEMA, but I encourage you to have the land surveyed so that you have the most up to date accurate elevations. If you're ever planning on building, be sure to do your proper due diligence and investigate insurance options prior to your purchase. Flood insurance certainly isn't cheap and it must be considered prior to purchasing land in low-lying valleys or along waterways.
If farming is the primary purpose for a land purchase, knowing the soil type and the annual precipitation is going to be imperative. If water rights are applicable, details of the water rights and the method of delivery for those water rights will be imperative to understand. The length of the growing season and cuttings per year must be considered as well with farm ground.
Access is another key component when comparing different parcels of land on the market. While most properties around the United States have decent year round access, it is not unheard of for there to be no year-round access. I’ve seen properties that can’t be accessed in the winter unless it’s via snowmobile, and I’ve seen properties that can’t be accessed after a heavy rain due to all the clay. Vegetation and soil type can vary from region to region, and it’s important to know how those can affect the access during the different seasons of the year. Along with access must come the conversation of access easements. It’s certainly not ideal to cross a neighbor’s property to get to yours, so this also must be investigated if it does not appear that the property has direct access off of a road.
Location of utilities and infrastructure should be a given when it comes to looking at land, especially residential home sites, but I’ve seen several buyers purchase land over the years because of a fabulous view it offered and didn’t give any consideration to the costs of pulling utilities to the property. While solar has certainly gotten much more popular over the past few years, the majority of the public still desires to be tied into the electric grid.
Domestic water should certainly be another characteristic that buyers consider if they plan on living on the land. If purchasing land in a rural area, it’s wise to talk to the neighboring landowners with improvements and see what the depth, yield, and quality of their water wells are. (Some states have this information posted online on their Division of Water Resources website). If you see a water trailer or a pickup truck parked next to their house with a portable cistern, this should be a red flag as it likely means they are literally hauling water for domestic use.
When dealing with residential homesites it's important to consider the direction in which the land lays. For example, a prime home site in the Rocky Mountains will often have good southern exposure for generating great natural light in the cold winter months. On the other hand, a home site in the Texas Hill Country would ideally be more east facing and have a lot of mature trees on its western boundary, providing a good amount of afternoon shade over the home in the hot summer months.
Another question one should consider when looking at land is the long-term potential of that land generating an income. There are a variety of ways to generate income from vacant land. A few examples include the following:
- Income from leasing the mineral rights
- Income from leasing the pasture for grazing
- Income from leasing the land for crop production
- Income from leasing the water rights
- Income from leasing the land for storage (RV’s, boats, etc…)
- Income from leasing RV or tiny home sites
- Income from leasing the land for wind turbines
- Income from a hunting or fishing lease
- Income from recreational activities (mountain biking, ATV-ing, etc…)
- Income from harvesting timber
With the wildfires that unfortunately spread across many states this year, another important factor to consider when purchasing land is the likelihood of the land burning and the long-term effect it could have on the property. Is the land a healthy forest with little undergrowth vegetation, or is it full of dead timber that is likely to go up in flames? What are the neighboring properties like that border it?
Despite what many folks might think, selling and purchasing land is not an easy task. I encourage you to do your proper due diligence and think about one of the most important attributes of all, and that is the family memories that land can offer for generations to come. Whether it’s eating a meal from the family garden, watching a child harvest their first Thanksgiving turkey, or building a cabin next to the river, the right parcel of land can offer the opportunity to bring families together in a way that unfortunately far too few of people are truly experiencing these days.
This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners.
Justin Osborn, ALC, is a licensed associate real estate broker with The Wells Group. He is a member of RLI's Future Leaders Committee.