What You Need To Know to Make Taxes Less Taxing

This guest post was originally posted on National Land Realty‘s blog.

Disclaimer: This article is not intended to be construed as professional tax advice, always consult with your tax or financial advisor for additional information on how this will impact your personal or business tax situation.

As Margaret Mitchell wrote in Gone With The Wind: “Death, taxes, and childbirth! There’s never any convenient time for any of them.” Land experts know how draining taxes can be.

The taxes associated with land sales are complex, and as soon as you feel like you’ve got a good grip on them, tax laws change! Even with the many changes that happen, there are some things that are set in stone. In this article, we take a look at the backbone of land taxes.

1031s Are Your Best Friend

Instead of paying taxes on the sale, 1031 exchanges let you invest the proceeds of your sale into a like-kind property. You can defer paying federal and state capital gains taxes.

If you’ve sold land before, you are probably familiar with using 1031s for land sales. But did you know that you can also sell conservation easements, water rights, development rights, and more while deferring taxes as well? This can save you hundreds or even thousands in tax dollars.

Although 1031s are an amazing resource for land buyers, there are strict rules about which properties do and do not qualify for this program. Be sure to check with a local land expert to see if your property qualifies before selling. You can also get started by reading through some official guidelines from the IRS.

Unique Tax Rules For Different Kinds of Land

Different land types come with different benefits and drawbacks.

  • Timberland: Each state taxes timber differently. For example, in Texas, timberland property is taxed by the appraised value multiplied by the tax rate. In Massachusetts, the tax is five percent of fair cash value, plus an enrollment fee and eight percent yield tax. To check your state’s unique rules, check out this handy website.
  • Vineyards: Small-time vineyard owners could be entitled to a sweet tax credit for making American wine. This Title 27 credit applies to producers who make under 250,000 gallons of wine a year in America. You can get up to a nine percent tax deduction. Bottoms up!
  • Agriculture: The most recent tax bill made many changes favorable for agriculture. Starting in the 2018 tax year, farmers can immediately write off up to one million dollars of capital purchases such as breeding livestock, farm equipment, and single-purpose structures.

Capital Gains Tax

A capital gain is defined as a profit from the sale of property or of an investment. This gain is taxable at the state level and the federal level.

This is where capital gains gets tricky. Each state has its own rules. In states like Texas or Nevada, you can expect to pay around twenty-five percent. In California or New York, you can expect to pay upwards of 30 percent! Here’s a tool from SmartAsset that can help you get a rough estimate of what you can expect to pay.

How High Are Capital Gains Taxes in Your State?

https://taxfoundation.org/how-high-are-capital-gains-taxes-your-state/

No one enjoys paying taxes. But having a solid sense of the fundamentals of land taxes can help you save your hard-earned money and make you (and your clients!) the most profitable deal possible. 1031 Exchanges are such a dense topic that we can’t possibly cover all there is to know in this article. If you’re a land pro and you’d like to learn more about helping your clients take advantage of 1031s, check out RLI’s November VILT-online course: Tax Deferred 1031 Exchanges. If you’re a landowner looking to learn more about how your property can benefit from these, make sure to contact a land expert near you to learn more.

About the Author: Laura Barker is the Membership and Communications Specialist for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.

 

national land conference

Answering Common Questions About RLI Membership

“Why do I recommend land professionals join the REALTORS® Land Institute? Simple, it makes you money!” –  George Clift, ALC, Clift Land Brokers

We got such great feedback from our article Answering Common Questions About the ALC Designation that we thought we’d do a follow-up article about RLI Membership. We get dozens of calls every week about membership benefits, costs, and networking. Membership numbers have been on the rise, so we thought this would be the perfect time to answer the most common questions about an RLI Membership.

Q. Why should I become a member?

Becoming a member of RLI unlocks a lot of great tools and discounts for land agents. Membership includes:

  • Savings of $150 per course with exclusive member rates (excluding chapter and Land 101 independent study courses).
  • A personal profile in the Find a Land Consultant online search tool/member directory to be found by clients and other agents.
  • Access to a national network of over 1,300 land professionals.
  • Access to exclusive resources like a contract library, technology + services recommendation center, and a marketing kit filled with tips and advice.
  • Ability to apply for the prestigious APEX Production Awards
  • A subscription to the biannual Terra Firma Magazine.
  • And more! Check out the full list of member benefits on our website.

Q. What EXACTLY are the costs of becoming and staying a member?

The cost to become a member can vary depending on the month you join (we’ll go more into that in the next question), but a full year’s membership costs $445 plus a one-time $75 application fee. The annual renewal fee is $445.

 Q. Why does it cost different amounts to join at different points in the year?

If you looked on our website, you might be confused as to why joining in September is so much more expensive than joining in August. Our pro-rated dues schedule determines when your membership will expire and when you will need to pay renewal dues.

If you join between January 1 and August 31 of each year, your dues will be prorated through the end of the current year. If you join between September 1 and December 31, your dues will be prorated to include the rest of the current year as well as through December 31 of the following year.

The one-time application fee of $75 doesn’t change.

 

Q. I’m working towards my ALC Designation. Is it more or less expensive to be a member?

We’ve run the numbers. Long answer short, having an RLI Membership while working towards the ALC Designation will more than pay for itself in savings on courses. Plus, you get the added benefits of an RLI Membership.

If you are working towards the ALC with a membership, the total cost of six online courses ($445 per each of the five 16-hour courses plus $595 for the 24-hour Land Investment Analysis) at the member rate (a savings of $150 per course) equals $2,820.

Without membership, the cost of six classes ($595 per each of the five 16-hour courses plus $695 for the 24-hour Land Investment Analysis) would be $3,670. For the course work alone, they average ALC applicant will save about $900. Take out the cost of membership and the one-time application fee and you’ll still come out ahead by $380 in savings plus you’ll be able to take advantage of all the other property marketing, networking, and resources that are included as RLI member benefits.

Even when you add in membership costs and the one-time application fee, getting the membership will save you money in the long term.

Note: class prices are subject to change, and are expected to increase in 2019. For the most recent course pricing, see the individual course registration pages.

Q. How does RLI promote its members and give them exposure to get more clients?

We’re dedicating an entire October blog post to all the ways RLI promotes its members, so we’ll save the in-depth descriptions for that, but here are some of the main ways that we promote our members:

  • Ads in top industry publications, including The Land ReportLAND Magazine, Farm and Ranch Magazine, NAR Commerical Connections Magazine, the Wall Street Journal, Open Fences Magazine, and the TerraStride HuntStand app.
  • Host the Find A Land Consultant search tool
  • Write guest posts for top industry websites such as LANDTHINK, Land.com, and National Land Realty that highlight the benefit of working with ALCs and RLI members.
  • Run digital ads on Facebook and other industry websites
  • And so much more. Keep an eye out for our October article covering the many ways RLI promotes its members!

Additionally, we encourage all of our members to harness the power and prestige of the RLI brand by promoting themselves as RLI Members. We even have a member logo for our members to use on their marketing materials to help create awareness in their local markets.

 

RLI Membership is an endlessly helpful tool for land experts that continually provides value to its members. If you don’t believe us, ask the members themselves! These glowing reviews are just a few examples of how land experts used their membership benefits to become the best in the industry. As George Clift, ALC, once said “Why do I recommend land professionals join the REALTORS® Land Institute? Simple, it makes you money!”

If you have more questions about membership, contact us at 1-800-441-5263 or rli@realtors.org. Ready to join RLI? Simply fill out the online membership application today!

About the Author: Laura Barker is the Membership and Communications Specialist for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.

Using Video to Close More Land Deals + Better Serve Clients

We’re living in the golden age of video. Video editing software is cheaper and more user-friendly than ever before, millions of people head to streaming sites like YouTube every day, and smartphones have basically become tiny video cameras you can take anywhere.

Land experts are (or should be!) making the most out of the advancements in video, too. Video is used for everything from taking stunning shots of properties to reaching clients on a more personal level. We reached out to a few expert Accredited Land Consultants (ALCs) to find out how they use video to close a deal.

Drones

Drones are taking the land industry by storm. They can do everything from watering crops to monitoring livestock. Drones also make excellent videos. You don’t have to worry about getting your thumb in the way of a shot or your hand shaking as you hold the camera. Drones also give you incredible birds-eye shots of properties that you can’t get anywhere else.

Drew Ary, ALC, with Keller Williams Advantage in Coweta, OK, likes how efficient and high-tech drone videos are.

“Taking multiple 5+ second Drone videos during a listing appointment and using the DJI app to patch them together to make a 30-45 second video of the property immediately after flying is the quickest route to getting a John Hancock… what a way to show a client you are on the cutting edge of technology,” says Ary.

The Personal Touch

Video allows clients to connect with you on a personal level. It’s one thing to read an article about an agent, it’s a completely different thing to see and hear them deliver the same message.  Wendy Johnson, ALC, with United Country Texas Landmark Properties in Royse City, TX, uses the personal touch of video marketing to connect with clients for long-lasting relationships.

“Video marketing is providing me a good return on investment. I receive leads that I have been able to convert to listings and buyers,” says Johnson.

Johnson’s video of a Texas ranch shows off the gift of personal touch. Everything from the instrumental music to the smooth shots of every corner of the ranch pulls you in and makes you want to learn more about the listing.

“I believe because of the content marketing that a video can offer. I am able to utilize it in selling my properties as well as to engage an audience which can facilitate long-term relationships, which builds trusts and confidence in both myself and clients,” says Johnson.

Beyond Properties

Videos showing off your properties are great, but that’s just the tip of the iceberg. About Me videos on your website are a great way to let your clients know a little more about you and your business. A great example of this is a promotional video like the one Drew Ary, ALC, created. Ary talks a bit about his experience in the industry while you look at sweeping views of Oklahoma land.

You can create:

  • How-To’s/Informative videos (Great content for social media. It shows off your expertise. For example, RLI has videos explaining our education program and member benefits.)
  • Promotional videos of your brokerage
  • Compilation videos (Show off your most successful sales!)
  • Videos that tour the neighborhood of the property
  • And much more! Don’t be afraid to get creative.

Video is king in 2018 and is looking to keep its throne in 2019. It’s easier than ever before to create videos, and thanks to social media and sites like YouTube, more people are tuning in. Making the most out of video is a great way to expand marketing and reach new clients like never before.

About the Author: Laura Barker is the Membership and Communications Specialist for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.

Timberland is Timberland… Right?

The majority of our market in the Southeastern United States consists primarily of timberland. One of the biggest problems I encounter with both Buyers and Sellers of timberland is that they don’t understand the value components of timberland tracts and what questions to ask to determine them on a tract by tract basis. A bigger problem is that many times, neither does their agent. Understanding what to look for in timberland enables you to be a smarter seller, buyer, or agent.

What makes a good timberland tract? A combination of important factors come into play with timberland: soils, site preparation, stocking/ stand density, and as always with real estate: location.

Soil

In regards to soils, you want to ensure that the soils are capable of growing the species that perform best on that site and grow at a rate competitive with other species/products in your timber market. And while you can take actions to enhance your soil’s growth rate like fertilizing or mechanical site prep applications like bedding, the better your soils are to start with, the faster you’ll see results from your timberland. Learn what site index rating the property has for the species you intend to grow or the species it’s already stocked with. The site index correlates closely with the yield of your forest. It acts like a score; that score is the height of that species at a certain age. The higher, the better. A site index score of 70 for loblolly pine in a plantation setting, the most common species see in timberland in our market, indicates that under normal conditions, a dominant and codominant loblolly pine would be 70 feet tall at 25 years old. Always remember that Site Index is species and age-specific and can vary greatly by both, so before using a tract’s site index rating to make a financial decision, be sure to confirm what base age is being used.

Site Preparation

Regarding site preparation, an analogy I use frequency is a vegetable garden. Which grows best – A garden that was tilled and sprayed or removed competing weeds, etc. or one that was planted directly into the soil without any site preparation? The prepared site of course. Timberland is no different, especially in a plantation setting. Reducing the initial competition through chemical and/or mechanical site preparation applications can greatly affect the long-term yield of timberland.

Stocking/Stand Density

When it comes to stocking and density, understanding your goals is key. Some saplings, speaking primarily of pine here, are genetically designed to grow fast but not necessarily clean, meaning more limbs and wider growth rings, both of which can affect the stand’s ability to grow lumber grade logs and poles (in pine stands). These stands will be more prone to produce products that are pulp and chip-based throughout their financial lifetime, also known as a “rotation.” Regardless of the source/type of seedlings you have, stand density can also affect the quality of your timberland. Wider spacing equals fewer trees. That helps them grow in diameter faster, but may limit vertical growth and the natural pruning that occurs in a properly stocked stand. Beyond that, a more simplified explanation can be fewer trees potentially equals fewer harvests and less money over the lifetime of the stand.

Assuming all things being equal between two tracts of timberland, location can be the most important factor in determining which is more valuable. Logging and hauling costs are the first expense that comes out of the gross income generated by a timber sale. The closer your proximity to mills that process the products your timberland will produce, the less it will cost to harvest that timber and the more competition you’ll see for that wood, both of which yield a higher net income to the landowner. The net income from a timber sale is also known as “stumpage”. Stumpage is the rate most experts are quoting when asked about current timber prices. Location can also determine what types of weather you can perform harvests in, which affects when you can bring your timber to market. Tracts with logging limitations due to weather concerns, such as wet natured or floodplain tracts, can be restricted to selling during the dry season vs tract with dryer ground or abundant road frontage that can be logged year round. Being able to sell your timber in a wet weather market can allow you to take advantage of huge swings in timber prices because when supply is limited, demand rises, and prices along with it. I’ve witnessed timber prices go as high as four times the norm due to wet weather logging demand.

I’m often asked how “the timber market” is doing or “isn’t timber down right now?” It’s important to remember that timber is a commodity and there is no single “timber market”. Every species can produce several product classes, each has their own market with contributing or limiting factors, and the current value of each product class is driven by supply and demand. One market may be down while another is up. Arming yourself with a true expert in timberland is imperative to ensuring your maximum yield is reached as a buyer or seller of timberland.

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. For more posts like this, click here.

Clint Flowers, ALC is a top producer with National Land Realty, a member of the REALTORS Land Institute of Alabama, and a member of the 2018 Future Leaders Committee.  He was a NLR Top Producer Nationwide in 2016 and 2017. He also won the 2017 APEX National Broker of the Year award for Timberland.

How To Increase The Equity Value Of Your Recreational Land

My days are spent working with buyers and sellers of recreational and tillable land. So when I was approached about writing an article about recreational land it was a no-brainer. My fellow Minnesota agents and I do seminars every year at our state’s Deer Classic and the topic is “Land Buying & Selling 101”. During each seminar, we do a Q&A and we typically find many of the questions are about building equity in a current property or future property.  Although I live and work in MN, this information will hold true for many recreational properties and almost any place whitetail deer call home.

In my opinion, the cheapest and most effective thing you can do to grow equity and value to your property is purchasing some trail cameras. Buyers are always asking me to see trail camera photos from the property for sale.  When we check the analytics of our listings, it is proven that a listing with good trail camera photos vastly outperforms a listing without them. In addition, I personally advise my new buyers to go buy a thumb drive and save trail camera photos from day one, even if they have no plans of ever selling. It is great to be able to show a buyer 2-10 years of trail camera photos and allow them to see the quality and quantities of deer using the property.

The next low cost and high return item would be “road appeal”.  Much like curb appeal on a house, that first impression of a property will have a lasting effect. Start at the entrance of property; even if your property is not completely fenced, installing a simple yet sturdy gate that is lockable with a chain and adding a “no trespassing” sign, will add appeal for a buyer.  This low-cost item gives buyers a good sense of security and sets the tone of what they are going to see when viewing your property.  If you have spent any time on a farm you know there is a good chance of coming across an old junk site.  Removing these items can be time-consuming but in the long run, it will be build value in your property and make it more marketable when it comes time to sell. Clean up any trails you have on the property so when touring the property it is easy to navigate.

A property that is mainly used for whitetail deer hunting in a managed neighborhood is highly sought after. Creating a so-called managed neighborhood will take a great deal of work as well as time but will give you an abundant return.  I’m not going to discuss how a so-called management group should be run as that is an entire article in itself.  Ideally, you want your property to be in the center of this management group. Reaching out to all the neighboring landowners of your property is where you start.  Once you get them on board with a management plan ask them to reach out to their neighbors and so on and eventually you will have a large area of landowners all working towards the same management goals.  Sounds easy, but I can tell you it is not. This will take a lot of time and you will most likely have some people that will not want to participate and that is ok. The goal is to try to get as many on board as possible and work on growing the group.  This typically will take years, but keep in mind the value you are adding to your property.

The next few items are more labor-intensive and cost more money to complete and maintain. If you watch any hunting show or spend any time around an avid hunter you know that food plots are a huge factor when it comes to hunting whitetail deer these days. Just remember when it comes to food plots bigger isn’t always better.  Making sure you locate the food plot to maximize the hunting and access on the property is more important than the size of the plot. Having several well-placed food plots and keeping them maintained every year will be not only be a great increase in value, it will also help make memories when hunting season comes around.  In my opinion even more important than a food plot is water on a property. Not all properties will have flowing water on them.  Even those that do may not have the water in ideal locations for hunting. If your property is lacking a water source I personally would add this feature before I would add a food plot.  This can be as extravagant as hiring an excavator to install a pond in a location for natural run off to hold water or as simple as taking a 55-gallon drum and cutting it in half and digging it in the ground.  I personally use a product made by a local company that holds 100 gallons of water and has a trough for the water to sit in and allows all kinds of wildlife to drink from it. I have 5 of these on my property and they are all located in great travel and staging areas I hunt. I do have to fill them a few times a year but since they are mobile they give me the option to relocate them.  Since they are portable I can make location changes based off of my hunting observations. I can’t do that with a pond made by an excavator.

A good trail network will allow you access in and around a property.  The extent of the trail network needed will depend on the topography and makeup of the land. I personally deal with the rolling bluffs of Southeast Minnesota so creating access from the bottom to the top is almost a must if you want to get the most for your property.  Most landowners do not own excavating equipment so I highly suggest asking around to find out who others have worked within the area to do such projects. It is in your best interest to do your research and get references prior to hiring someone.  A quality bulldozer operator can accomplish a lot in a short time. Most first time buyers are nervous about what it will cost to create a good trail network.  I have even encouraged sellers in the past to invest in a trail network as it I knew it would make their property more marketable and they would see the return on their investment.

Hunters from Minnesota we are used to hunting in extremely cold weather.  In my opinion, the old saying “you’re not a real hunter if you sit inside a blind” has gone out the window in the last decade. Box blinds are here to stay and the more hunters that hunt out of them the more buyers want them on their property.  As an example, our state’s Deer Classic event this year included at least 7 different manufacturers of enclosed deer stands. If a manufactured stand is not in your budget you can also build it out of lumber, just make sure it is clean, sturdy and safe. From there adding quality sturdy ladder or hang-on stands will also increase your property value. Stands are something every hunter wants and if you have created a great location for them and they’re of good quality you will always get your money back out of them plus you get to enjoy them while you own the property.

“Has this property been surveyed?” is almost always asked when I’m showing a potential buyer a property.  In my territory, the land is not flat and often times you can’t see from one corner to another.  Spending the money to hire a professional surveyor to mark your property boundary corners as well as points between the corners will make a buyer more comfortable when purchasing your property.  It also allows you to easily establish or maintain your property line. This can also be helpful when doing any logging, adding a trial system, food plots, water locations or even hanging stands and posting your property.  With anything, I would suggest getting a few quotes on this project and asking around on who someone would recommend. If you are not in a time crunch to get this done I would recommend asking the surveyors what time of the year they are least busy as they may give you a better price during their slow time versus their peak time. In my area, the downtime is during the winter.

These next three improvements are much more expensive but can add some serious value to your property. They are not going to be good for all buyers and will require more thought than the previous improvements I have mentioned.  These three items, in no particular order, are 1) adding a driveway, 2) bringing in power and 3) drilling a well.  A couple questions you need to ask yourself or your group of owners are “Will this improvement be something almost all future owners of this property see value in?” and “Could it be any cheaper to do it later versus now?” Adding a driveway that is easy to travel won’t get cheaper with time and will always make the property more enjoyable and user-friendly.  Bringing power to the property will also be worth your investment. This can become costly if you are having the power brought in a significant distance.  However, I have talked with clients that had power brought to their property for almost free and I have met clients where it was going to cost them $10,000 or more to get power to their property. So this one can get tricky, if the cost to bring power to the property is extremely high and you are not going to use it for a length of time it might not be an investment you will want to add to your property. The last of the three items, drilling a well can vary in cost all over the country. Personally, I know the cost is pretty significant in Southeast Minnesota.  However, when I tell a buyer there is a well on the property they all understand what cost went into it and they see the value. I do not see the cost of these three items getting any cheaper by waiting.

Now we are going to talk about the biggest decision that can add value but at the same time affect the marketability to the greatest number of future buyers of your property.  I get people all the time that ask if they will get their money back out of a cabin if they built one.  My advice is to keep it simple, yet clean and functional, don’t get elaborate or install high-end finishes if you want to make sure you get your money back out of it. It is best not to overbuild as it will limit future potential buyers. As soon as you make a cabin or house addition to a property you immediately take some future buyers off the table. The goal is to not eliminate too many of the remaining buyers by building something that is either too personal or elaborate that it would shrink your potential buyer pool so small you will not see your return on your investment.  Don’t get me wrong if you want to build a custom log home on your reactional land and you enjoy it for 20+ years, go for it. You will get your return out of the use and enjoyment.  If you have a short-term plan for the property then stick to something simple.

As you can see there are many different ways you can increase the equity in your recreational land. These improvements may take years or even decades and can vary drastically in cost but they are all great ways to increase the equity value of your property while enjoying it.  I will leave you with the one thing I always ask while giving my seminars. “In a show of hands how many of you have ever made any memories on your 401k or stocks or bonds?” No one has ever raised their hands, but I can promise you every single landowner in America has made memories on a piece of land they have invested in. Owning land is one of the best financial investments you can make in your lifetime and the memories you make on it while you own it will be your favorite return on investment.

About the Author: Bob Stalberger, ALC is the Land Specialist in Southeast MN for Whitetail Properties Real Estate. Stalberger is the Realtors Land Institute Minnesota Chapter President and a recipient of the Apex Awards 2017 Top Twenty Producer. Bob specializes in selling hunting and farmland and has been an ALC since 2016.

Answering Common Questions About the ALC Designation

The Accredited Land Consultant (ALC) Designation is one of the most prestigious and difficult to earn designations in the land industry, so it makes sense that those pursuing it have a lot of questions both leading up to and while going through the process. Every week, we get calls concerning how to earn the ALC, so we thought we’d dedicate a post to some of the most frequently asked questions.

What exactly is the ALC?

The Accredited Land Consultant Designation is given by REALTORS® Land Institute to those land experts who have completed RLI’s rigorous and strict education, experience, and ethical requirements.

Having that gold ALC pin shows clients that you have an unparalleled level of expertise and experience in the land industry. Check out more reasons why a client would choose to use an ALC over any other land professional in our guest post on the Land.com blog. In addition to their impressive resumes, ALCs are also highly respected for adhering to the ALC Code of Conduct and the NAR Code of Ethics.

Becoming an ALC doesn’t just mean bragging rights for your clients. It opens the doors for additional networking opportunities and discounts on everything from the National Land Conference to classes.

Your wallet will thank you in the long-term, too. Did you know that according to a recent RLI survey, the average ALC earned $373,925, which is approximately $100,000 more per year than the average earned by non-designee respondents? Knowledge is power, and in this case it’s the power to better serve your clients which in turn means more business and more clients.

What are the requirements to get the ALC?

Required Courses (56 hours — Must take all three):

Specialty Courses (32 Hours – Pick two courses):

Elective Courses (16 Hours – Pick one or pick another from Specialty Courses)

Other requirements include:

  • Experience. A minimum of 2 years of experience in land sales or brokerage or a minimum of three years of comparable real estate experience.
  • Volume. A minimum of 5 closed land transactions totaling $10,000,000 OR 25 separate land transactions of which no more than 20% involve residential parcel sales (more specific details on the different types of land sales here)
  • Knowledge. Pass the cumulative ALC Exam.
  • Application. Submit a comprehensive portfolio
  • Recommendation. Submit recommendation letters and approval by the RLI Board of Directors.

Who is the main contact for me during this process?
If you have any specific questions about the above requirements or your qualifications, please reach out to Aubrie Kobernus at akobernus@realtors.org or 1-312-329-8837.

There’s a final exam? Do I have to remember everything from every single class?

The final exam only covers the three required courses that you completed and will be using to apply towards the education requirement. These include the Land Investment Analysis, Land 101: Fundamentals of Land Brokerage and either the Tax Deferred 1031 or Transitional Land Course depending under which requirements you began your coursework.

If you took the 1031 Class before the education requirements changed, no need to panic. You can still take the cumulative exam that features the 1031 Tax Deferred Exchanges course instead of the Transitional Land Real Estate course.

Do I have to be a member of RLI to become an ALC?

You don’t need to be a member of RLI while you are working towards the education and transaction requirements (although you do get a discount on classes if you are!), but you do need to be an RLI Member when you submit your final portfolio and for as long as you hold the elite ALC Designation.

If you have more questions about RLI membership, we’ll be posting an article called ‘Answering Common Questions About RLI Membership’ in October. Keep an eye out for it! For now, make sure to check out our RLI Member Benefits.

I have another designation and/or prior education in the field, is there any way I can skip some classes?

There is! RLI has a Fast Track program where people with the following designations or education will qualify them to opt out of taking all courses under the education requirement other than the three required courses.

  • CCIM (Certified Commercial Investment Member)
  • SIOR (Industrial & Office REALTOR®)
  • CRE (Counselor of Real Estate)
  • AFM (Accredited Farm Manager of ASFMRA)
  • ARA (Accredited Rural Appraiser of ASFMRA)
  • RPRA (Real Property Review Appraiser of ASFMRA)
  • AAC (Accredited Agricultural Consultant of ASFMRA)
  • MAI (Member, Appraisal Institute)
  • CAI (Certified Auctioneer Institute)
  • CPL (Certified Professional Landman of AAPL)
  • SR/WA (Senior Right of Way Professional of IWRA)
  • AICP (American Institute of Certified Planners)
  • Those who hold either a bachelor’s or master’s degree, with a minimum overall GPA of 3.0, with a major in real estate, development, forestry, or a program related to a land business specialization, may also apply for consideration for Fast Track to the ALC Designation Committee. Fast Track will only be granted to the applicant upon approval by the ALC Designation Committee.

You will need to provide proof of your designation before being approved for Fast Track option.

Achieving the ALC Designation isn’t easy, but nothing worth getting ever is. The ALC Designation is highly respected and sought after all across America. Our numbers are growing every day. Will you be the next one?

If you have more questions about the ALC, contact us at 1-800-441-5263 or rli@realtors.org.

About the Author: Laura Barker is the Membership and Communications Specialist for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.

Hidden Talent: Property Value from Untapped Sources

Everyone has a hidden talent. For some, it is a performance skill such as singing or playing an instrument. For others, it’s a marketable skill like welding, baking, or artistry. And for many, it’s something simple but impressive – magic tricks, stunts, or the ability to cram 23 marshmallows into your mouth without choking. Whatever your particular talent, those who are meeting you for the first time can’t see that talent on the surface. You must spend time with someone and get to know them before unlocking what’s inside (People don’t cram marshmallows in their mouth for strangers). But these talents make people fun far beyond simple socialization. They make people unique and interesting.

Land is no different. And while I have never seen land sing or bake, I have seen many pieces of land with their own hidden talents, that is, attributes that make for hidden value sources for owners and sellers. Finding and taking advantage of these hidden talents can provide higher cash flow, a higher selling price, or even intrinsic benefits to landowners and sellers alike. Here are just a few examples of places to look for, and hopefully find, hidden value in you or your client’s property.

1. Mineral Rights

Oftentimes, people can’t see beyond, well, what they can see. What is contained below the surface is sometimes the most valuable part of the property. Mineral rights can be very lucrative depending on location or resource to be mined. This may be a value a buyer wants to tap right away or at some point in the future after an alternative use. For example, here in Florida there are pieces of land that are used for cattle grazing and then later for mining of phosphate. Still later, some of the phosphate land is reclaimed for reservoirs or even single-family homes. In a unique case, there is even a luxury golf course build on an old phosphate mine near Tampa (checkout streamsongresort.com. This may be one of the best examples of hidden value I’ve ever seen.) Mineral rights are tricky and investing in them somewhat speculative. But properly considered, their value is not to be dismissed. For a better understanding of mineral rights, try the RLI course on the subject.

2. Conservation Easements

This one gets a lot of debate. Some people would argue that this isn’t hidden value, as putting a conservation on your land restricts the use, therefore devaluing it. And while I don’t disagree that selling prices for encumbered land are necessarily lower than their unencumbered counterparts, the real question lies in property use. I’ve seen cattleman pursue easements that remove their development rights – but only on land their family has been running cattle on for 100 years that they would never think of selling. These easements include what are called “compatible use agreements” which allow them to continue running cattle at a reasonable volume. Money in their pockets, they continue to operate as they always have. It is important to understand not only your rights but also your obligations as the owner of easement land. But if those line up, the opportunity could be an attractive one.

3. Mulch

This is definitely a much smaller scale example but still worth mentioning. Do you have an area of trees on your property that you think is worthless? Hire someone to clear those trees and turn them into mulch. I have personally had clients who have collected thousands of dollars from just few acres of pine or cypress. You don’t have to have a section full of 15-year-old pines to realize value from trees. This is certainly not a good retirement plan. But for smaller areas with no real merchantable timber, mulching is an excellent option that will provide some income.

4. Leasing – Hunting, fishing, camping, ATV riding

Again, not a lottery ticket here, but you don’t always need thousands of acres to provide a recreational area for someone. I’ve seen people lease as little as 10 acres for people to ride ATVs or dirt bikes on and as little as 100 acres for people to hunt on. Usually, these are vacant land pieces within 30 min or so of a city for people to just enjoy the outdoors. Sometimes referred to as “play land”, pieces like these provide the city-dwellers an opportunity to get away, get dirty, and enjoy some fresh air. Some landowners even provide limited use of their land free of charge to non-profit organizations. Not only is this great community involvement, but could also provide an opportunity to deduct the fair market value of that use for tax purposes (Not offering tax advice. Consult your CPA J).

Whether your property can swish an over-the-shoulder 3-pointer or do a double back flip off the diving board, it’s got something valuable that isn’t obvious. Take some time to find that value for yourself or your client for maximum property benefit.

What? Oh, me?? I play the piano. Happy to bang out Don’t Stop Believin’ for you anytime.

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. For more posts like this, click here.

mcdow, calebAbout the author: Caleb McDow is a land specialist and vice president with Crosby & Associates, Inc. in Winter Haven, FL, with a Master of Science in Real Estate (MSRE) and is a licensed private pilot and drone operator. 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

Want to Sell Your Listing Faster?

Do you have an amazing property that’s been sitting there for weeks and you’re not getting any real movement? The amenities the property offers are everything any landowner could want, but you’re starting to think the listing may need a little tweaking? Here are some things you can do to boost your listing and get it to the finish line faster!

1. Maximize Your Social Media Reach

You may have already shared the property on your personal and business Facebook pages, but don’t forget to also share it on other social media platforms such as Instagram and Twitter. Remember that each platform has a different audience, so you’ll be able to reach all kinds of people – some that are more visual (Instagram) or others that just want a quick read (Twitter). You can even post a short video clip on Instagram of things such as the water running through a creek on the property or a prescribed fire that just took place. And don’t forget you’re also able to post multiple pictures and videos in one post on Instagram!

2. Use Descriptive Language

The title is the first thing a person sees when looking at your listing, so make sure you’ve got a good one! Go back and re-check it to make sure it’s clear and concise and is a good description of the property. Use words that are strong and describe the property well. (It sounds so simple, but it’s something that’s easily forgotten!) So, if you have a property with 50 acres of timber, you’ll want to use the word timberland in the title and description. Missing little things like that in your listing can have big consequences, so make sure you’re using your words wisely.

3. Use Technology Tools

There are a multitude of tools at your disposal nowadays. Thank goodness for the age of technology! Of course, you’ll already have numerous pictures of the property, but don’t forget about other visual elements you can add to your listing such as property highlight videos with drone footage, panoramic images, interactive tours of the property and 3D virtual indoor tours of any homes that may be on the property. Just remember you want to cater to all types of buyers and different kinds of situations, like buyers that are located out of state who want to look at the property in person, but perhaps can’t at that time. That’s when tools such as our new interactive touring technology, Land Tour 360™, come in handy.

These three tips won’t guarantee 100 percent that you’ll sell your listing faster, but they will definitely help it go farther, reach as many people as possible, and help you sell it faster!

National Land Realty is a full-service real estate brokerage company specializing in farm, ranch, plantation, timber and recreational land across the country. NLR currently represents land buyers and sellers in 20 states. To learn more, visit www.nationalland.com.

Shift Your Brokerage into High Gear

Five years ago, I was a hobby farmer in Western Ohio, on the prowl for a new career. After 19 years in the automotive industry, working my way up from lot porter to salesman to GM and president of a dealer group, I was ready for a change.

I was eager to apply my background and experience in consumer marketing to a new line of work, one that preferably highlighted my passion for land. Should I get a broker’s license or go to work for a management company or call up a trust department to see if they had any openings? I honestly had no idea how to proceed. Fortunately, my wife, Jessica, made a brilliant suggestion: Call the publisher of that magazine I was always raving about, and see what he had to say. You probably already have an inkling of how things turned out.

I lobbed an email to The Land Report publisher Eddie Lee Rider, and that very day I got a call back. The sales guy in me immediately liked this. Not five minutes into our initial conversation, we both sensed an opportunity. My gut told me to sign on with the Magazine of the American Landowner. After a heart-to-heart with Jessica, that’s exactly what I did.

Almost immediately, I recognized that the tenets of marketing and branding that build successful dealer groups also applied to the successful marketing of land. I guarantee the lessons I learned as I worked my way up from the mailroom to the showroom and finally the boardroom can better your book of business.

 Consistency is Key

One of the principle tenets of automotive marketing is that reach without frequency equals wasted money. Eddie Lee hammered home this very same point to me. “If someone wants to buy a one-time ad, tell them not to waste their money,” he says. “Selling land isn’t about when a broker is ready to market a listing. It’s about when a buyer or a seller is ready to pull the trigger.”

“Consistency is key” is especially true when marketing land and your services. A well-crafted branding message, delivered consistently, creates top-of-mind name recall. In my humble opinion, this could well be the factor that generates that all-important phone call from a potential buyer or a motivated seller.

 There is No Off-Season

Many industries target a certain time frame to ramp up marketing. Car sales is not one of them. It may seem as though dealers are doubling down when they do a “year-end clearance,” but that’s just one of many arrows in their quiver. How many times a year do you see ads about factory incentives? Or special dealer financing? By the time you factor in all the limited-time offers that are pitched – President’s Day, Mother’s Day, Memorial Day, Back to School, Black Friday, New Year’s Eve – a far more sophisticated strategy emerges. Automotive dealers market 24/7/365.

So if investors who buy and sell land have no off-season, why should you?

Yes, we both know that as the calendar year wraps up, so does deal pace. I equate this to an auto dealership’s year-end clearance. But if your own marketing slacks off during the off-season while your competitors are busy reinforcing their branding, guess who gets the cold call in the middle of winter? Guess who hits the ground running when the snow melts or school lets out? Not you.

As entrepreneurs, our instinct is to keep our powder dry when things slow down.

Yet the decision to buy or sell a legacy property is often a family decision that is discussed and debated during the off-season, a.k.a. the holidays. Does it really make sense to pull back your marketing at the exact moment you need to be building your business?

Like countless brokerages coast to coast, The Land Report shifts into high gear as spring turns into summer. Yet we consciously produce our biggest issue of the year, which features The Land Report 100, so it comes out in December. Why? Because we practice what I’m preaching. Our must-read content is on coffee tables and in private jets precisely when families gather for the holidays.

Effective marketing is a full-time, year-round commitment. The consistent marketing message that you deliver, even during spells of lower activity, builds brand equity and name recall. These are priceless.

Marketing is Not an Expense. It is an Investment. Treat it as Such.

Best practice dictates you establish a marketing budget and commit fully to it. Budgets create limits; you can’t have a presence everywhere. So, do your research, negotiate well, and pick your platforms based on their position within the industry. Only invest in favorable brand association. Demand added value for your marketing dollars. Above all, challenge your marketing partners to deliver your message effectively and specifically to the right audience. Trust but verify.

Please note that I said “platforms.” Do not put all your eggs in one basket, be it print, online, or direct mail. And that includes my own title, The Land Report. Do you go to the trade shows your target buyer attends? You’d be surprised how many of those events take place during the so-called off-season. How about hosting your own event, even if it’s just a cast-and-blast for a handful of key clients. Again, money well spent.

Fish where the fish are. By that, I mean make sure you connect with your target market in person, online, via direct mail, and in print. That’s a sound investment.

Branding is Not A Slogan. It’s the Truth.

I’ve always been a big fan of Ford’s slogan: Built Ford Tough. It’s confident. It’s catchy. And it hammers home the fact that more than a century after Henry Ford founded the Ford Motor Company, Ford is very much an industry leader. I know that for a fact because I spent the majority of my career with the blue oval.

Let’s apply that marketing savvy to your business. If your brokerage has been around for a while, what are you best known for? A specific land use? A certain market? A specialized expertise? Spell it out in an honest, straightforward manner. At The Land Report, we call ourselves The Magazine of the American Landowner. It’s confident. It’s catchy. And it hammers home the fact that we share the stories of America’s leading landowners.

But what if you’re new to the business and just starting out? What drives you? What inspired you to launch your business? Are you a longtime local? Then put those deep roots and your local ties to work for you. Maybe you relocated to the land of your dreams. If so, doesn’t your trailblazing decision make you the ideal candidate to pave the way for others who might want to do so? Do you love to hunt? Is life better on the back of a horse?

Consider these questions and write down your answers. Look at it closely. Refine it. Hone it. Buff it. THAT is your brand.

There’s Never Been a Better Time to Market Your Brand

The landscape of marketing choices for land professionals has never been more diverse. Traditional advertising is gone. Kaput. Once upon a time, advertising featured an “offer” that was deliverable through standardized channels. Today, it’s all about experience marketing. When I got my first paycheck in the automotive industry, Facebook, Google, and YouTube didn’t even exist. By the time I left, key influencers were creating billions of impressions with blogs and podcasts that reached consumers via their iPhones, a product that debuted in 2007. This avalanche of new technology has created exciting opportunities for small business owners to create and control marketing and branding. Use it to your advantage.

I’m a big fan of Instagram. The visual-forward nature of this rapidly growing platform and its ability to integrate video and drone footage gives a broker the unique opportunity to conduct virtual showings on multiple listings from a handheld device. If you are a land broker in 2018, an active Instagram account is a must, not an option.

Finally: hashtags, hashtags, hashtags. Marketing guru Gary Vaynerchuck insists that for real estate professionals, the most effective way to grow your Instagram following is through the use of strategic hashtags. This means the use of a minimum of 10 hashtags per post. I recommend including hashtags featuring the state where your listing is located as well as the type of property – i.e., #farm, #ranch, #timberland, #hunting. Keep the hashtags relevant and watch the interactions with your posts build.

Thanks to Jessica’s suggestion, I’ve been on board with The Land Report going on five years now. Even better, I’m applying insights and ideas that I gained in one of the most competitive industries to my new career. I sincerely hope that one of these kernels of truth helps you take your book of business to the next level in 2018 and beyond.

P.S. If you want me to share more, reach out to me at davidz@landreport.com. I’ll even help you set up that Instagram account you’ve been putting off. 😉

About the Author: David Zawalich lives in west central Ohio with his wife, two kids and a Wire Haired Pointing Griffon named Zeke. His love of land and the outdoors was sparked as a child in the wilds of northeast Pennsylvania. He employs his unique vantage point as a landowner and marketing professional as the Associate Publisher of The Land Report.

Social Media Beyond Facebook Part Two

Facebook isn’t the social media giant it once was. Yes, it still has the most active users of any social media site, but it is losing users (especially in the younger generation) fast. Since the land industry thrives off of social media marketing, we wanted to see what different sites had to offer land agents.

In part one, we covered social media platforms such as Instagram and Twitter. In this week, we’re going to look into LinkedIn and Youtube.

LinkedIn

Keep It Professional

On platforms like Instagram and Twitter, there’s room to be a little goofy. The #farmhumor thread is hilarious! LinkedIn is more formal, so your profile should reflect that. If you have a professional headshot, LinkedIn is the perfect place to show it off.

If you are looking for inspiration, check out these ALCs LinkedIn pages:

Chris Miller, ALC

Lou Jewel, ALC

Kyle Hansen, ALC

Bill Eshenbaugh, ALC

These ALCs write and share content about the land industry. This shows potential clients that you are tuned in to the latest industry news. Bill Eshenbaugh’s in-depth articles have helped him become a leader in the land industry.

Get Referrals

LinkedIn is the best social media platform to give and receive referrals.

“Your greatest opportunity here may be to get referrals from other professionals,” says Tim Hadley, member of the 2018 RLI Future Leaders Committee in his recent guest post for RLI.  “If a busy residential agent stumbles across a land listing, they may try to figure it out on the fly. However, if you are top of mind as the land expert in your area, it would behoove her to send it to you and collect a referral fee from the expert.”

Keep Your Information Up-To-Date

LinkedIn is one of the first places people search to find professionals, so make sure your information is current.

“LinkedIn, especially, is made for business-to-business relations and is the most business-centric social platform online right now,” says Nobu Hata, Director of Member Engagement for the National Association of REALTORS®, in his guest post for RLI. “Complete your profile with a current pic, and don’t forget your contact information and website!”

YouTube

Create playlists

Playlists make your page easy to navigate, especially if you have a lot of content.

One example of a great playlist is the Get the Most Out of Your RLI Membership playlist on the REALTORS® Land Institute’s YouTube page. You can watch the tutorial in five-minute videos, or if you want, you can watch all at once.

Good voiceovers

Nothing ruins a great video like a terrible voiceover. If your voiceover is shaky, keeps cutting in and out, or is muffled, you’ll lose viewers before the video hits the five second mark. You don’t have to have a voice like Morgan Freeman or Robert Redford to do a great voiceover! Here are some tips to make your voiceover ever better:

  • Make sure to use the best recording equipment you can get your hands on
  • Try to find a local studio or set up an empty room to act as one for your recording to eliminate echo and bad feedback in the recording – this will save you a lot of time editing down the road.
  • Soothe the vocal chords beforehand with tea or water.
  • Speak as if someone on the other side of the room can hear you. Speaking clearly and loudly (without sounding like you are yelling at the listener!) will get the best results.
  • Talking fast in a natural reaction to stress or just wanting to get something over with on the forth take (or the fifth or the sixth…). Try timing yourself when you practice to see if you are zooming through your voiceover.

Keep It Brief

Ever see an interesting video, but decide against watching it because it’s twenty-two minutes? When making content for your YouTube channel, focus on making videos ten minutes or, preferably, less.

“Remember that people only watch short videos unless there is a super compelling reason sit still for five minutes,” says Haldey. “A 45-second video with subtitles is better than a rambling five-minute video. Most videos are played on mute so make sure to add subtitles to grab attention.

Social media marketing is always evolving. Just when you feel comfortable on a certain platform, a new one pops up. We hope this two-part series gave you an inside look at different social media sites. If you haven’t read it yet, make sure to check out part one where we dive into using Instagram and Twitter to improve your social media presence as a land agent.

 

About the Author: Laura Barker is the Membership and Communications Specialist for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.