Top Eleven Reasons Not To Miss NLC18!

We couldn’t be more excited for the 2018 National Land Conference! It’s an amazing time of year when the best of the best in land real estate come together to share knowledge, network, and have a ton of fun together. Since we did the Top Ten Reasons to Attend the 2017 National Land Conference last year, this year we are counting down the Top Eleven Reasons to Attend the NLC18 on March 12-14 in Nashville, TN.

  1. Nashville, TN – The Music City!

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

  1. The Variety of the Sessions — FIVE Breakout Sessions!

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

  1. Our Partners

Drop by the exhibit hall to meet some of our partners and explore the variety of services and products they have to offer. NLC18 wouldn’t be possible without partners like United Country Real Estate, The Land Report, Keller Williams Realty, Land Broker Co-op, and so many more!

  1. The Cowboy Auction: Pony Up!

Bid on hunting trips, autographed memorabilia, vacation packages, and more! We’ll have a more detailed list of items to bid on as the event draws closer. This lively event raises money for the LANDU Education Program through the Land Education Foundation (LEF). Last year United Country helped RLI raise a record amount of funds at this event. Help us break that record in 2018! Place your bids on exclusive items like hunting trips, handmade items, vacation packages and more!

  1. Amazing Expert Speakers

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

  1. Have Your Voice Heard

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

  1. The Land Tech Accelerator Program

This new addition to the conference is a look into the future of land real estate. The 2018 New Technology Partners will showcase the latest technologies for land real estate and showcase how they can improve your business. Hear from our winners, Terva, LandHub.com, and REALSTACK, about their new technologies available to the industry!

  1. Pre-Conference Tour of Jack Daniel’s Distillery | Update: SOLD OUT!

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

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

It’s back by popular demand! This fan favorite event is a live Haves & Wants session where you can showcase your client’s property to over 250 other brokers/agents and their clients. It is the largest opportunity to market and buy land in the industry, so don’t miss out on this amazing business opportunity to make deals. We already have $200M worth of land being presented, don’t miss this two-hour property marketing session at NLC18.

  1. The Chance to Network

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

  1. The 2018 RLI APEX Awards

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

Top Tips For Land Agents to Beat Holiday Stress

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

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

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

1. Focus on your target audience.

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

2. Budget

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

3. Take Control of Your Time

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

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

4. Sleep

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

5. Limit Time on Tech.

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

6. Eat Well.

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

7. Remember What It’s All For.

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

8. Cut yourself some slack.

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

 

wind energy

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Is Virtual Reality in the Future for Land Real Estate?

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

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

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

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

UPSIDES

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

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

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

DOWNSIDES

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

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

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

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

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

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

raw land

How Raw Land Investments Can Equal Retirement Income

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

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

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

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

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

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

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

 

Top Land Real Estate Blogs to Follow in 2018

Following land real estate blogs is one of the easiest ways to keep your land and business ahead of the game. The only hard part? Finding blogs with credible sources, useful information, and content that’s up-to-date with the latest real estate news. To help you get the best information for your land, we’ve rounded up some of our favorite land real estate blogs (we left out the RLI blog, since you’re already lucky enough to know about it if you’re reading this post!). In no particular order, here are our top land real estate blogs to follow in 2018:

1. Whitetail Properties blog, The Hunting Blog

Whitetail blog

 

 

This is the go-to blog for anything to do with hunting properties. Need advice about buying or selling hunting land? They’ve got that. Want to learn about the best spots to harvest big game? They’ve got that, too. If you own a hunting property or just love hunting, you have to be following this blog!

2. National Land Realty blog

National Land Realty blog

 

The clean layout of the National Land Realty blog makes it easy to find the articles you want. You can choose from categories like Investing, Ownership, Cabin & Home, and Hunting & Fishing. Our favorite category? Industry News, which will keep you updated on the latest technology and news you need to know. Many of the posts are from their agents, ensuring the authors have hands-on experience in the field.

3. LandThink blog

Land Think Blog

 

Want to make more money with your property? Then this blog is for you. These no-nonsense articles let you know exactly what steps you need to take to get the most out of your property. The “A Land Buyer’s Checklist” series lays out exactly what you need in order to increase a property’s value.

4. Land.com blog

Land.com

 

What’s great about this blog is the wide variety of topics they cover. While the Buying Land and Selling Land sections seem pretty straightforward, the articles in the other sections cover every topic under the sun, ranging from quail sustainability to prepping your home for a natural disaster to fly-fishing. Written by land real estate and ranch experts, you know you’re getting the best information.

5. Landhub.com

Land Hub Blog

 

This blog takes a look at the long-term effects of owning land real estate with articles like “Could Buying Land Be An Investment In Your Child’s Future?” and “What Kind of Damage Can Terminates Do To A Home?”. Be sure to follow this blog if you’re in the real estate game for the long haul. This blog is also chock-full of how-to material for everything from thinning timber to how to sell to Millennials. While this blog’s layout is a little different than the other blogs on this list, it has great information if you are willing to dig around a bit

6. Land Blog… Get The Dirt!

Land Blog

 

 

Did you read our 2017 round up of blogs to watch? You might notice this blog was featured in there as well! This blog is great for people who don’t want to be bombarded with articles. It gives you monthly articles about the nuts and bolts of being successful in the world of real estate. Kent Morris is an ALC (Accredited Land Consultant), so you know you can trust his advice.

7. Harvest Returns blog

Harvest Returns blog

 

Interested in investing in agriculture, but not sure where to begin? This blog breaks down the basics for you and follows the trends of investments and returns. You’ll get a crash course in investing from following this blog and learn all sorts of useful information. For example, did you know that US Farmland investments have a higher annual return than gold? The articles about the latest land laws and regulations are also important to read. They cut through the political jargon to get to the heart of the matter; how the new laws are going to affect you.

 

 

investment

Yes, You Should Invest in Land Real Estate

“I have always liked real estate; farmland, pastureland, timberland and city property. I have had experience with all of them. I guess I just naturally like ‘the good Earth,’ the foundation of all our wealth.” — Jesse Jones, entrepreneur

Real estate investors and buyers alike have always had an affinity for land. There is just something about land that draws in savvy investors. Whether it’s the innate, territorial tendencies we have deep within or the simple magnetism of connecting with nature in a world increasingly becoming cluttered with high rises and highways, our instincts are doing what they do best, pointing us in the right direction!

Whether its amber waves of grain or purple mountain majesties, land continues to prove be one of the most profitable long-term investments from sea to shining sea. The USDA’s 2017 Land Values Summary released in August shows that from 2010-2016 average farm real estate values have cumulatively increased 43 percent or an average of 6.1 percent annually and average cropland real estate values have cumulatively increased 51 percent or an average of 7.3 percent annually—that’s quite a return on investment! It’s no wonder smart investors are flocking to invest in the land real estate market.

RLI 2017 Land Markets Survey

In fact, the 2017 REALTORS® Land Institute Land Markets Survey shows that out of all buyers in land transactions, there was a five percent increase in those who were investors in just one year from 2015 to 2016. With so many different types of land to choose from when investing and so many different ways to invest in land, the possibilities are almost endless. If you aren’t sure where to start, just keep reading.

Hopefully by now I have your attention and you are no doubt wondering “why is land real estate such a hot investment?” There are a lot variables that can be mentioned here but the simple answer is best summed up by Mark Twain as “Buy land, they’re not making it anymore.” Compared to other investments, land can be purchased relatively cheap if you find a motivated seller. Being a limited resource and non-depreciable, it’s a fairly safe asset when looking for a solid return on a long-term investment.

invest in land

For those looking to invest in land real estate to diversify their portfolio, buy a property to retire on, or just get in on the action, there are a lot of great resources out there. Just keep in mind that when investing in land real estate, it is crucial to consult a professional with the experience and knowledge necessary to conduct these kinds of transactions. Land is a whole different animal than residential or commercial real estate and there are agents out there who dedicate themselves to being experts in this field. The REALTORS® Land Institute offers investors an easy to use search tool to find a qualified local agent called Find A Land Consultant, check it out and get started!

Jessa Friedrich, MBA, Marketing ManagerAbout the author: Jessa Friedrich, MBA, is the Marketing Manager for the REALTORS® Land Institute. Jessa has a Bachelor of Science with a dual major in Business Administration and Marketing as well as her MBA specializing in Marketing. She has been with RLI since March 2015 leading their marketing efforts.

 

Note: Information in this article should not be construed as recommendations for any course of legal, financial, or accounting action.

young professional

Young Professionals: Earning The Elite ALC Designation

Starting out as a young agent in the land real estate business is usually an intimidating challenge. When I obtained my real estate license five years ago, I started researching ways to gain knowledge and experience in land sales. I quickly found there are plenty of places to learn about the real estate business in general but very few opportunities to learn specifically about the land aspect of real estate. I found the REALTORS® Land Institute (RLI) and learned about their Accredited Land Consultant (ALC) Designation. I soon figured out this was an organization I needed to be a part of and the ALC was a designation I sought to obtain. Having the ALC Designation is an honor for anyone and it can really set you apart from your competition.

“Receiving my ALC Designation took my career as a land broker to a whole other level!”

Here is why…

  • Education: The knowledge I gathered from taking LANDU courses offered through RLI helped me greatly. The course content is second to none and the instructors offer “real life” situations where you can put this knowledge to work in the field. The lessons you learn and the people you meet can help you many times over and many years down the road.
  • Networking: Networking with other RLI members and ALCs has led to several opportunities in my real estate career. I have had numerous referrals and joint listings that I can directly tie back to the connections I made at either State RLI Events or at the National Land Conference. I believe meeting another agent at one of these events and getting to know them better on a personal level makes it much easier to be able to put a deal together with them down the road.
  • Credibility: Being an ALC sets you apart from the rest of the “pack” of real estate agents. It gives you credibility when talking with clients and prospective clients. For instance, where I work in Alabama there are over 26,0000 real estate licensees and brokers and of those real estate licensees only 19 are ALCs. This gives a young agent who holds their ALC a real advantage over most of the real estate agents in our state. In 2015, I got the chance to interview with a prominent family for a listing on a ±380 acre timberland listing in Central Alabama. While in the interview, they asked what made me different from the rest of the agents that they had spoken with. I explained to them that I had recently received my ALC Designation and that the work and education that it took to get there gave me the specialized expertise needed to conduct their transaction. A few days went by and they called me and told me I had the listing. Since then, I sold that tract, along with several other properties for the family, and helped with a couple of consulting and appraisal jobs.

“I honestly believe the ALC Designation helped me land what could very well be a career-long client.”

I owe much of my success in my real estate career to the education, networking, and credibility I received through RLI while obtaining my ALC. I truly believe that ALCs are the “Best of the Best” in the land business and the ALC Designation is something that everyone in the business should work towards.

About the author: Calvin Perryman, ALC, is an Associate Broker and Appraiser with Great Southern Land. Calvin is an active member of RLI, serving on the 2017 Future Leaders Committee. He graduated from Auburn University with a Bachelors Degree in Agricultural Business and Economics in May of 2011. Shortly after graduating from Auburn he obtained his real estate license and has been in the real estate business since 2011.

land real estate

Uncovering Motivations to Buy or Sell Land Real Estate

“I want to sell, but I don’t need the money.” This is a common refrain uttered by people who are contemplating the sale of a piece of real estate. If they do not need the money, then why are they selling? Finding the “Why”, the “What”, the “When”, the “Who” is an essential part of making a real estate deal come together.

Several years ago I helped some seller clients sell about 800 acres of beautiful hardwood and pine timberland that had been in the same family for over 70 years. There were simultaneous offers to purchase the land, one came from a hardwood timber company and the other from a small group of land investors. My clients looked at both offers, and immediately rejected the one that had “timber” in the name of their organization. One of the family members told me, “These other people may cut the timber also, but at least it isn’t in my face.” I believe the timber company would have ultimately paid a higher price than the investors did, but the sellers preferred to deal with individuals instead of the timber company. Their motivation was not only money, but also seeing that the land ended up in good hands.

Here are a few considerations regarding motivation that I have seen influence the decision of buyers and sellers.

  1. Past Experiences- Past experiences, positive or negative, can play a significant role in the outcome of a real estate deal. I have seen sellers refuse to sell to an adjoining land owner because of some long-running family feud. I have seen buyers refuse to make an offer on a listed property because they had a bad experience with the listing agent in the past. Those little details can mean all the difference between getting your deal done or not. 
  1. Time is of the Essence- Timing can be the most crucial part of a real estate transaction. A buyer may need to identify and make an offer on a replacement property because they are doing a 1031 exchange. On day 45 of their identification period, a buyer may be extremely motivated to try to work something out to avoid paying 15% to 20% in capital gains tax. Sellers may be faced with an immediate expense for a home repair or the loss of a job. If you wait a month to make a decision, they may find alternate sources of funding, and no longer be highly motivated to sale. I learned a long time ago, “The time to business is when someone is ready to do business.” The whole world can change for someone in a day, so don’t miss out on an opportunity because you dragged your feet. 
  1. Fear of Missing Out (FOMO)- If you’ve ever seen the look in a buyer’s eye when they missed out on a property they really wanted, you know what I am talking about. They missed one, but By George, they will not let that happen again. In 2015, I watched a professional athlete miss out on buying a property that would have been an ideal tract for him. Instead of paying the asking price and buying a tract he would have enjoyed for decades, he tried to make a lower offer and he missed out on the deal. He was trying to save about $150/acre and did not offer full-price. Another buyer came in one hour after the ball player made his offer, he offered full price, and bought the property. Two years later, the athlete found another property, across the river from the tract I sold, for about $750/acre MORE than the one he had the opportunity to buy before. He overpaid for a property of lesser quality because he did not want to miss out again. 
  1. Feel Goods- Emotions play a big part in many real estate deals. About 2/3 of the properties I sell are related to estate transition, and these farms and land have often been owned by the same family for generations. When it comes time to sell a property, they want to know that it is going to be to someone who will be a good steward of the property that their family has enjoyed for so long. I saw this exact thing happen several years ago when a family hired me to help them sell a property to a board member of The Nature Conservancy. They were convinced that this beautiful hardwood property along a pristine river would be protected in perpetuity if they sold to this type of buyer. Often, older farmers will offer owner financing or will sell at a reduced rate to help a younger farmer get started on their land.

Finding the motivations to buy or sell land real estate from the individuals in your real estate transaction will go a long way to helping you get your deal closed. It is important to ask questions of your customers and clients that will give you the answers you need to find out what really matters to them. Money is not the only motivation for many buyers or sellers, and I have seen a seller be offended by a buyer “showing off” with how much money he has. Your odds of a successful real estate transaction increase when the parties are able to each get what they want, and sometimes it takes more than just money to make the deal come together.

Jonathan Goode, ALCAbout the Author: Jonathan Goode is an Accredited Land Consultant (ALC) with Southeastern Land Groupand is a licensed real estate broker in Alabama and Mississippi. Jonathan is also a co-host of the weekly radio program, The Land Showand loves to serve people buying and selling land.

residential land sales new home construction

The Evolution of Residential Land Sales in the Northeast

Northeast land values and trends in residential land sales: What has happened and can we see the future? I have been a practicing REALTOR® for thirty-eight years. I started selling real estate while in college and never looked back. My primary market is thirty-five miles west of Boston. The state of Massachusetts is really divided into these parts: Route 128 and inside, Route 495, both sides, to Route 128 and Worcester east to 495; and, then, Western Massachusetts. Massachusetts has a myriad of permits and land use regulations which are some of the most restrictive in the country, in my opinion.

As a young REALTOR® starting out, I did all types of land sales. My marketplace was dotted with family farms. Most of these, as a teenager, I would hunt, fish, and drink beer on (of course with land owner approval, or one of their sons / daughters in tow). When asked to write this, I thought of what story would be best to tell. The approach I’m taking will, hopefully, be applicable across into your marketplace.

In the late 1970s and the early 1980s, land could be bought for forty-five dollars per lot as an Approval Not Required Under Subdivision Control (ANR) lot. An “ANR lot” means that the lot complies with the dimensional requirements for public way frontage and the required minimum lot size. For backland, you could buy a forty-acre piece in the “raw” for ten thousand dollars per lot. Once under contract, you could begin the necessary permitting. The rule of thumb in practice at that time was that twenty percent of the land tract had to be given up to regulatory prescription; in this case, eliminating eight acres.

residential land real estateAt that time, my thoughts were that the entire regulatory morass was put on the landowner to the community’s benefit. Alas, to this day, I still feel the same. New homes were being built for fifty dollars per square foot, the lot included. A finished two-thousand square foot colonial was one hundred thousand dollars, or thereabouts. During the early 1980s, we had an escalating economy and prices on homes and land were rising dramatically. The state of Massachusetts started buying the developmental rights to family farms and paying them not to build, but to continue to farm. In Northborough, two of the biggest farms on the highest point in town, overlooking the new 1974 I-290 highway, were bought. Over five-hundred acres were kept from development and, until this day, serve as a reminder of why some regulations are necessary.

In addition, a certain amount of lots were allowed to be kept for family members in the future. Now, the third and fourth generations of farmers have their homes here and a vibrant farm business has grown, and keeps growing. In 1987, Massachusetts had a banner year selling farms at a price of forty-thousand dollars per lot in the raw while an ANR lot ran about seventy-five thousand dollars each. Then, we had a market adjustment and the local economy all across the Northeast was hit with a slowdown. It was during this time of slow, or no, growth that the regulations were revamped and revised to “protect” the environment and the school district. Zoning referendums were created and placed from community to community, as each town had different and more onerous restrictions in place. From aquifer laws, contiguous uplands, and open space as a minimum fifty percent, to revisions of soil standards, increasing sizes of subdivision roads, and increased setbacks. All of these regulations put a severe crimp on land values.

Despite tremendous efforts by landowners, builders, and REALTORS®, these regulations are now a way of life, to this day, in all our urban areas. When the “powers that be” implement new zoning, it has a tremendous effect on land values. In the mid-1990s, another piece was passed known as The Rivers Bill. This bill precluded development within two hundred feet of any listed stream and tributary in the Commonwealth of Massachusetts. Some of those listed were two feet wide at maximum and the only relief was if it dried up for three or more consecutive days so could you film it.

Now, we have arrived in the late 1990s. With ANR lots at $110 per lot and raw land at sixty thousand dollars per lot, finished two thousand square foot homes are sold from $350 to $375 thousand (or around $175 per square foot) all in, inclusive of land. The builders then decided that in order to make money and increase their corporate financing, they would build bigger homes. Starting in late 1999, prices rose and house sizes were 2,800 to 3,200 square feet. Around this time, I did a seventy-lot former gravel pit, where pricing ran from $399 thousand for a 2,700 square foot colonial to $475 thousand for a 3,400 square foot colonial.  Now, twenty years later, those resales sell for $680 to $800 thousand with no new lots in sight. In my primary area, we have reached build out. There are no longer any fifty to one hundred lot subdivisions, only five to ten lot ones are available from the I-495 area eastward to the sea line of Boston.

New home construction residential land salesIn addition, for the last ten years, builders have taken advantage of a law in Massachusetts called Chapter 40B. This law was created in 1969 to increase affordable housing throughout the Commonwealth. However, it did not get any traction until 2005 or so. This law allowed for an increased maximum density for apartments, as long as twenty-five percent of the units were for people who meet the affordable income limits as defined by the State of Massachusetts. Thousands and thousands of apartments have sprinkled the highways and byways, as this law allows you to bypass local planning boards and apply directly to the State.

While many benefits are apparent, the adverse impact comes on the older two to four family units as they have to compete with sleek new more modern apartments offering dry cleaning services, gyms, pools, and all the other upscale benefits. Demographics within these units are primarily young urban singles or couples, with older divorcees, and a transient population waiting for newer homes in the Central Massachusetts market. Many are buying duplex halves and, now, the communities are putting moratoriums in place as more and more of these units are built. These two thousand square foot duplex halves are selling in the mid to high four hundreds.

However, no one realizes, except the REALTORS®, how the marketplace has changed. The millennials prefer new construction. Most don’t want to have to change storm windows or paint their new homes. They just want to live in a new home with little or no exterior maintenance so they may enjoy their free time. Yet these communities who have implemented moratoriums are crimping their ability to buy new, and restricting the value of the land owners’ equity. You can still buy an ANR lot in western Massachusetts under one hundred thousand dollars, but the access to corporate headquarters and city services is a day trip away.

As for the rest of the Northeast, in every major urban area within thirty-five miles of an airport or big city, land prices and residential land sales tell the same story. Land prices are escalating higher and higher to the point of spiraling out of control. Installing new roads are costing a thousand dollars per linear foot. Remember the seventy lots in Northborough neighborhood? Well, I just sold the eighty-one year old owners last remaining four acres for one million dollars and the builder is getting five ANR lots. Homes of three thousand square feet will start at $750 thousand and we expect them to all sell upon release.

What a difference three decades make. When I attend the RLI meetings I hear similar stories from across the country and realize the truth in the phrase that “The Land Is Under All,” and it’s our duty to protect private property rights. By virtue of our profession, the duty falls on all REALTORS® to fight restrictive zoning and ensure that our elders can retire with the equity they expect and deserve. All of us in the business of buying and selling real estate have an obligation to participate in the public process for new zoning. We have an obligation to be cognizant of all underlying land use and we must defend and protect the ability to adapt our land use to meet the new requirements of the marketplace and the next generation.

For more information on land value trends and residential land sales, check out RLI’s annual Land Markets Survey. Read more on the demand for land and the increase in demand for residential land real estate.

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

About the author: Michael L Durkin, ALC, CBR, has been recognized as one of the Top REALTORS® in the country by many of the major companies: Top 300 Coldwell Banker; Top 10 GMAC Real Estate; and Top 80 RE/MAX.  He has twenty-five years’ experience in his office and is an author and former radio host for WTAG. He has served on the NAR Land Use and Property Rights Committee for a total of ten years.