Make More Money Off Of Your Timberland

Timber prices are at a record high. The tragic wildfires of last summer and trade disputes as well as an increase in demand for new residential housing have all caused the price of timber to skyrocket. With low supply and high demand, timberland owners are sitting on a potential gold mine. To make the most off of the high prices, you’ll need to tread carefully. Here’s how to make the most out of the booming market.

Check The Timber Mills

Is your local log mill looking for a particular kind of log? Many mills are willing to pay extra for logs that meet their specific standards and may dock your pay if they do not. Some mills even pay less for logs that are larger than usual. This means you are getting less money for more timber! Scope out the pricing of your local mills to find out where your tress will make the most money.

Long-Term Gain

Patience is the name of the game when it comes to timberland. Prepare to lose money for the first few years because you will need to spend money planting and taking care of the trees. Since timber doesn’t provide immediate returns, many people might be hesitant to invest.

However, timber has historically produced strong long-term returns. Many financial websites, such as CNN Money and Investopedia, recommend investing in timber as a way to diversify your portfolio. The returns tend to move countercyclically to other markets, providing your portfolio with a safety net. Not only is investing in timber a smart financial move, it is a good investment in your land. Timber is a hearty, relatively low maintenance tree that will produce steady returns for years.

To Cut Or Not To Cut?

When you cut your trees doesn’t only impact your current crop, it will also determine the growth and health of the next generation of trees. With prices at a record high, it can be tempting to cut down your trees as soon as they mature. Try to plan harvests around times that would benefit the saplings as well as when your timber is at its highest value.

Best Practices

Taking care of your timber now will result in high-value trees down the road. Regular thinnings, regeneration harvests, and timber stand improvements (the culling of undesirable trees and saplings) are all practices that result in healthier (a.k.a. more valuable) trees. Healthy trees mean healthy saplings and a whole new generation of high-value trees. It’s a never-ending cycle of profit!

Sky-high prices and an increasing demand have created a modern day gold rush. Although it can be tempting to chop down all your trees and cash in on the craze, long-term planning is the best option for you to make the most money off of your timber.
To learn more about timber, be sure to check out the newly updated LANDU course Timberland Real Estate on August 1st being hosted by the RLI Alabama Chapter.

This article was originally posted to the National Land Realty blog.

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.

The Great Grazing Debate

What’s the first thing that pops into your head when you hear the word ‘holistic’? Daily meditation? An all-kale diet? Yoga retreats that cost more than most houses? For some people, it’s holistic planned grazing (also called HPG), a system that supposedly increases the health of your land. Like anything that has a lot of supporters, it also has doubters. So, is this method going to save our lands? Today, let’s explore holistic planned grazing and if it is right for your land.

Holistic planned grazing caught the attention of the land community after a 2013 Ted Talk by Allan Savory, a Zimbabwean ecologist and farmer. He claimed that, contrary to popular opinion, reducing the number of animals on the land actually made the land condition worse. He concluded that the natural grazing patterns of animals is actually better for land.

Savory’s TedTalk, which currently has over four million views, sparked a debate in the land community. Some blogs, such as GrainNews, are singing the praises of HPG. Others, like the Sierra Club, are more suspicious of this new method.

So, what exactly is this practice that is causing so much controversy? Simply put, holistic planned grazing is a pattern of grazing that mimics how wild herds would have grazed on the land before it was cultivated. In theory, this practice will help the land return to a more natural state. HPG will be different for every landowner based off of their amount of livestock, type of land, soil type, and your overarching goals for improving the land.

Holistic planned grazing isn’t just letting your cattle out into the fields and hoping for the best. In fact, it requires quite a bit of planning and tracking. Timing is key when it comes to holistic planned grazing. Have your livestock stay in a pasture for too long and you run the risk of overgrazing. Too short a stay and the land will not reap the full benefits.

Many farmers who have tried this method have reported positive results. In one study, organic dairy farmer Dharma Lee tracked the health of their land over three years. Here is what they noticed:

  • A 120% increase in the number of grazing days per year, from 76 days to 167 days per year, which translated into an annual savings of $27,300 for them.
  •  A drop in feed cost from 60% to 48% of the total cost of production.
  • Improved profitability, with a gross margin of 41%.
  •  Increased carrying capacity of the land, with a 68% increase in grass harvested by cattle on the pasture.
  • A significant improvement in livestock health, with a key indicator – mastitis – dropping from 73% to 3% within the herd.

You can read the full study here. Other landowners have reported similar results in their land.

“Holistic management is a method of managing livestock in rapid rotation to increase greater production, sustainably, and profitably,” says Jennifer Sandy, a cattle rancher.

As we mentioned earlier though, not everyone is a fan of holistic planned grazing. American ecologist Dr. John Carter believes that HPG relies too heavily on personal anecdotes and not enough on science. He also points out that the study ignores the negative effects of intense trampling on a land’s water storage and plant productivity.

So, is Holistic planned grazing right for your land? That depends on a number of factors:

  • Are you trying to improve the health of your land?
  • Do you have the time/resources to plan and carry out moving your cattle?
  • Can your land recover if your livestock occasionally over or under graze an area?
  • Do you want your landscape to mimic its original growing patterns?
  • Do you have enough livestock to cover the land? And if not, does it make financial sense to invest in more livestock?

If you answered yes to all of these questions, HPG might be great for your land. Be sure to watch the original TedTalk, see what other landowners have to say, and work with a land expert in your area before making your final choice. Since it is a newer method, only time will tell if holistic planned grazing is the future of land or just a passing trend.

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.

Top Crops for 2018 and How To Make More Profit On Them

Crops can be profitable for a variety of reasons. Some are staples of day-to-day life, some flourish in specific climates, and some are popular because they are trendy (think superfoods like kale and avocados). Today, we’re going to take a look at what makes these five top crops so successful and how you can make even more money off of them.

When choosing our top crops, we’ve factored in three key things:

  1. Profitability (of course!)
  2. Demand (both historic and recent)
  3.  Value (current and predicted)

Of course, some of these crops might not be right for your specific land and the current tariff war has temporarily lowered the value of some of the crops on this list. But we think these five crops are excellent investments in the long term.

Corn

What Makes It A Top Crop: Corn is in everything! It’s used in animal feed, plastic, penicillin, sugar substitutes, whisky, ethanol, and so much more! While the demand may fluctuate, there will always be a need for corn.

How To Make More Money: At the Illinois Soybean Association event, successful corn farmer Randy Dowdy shared his secrets to success, saying “The difference between a good farmer and a great farmer is timing and attention to detail.” Dowdy kept a close eye on his expenses to see what his return for investment was, and was able to determine from that what he could cut back on.

Dowdy is also a huge fan of minerals. “You want 300-bushel-per-acre corn? If it takes a certain amount of nitrogen, a certain amount of phosphorous, and a certain amount of potash to make a bushel of corn, my question is, how much magnesium, molybdenum, copper, iron, sulfur, calcium, manganese, phosphorous, potash, boron and zinc does it take to make a bushel of corn? Yields are based on limiting factors,” Dowdy said. If all this sounds close to a foreign language to you, it’s a perfect example of why it is so important to find a qualified expert to help with your land transaction. You’ll need to consider everything from ROI to soil type when determining if this is the right crop for your prop.

Pork

What Makes It A Top Crop: Technically, pigs aren’t exactly crops, but they are still in high demand. A strong demand and high prices make pork a great “crop”.

How To Make More Money: Make your own feed. Feeding pigs can be a huge money drain.  Here is a great recipe for making your own pig feed.

Raising the most in-demand pigs ensures you can get higher prices for the same amount of meat. Some popular ones are the American Yorkshire Pig, Berkshire pigs, and Durco pigs. We have lots of other helpful tips in our recent article on how the Pork Industry Brings Home the Bacon.

Sorghum

What Makes It A Top Crop: The USDA predicts that sorghum will return $74 per acre for the 2018-2019 year. While this is a lower return than some of the other plants on this list, in many high-altitude areas, hearty sorghum can be more profitable than corn. Other countries like China buy tons of sorghum as a cheap feed source or to make alcohol.

How To Make More Money: Don’t invest all your money in sorghum just yet. Recently, China imposed a 179% tariff on sorghum. Previously, sorghum was the number one import from China. While this crop has hit a rough spot internationally, it still has a ton of potential. We suggest waiting until the tariff war dies down though before growing this crop.

Soybeans

What Makes It A Top Crop: Even in the face of a tariff war, America is the leading soybean producer and exporter in the whole world. Similar to corn, soybean has a lot of uses, such as animal feed, cooking oil, biodiesel fuel, and more. Plus, as consumers become more health conscious, it is also often a great way to get plant-based protein.

How to Make More Money: Similar to sorghum, we wouldn’t recommend buying soybeans right now. In the future, check out the tips from Dan Arkels, winner of the 2014 Illinois Soybean Association yield contest, from his article on agriculture.com:

  1. Get the right soil. Arkles recommends soil that holds water well and has excellent drainage. “My soils are black, tight, and deep Muscatine-Sable type of soils,” said Arkles.
  2. Plant early. Early planting allows soybeans have an increased flowering period. “A soybean plant is light-sensitive, and it will flower as late as the season allows,” he says.
  3. Weed management. Did you know that around fifty percent of waterhemp seeds are viable nine days after flowering? Removing waterhemp plants before the harvest prevents future waterhemp.

Marijuana

What Makes It A Top Crop: While still illegal in some states, marijuana is medically legal in 30 states and recreationally in nine. Its new legality makes it an incredibly trendy crop.  It’s currently the fastest growing crop in America. Hemp, marijuana’s non-psychoactive cousin, is still illegal, but there is a huge push to legalize it in Congress.

How To Make More Money: This one is tricky. Since legal marijuana is not federally legal, you want to make sure to work within the law. One way to make more money is knowing all the products that can come from this plant. It has uses in medicine, helping veterans suffering from PTSD, beauty products, and many other uses.

Even the best crops can have slumps. However, we hope this list got you thinking about ways to make more money off of your crops or even new ways that you can make sure you’re getting the highest and best use out of your property. If you’re thinking of purchasing land to grow one of these Top Crops, make sure to Find A Land Consultant near you. Purchasing and managing land real estate requires specialized expertise!

 

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.

Investing in Land 101

“Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” — Andrew Carnegie, billionaire industrialist

When it comes to investing, land has always been a solid choice. Many finance experts agree that investing in land is an excellent way to diversify your portfolio. There are also plenty of famous billionaires who have made their fortune in land. Today, we’re going to break down the basics of investing in land real estate.

Investing in Land vs Investing in Stocks

Before we look into investing in land, it’s important to know how it is different than investing in stocks. When you buy a stock, you own a tiny piece of that company. When the company profits, you profit. When you buy land, you choose exactly what you want to do with that land. You can transition it to another land type, lease it out, or just hold onto it and wait for the value to increase (we’ll get more into these investing methods later in the article). You have a lot more control when investing in land.

Investing In Land

There are many different ways to invest in land real estate, but today we’re going to look at the top three most popular with land experts.

1: You can hold onto the land until the market is great and you can sell it for a profit (also called the buy and hold method). Since it relies heavily on the market, this is usually the slowest way to make a profit. However, if you buy a quality piece of land during a market dip, you can sell it at a profit when the market is strong. Buy low, sell high!

2: You can invest to transition the land to its highest and best use. Transitional land is a booming market. This method will cost more, but if you find the perfect use for your land, you can make serious money off of your transitional land.

3: You can lease the land out to farmers or hunters. This requires more work but can get you a steadier profit. You’ll definitely want to work with a land expert like an Accredited Land Consultant (ALC) on the contracts to make sure you are getting maximum profits on each lease.

Benefits of Investing in Land

There are many benefits to investing in land real estate. Here are just a few.

  • Diversify Your Portfolio. Land is an excellent way to give your other investments a safety net. If you invested all your money in stocks, and the stock market drops, you run the risk of losing most of your savings. Investing in land gives you safety even when other markets are down. Over the last twenty-five years, farmland has produced 5 percent annual return on average. Cha-ching!
  • Limited resource. Ever wonder why people pay thousands of dollars for tiny apartments in San Francisco and New York? It’s because land is a limited resource, and desirable land will always be in demand. As Mark Twain once famously said, “Buy land, they’re not making it anymore.”
  • Low effort. One thing many people love about investing in land is that it usually requires minimal effort, especially if you are using the buy and hold method. This is a huge benefit for farmers and land real estate agents who have very little free time.

Drawbacks

Even though there are a ton of benefits to investing in land real estate, there are some factors you need to be aware of. Even though we think investing in land is an excellent idea, our goal is for you to make the best educated choice for you and your land.

  • Taxes can be tricky. States and counties have different laws for taxing investment land. Here’s a great guide to understanding exactly how much you should be paying in taxes for different types of land.
  • Previous uses. Previous land uses can impact the land’s value and what you can use the land for. For example, some land uses can result in environmental hazards that will cause the land value to plummet. Sometimes, it can be difficult to track down the previous land uses, especially if the land has had many owners. Luckily, if you are having trouble finding the previous uses, you can always use this Google Earth hack to see the land’s history!
  • Patience. Depending on your method of investing, you won’t see returns for anywhere from six months to many years. You should only invest money into land that you won’t need in the next few years. No one likes the waiting game, but good things take time!

Investing in land is a great way to build wealth and save up for retirement. Be sure to consult with a professional and know the hottest land markets to invest in before making any big decisions with your savings.

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.

Five Questions To Help You Find the Perfect Plot For Your New House

If you think finding the perfect house is hard, try finding the perfect land for that house. Finding a property that is in your budget, near your place of work, has passed all the necessary tests, is zoned for the type of house you want to build, and is not cluttered with restrictions can drain a person. We’ve created a checklist of questions to ask to make sure you get the perfect plot to build your dream house on.

1. Is The Lot Buildable?

You’d be surprised how many people don’t ask this question. It’s easy to assume that if vacant land is being sold in a residential area, it is automatically buildable, but that’s not true. Be sure to run a soil test to make sure the (especially recommended if your lot is located near gas stations, body shops, or anything where toxic liquids might be present). Read through all the paperwork that comes with the land to make sure there are no hidden non-building clauses.

2. Are The Other Houses In The Area Within My Building Budget?

If you want to build a $3 million home in a neighborhood of $1 million homes, you are going to run into serious trouble. Building houses with values different than the neighbors can throw the local land values out of whack.

In an article in U.S. News, Neville Graham, a real estate agent with Partners Trust, recalls a client having her construction loan denied because the $2.2 million building and land cost was far more than the average $1.5 million houses in the neighborhood. The client had just finalized buying the land, but now can’t do what they hoped with it. That’s a true land horror story!

3. What Utilities Do I Have Access To?

Different properties have different rules about what utilities you have access to. This includes:

  • Water
  • Power
  • Wi-Fi
  • Gas
  • Waste

There’s nothing worse than someone who buys their dream property, but finds out too late that they don’t have legal access to necessities like water and power.

4. What Are The Zoning Restrictions? / Is This Neighborhood Under Consideration For Re-Zoning?

Local governments establish zoning ordinances to regulate land use and determine school districts. If zoning regulations are changed, they can drastically change what you can build on your land. Zoning restrictions are also important for families wanting to get their children into the best local public schools. Keep a close eye on the local news and government to get a sense of changing zoning laws.

5. Is The Property Close to X?

Location, location, location! We went in-depth into this popular saying in our previous residential real estate article, but it’s so important we had to add it to this list as well. X stands for whatever matters most to have near you. For some people, it’s their place of work. For others, it’s schools for their children. Nature lovers often put gorgeous views above all else, while culture vultures will prioritize being near great restaurants, theatres, and museums. It all depends on what is most important to you.

While finding the perfect property is difficult, knowing which questions to ask will make the whole process a lot smoother. Another way to make the land search easier is by working with an Accredited Land Consultant (). ALCs know everything there is to know about land, and you can use the Find A Land Consultant tool to find one in your area.

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.

Summer Agritourism: How To Make Extra Money Off Your Land

Agritourism — The word sounds like a trendy food you might find at a health food store between acai and kombucha. What agritourism actually is is an activity that brings customers to your land. While this concept might sound confusing, you may already have agritourism happening on your land today. Do you rent your land out for fruit picking, hunting, camping, or fishing? Congratulations, you’re already an Agritourism pro!

Summer is a perfect time for dipping your toes into agritourism. Here are some ways to use agritourism to bring in some extra money this summer.

Horseback Riding

If you have a lifelong love of horses, sharing it with others might be a great way to bring in some extra cash this summer. Renting out horses for trail rides, teaching lessons, or boarding horses on your land are all lucrative options.

While horses can be a huge draw, they can be expensive if you don’t already have most of the equipment. You’ll need:

  • Horses (of course!). Depending on how many riders you are expecting, typically you should have between two to twelve horses
  • Trails or an area to ride the horses in
  • Hay, grass, concentrates, and treats
  • A shovel and wheelbarrow for mucking
  • Saddles, blankets, helmets, and bridles
  • An unlimited water supply (did you know horses drink at least eight gallons of water a day?)
  • The time to feed, care, exercise, and groom your horses
  • Equipment for hoof maintenance (every six to eight weeks)

If you don’t have seven out of eight in that list, horses might not be the most financially-sound agritourism opportunity for you. Once the business is running, you can make extra cash by setting up a shop for visitors with branded gifts and common-sense needs for a day out (like water bottles and snacks).

Camping Land

If you have vacant land that you don’t need to keep in pristine condition, you might consider renting it out for camping. Camping is one of the most minimal-effort ways to rent out land (except for getting calls from that one person who gets lost every five seconds on their way to your property), and many are willing to pay top dollar for beautiful camping sites. You can charge extra for forest, mountain, or waterside property.

Using land for camping does come with its drawbacks. As mentioned above, you shouldn’t rent land out for camping if you need it to stay in perfect condition. Campers can leave behind lots of trash (plastic bags, old food, and even human waste!). Not only can this be bad for your land, it can attract predators like bears that you wouldn’t want near your family. Consider investing in a Porta-Potty and looking into the waste management options needed to run a campground. 

Tours

Visiting farm land has always been a popular field trip for school children, but there is also a growing interest from hip foodies who want to know how their food is raised. Giving tours of your land is a great way to teach people about farming and sell some of your crops along the way. If you sell your local grown food at a farmers market or local restaurant, those would be great places to promote that tours of the farm the food came from are available.

U-Pick

People are happy to pay extra for the experience of picking their own apples, berries, or other fresh crops. In summer, crops like corn, cucumbers, melons, and tomatoes are all in high demand.

U-Pick crops come with some surprising benefits. There are reduced labor costs, no transportation costs for the U-Pick crops, and entry fees ensure income even if people don’t pick anything.

If you are willing to work weekends and don’t mind the extra clean-up from people on your land, U-Pick could be a great way for you to make some extra cash this summer.

Vineyards

Who doesn’t love a nice, cold glass of wine during the summer? We could use a glass right about now! Wine tours are a summer staple. If you own a vineyard, consider tours, tastings, or interactive events to get wine lovers to your property. You can also pair your wines with your own cheese, fruits, or vegetables. Double the sales!

Even in the most well-planned agritourism plans, accidents happen. Tourists who aren’t used to rural life have the potential to injure themselves on your land. Because of this, you should have guests sign a waiver that protects you and your land. For a more in-depth look into the legality of agritourism, here’s a helpful PDF.

Agritourism is on the rise in America. Farming video games such as Stardew Valley are getting young and urban people interested in agriculture. A rising interest in how food is grown is also bringing more people to the farms. Hopefully, this article jump-started your creativity into thinking of how you can incorporate agritourism into your land this summer. If you are interested in purchasing a property to be used for agritourism, make sure to near you that is qualified to advise you on the transaction.

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.

wildfire

How To Protect Your Land From Wildfires

Any land expert will tell you that wildfires are an occasional occupational hazard of the job and increasingly common natural disaster encountered by landowners. Without the right protection, wildfires can be the deadliest part of working with land or owning land. Last summer, over a million acres of land and 43 lives were lost to the devastating wildfires in California. While people are still figuring out how to prevent natural disasters, there are steps you can take today to protect yourself and protect your land from a wildfire.

Take Away the Tinder

No, not the dating site. During the wildfire season, be sure to regularly sweep away fire-happy materials such as dried leaves and pine needles around your property.

Create ‘Fuel Breaks’ On Your Property

Fuel breaks, such as gravel pathways or driveways, can act as a barrier to keep fire away from your property. An easy way to add a fuel break is by replacing woodchips or dried grass that is frequently used as pathways and instead use gravel or another fire-resistant material.

Decorate With Safety in Mind

Use fireproof or fire-resistant materials whenever you can. Here is a short list of some fireproof and fire-resistant materials to consider:

  • Stone
  • Concrete
  • Treated limber plywood
  • Mineral wool
  • Potassium Silicate

These materials might not be as elegant as real wood, but they’ll help keep you safer in the face of danger.

Controlled Fires

Fire doesn’t have to be your enemy. Controlled fires are frequently used by forest management to get rid of underbrush to give budding plants more room and nutrients. Controlled fires are frequently used on properties with pine trees, as pine trees are resistant to fire.

By using controlled fires to burn away the debris, there will be less fuel for any potential wildfires to feed on. This will significantly reduce the damage to your land.

Trim Your Trees

Dead or low-hanging branches are the most venerable to wildfires. Be sure to always trim these branches, especially the trees near your house or farm. Then make sure to remove what you trim from the property.

Put Yourself First

Not to sound like your grandma, but in cases of natural disasters, you have to put your safety first. If a wildfire catches you by surprise, follow these steps after calling 911:

  • If you are trapped inside, move towards a central room away from any exterior walls that might collapse on you.
  • If you are outside, the wind is your best friend. Look where the wind is blowing. If the wind is blowing the fire away from you, run into the wind. If the wind is blowing the fire towards you, run perpendicular to the wind.
  • Get to a place that’s already burned over. The fuel has already been burned up, so the chances the fire will return are slim to none.
  • When escaping the fire, take downhill routes whenever possible. Thanks to updrafts, fire moves faster uphill.

We hope these tips will help keep you and your property safe from future wildfires. When going about your day-to-day life, remember that huge wildfires can be started by the simplest things, like leaving a campfire burning on a dry day or leaving a lit cigarette by old trees. Make Smokey the Bear proud!

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

Land – The Original American Dream

Land has always been a staple of the American dream. From the Homestead Act of 1862 to the ongoing battle for Amazon’s second headquarters, Americans have held the desire to own and prosper from their own land close to their hearts. While owning private property today is different in many ways than land ownership in the 1800s, many of the same benefits still remain. Owning private property comes with a lot of hidden benefits that are good for you now and for years to come.

Before we dive into the benefits of private land ownership, let’s distinguish what exactly separates private property from public. Private property is land that is owned by individuals or corporations. The owner of a private property has the right of use, lease, and occupation over the land.

Public properties, on the other hand, are owned by public authorities. This land does not belong to any one person. That means the use and occupation of public land is decided on by committees and political groups instead of individuals. Owning private property makes it much simpler to decide what to do with the land. Let’s take a look at some other benefits of private land ownership.

Your Land, Your Choice

The most obvious (and biggest) benefit to owning private property is the freedom to do what you want with your land.  Of course, you still have to follow local and federal law, but how you use the land is largely up to you. This is a huge benefit if you’ve been eyeing some land as a potential transitional property. While sales can be extremely profitable, attempting them with public land can be difficult and can take years. Since public land doesn’t belong to one person, there will be lots of debates, meetings, and compromises over the best use of the land. There will be so many voices that yours might get lost.

Supply and Demand

Land is a limited resource. You can’t just create more land. That’s why land real estate in areas like California and New York are so expensive. There is only so much land to go around, and everyone wants some. Even when the market is bad, people will still need land to grow crops, raise livestock, and build homes.

In the current economy, you might not even be thinking about putting your private property on the market. Especially since owning property now can be seen as insurance against the next economic depression. Plus, keeping your land in good condition ensures that future generations will have a limited resource to profit on in tough times.

Long Term Increase

Historically, some investments in land have had better returns than the broad equity markets. Farmland investments averaged 10-13% total returns over the past two decades. It is also an excellent way to diversify your stock portfolio. Farmland values do not always mimic the market, so if other stocks plunge in value, you won’t lose all your money. People who invest all their money in a certain market or stock tend to risk losing it all when the market turns.

Tax Benefits of Private Property

Depending on the type of land you own, you could be entitled to certain tax benefits. For example, with vacant land, you can elect to add your expenses to your land’s cost bases. This will significantly decrease your taxable gain.

Here’s a great example of this theory in action from Inman.com:

Jean purchases a vacant lot for $10,000 in 2009. During 2009-2013 she elects to add $5,000 in carrying costs to the lot’s cost basis. In 2013, her adjusted basis in the lot is $15,000. She sells the lot for $20,000. Her taxable gain is only $5,000 ($20,000 sales price – $15,000 adjusted basis = $5,000).

Although private land ownership comes with tons of benefits, it has been on a slow decline for years. This is a result of many factors. Some people are wary of investing in land real estate after the housing crash of the early 2000s. Huge companies like Google gobbling up thousands of acres of land also doesn’t help. We hope this article inspires you to take advantage of the many benefits private land ownership has to offer. If you are interested in owning your own piece of land, make sure to Find A Land Consultant to assist with your purchase. Land transactions require the specialized expertise of an agent with education and experience in the field.

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

Pond Management: Why is My Pond Filling Up?

I hear this question all the time when it comes to pond management and it’s a good question: Why is my pond filling up? Actually, your pond is designed to fill up. I used to work for a coal mining company and we would construct sediment ponds. They were designed to collect run off from the mine site and allow the sediments to settle out of the water before discharge into a stream or creek. Recently, I was fishing in a large pond, about 20 acres in size. The pond had a concrete dam which was about 30 feet high on the exposed side. You could actually take your fishing pole and touch the bottom of the pond just about the dam. This pond had 50 years to fill up!

When creeks are running at high velocity after a rain event, the fast moving water carries soil particles in suspension. The following picture shows fast moving water in a creek channel filled with soil particles.

The faster the water velocity, the larger particle size the water can move.
As the water enters a pond or impoundment, the water velocity slows down allowing the soil particles to settle out and they simply drift to the bottom. The following picture shows a distinct difference in the water color. The water entering the pond is full of soil particles (including red clay).

This is nothing to be alarmed about… the pond is just doing it’s job. The only thing you can do when it comes to pond management to alleviate the problem is build a series of smaller ponds (detention ponds), this allows the water entering the last and largest pond to be practically free of soil particles. Enjoy your pond… and get out and fish!!

Kent Morris, ALC, is a Registered Forester and Associate Broker who has experience in fields such as timber appraisals, harvesting, thinnings, and timber sales. He writes articles about these fields and more in his blog Land Blog…Get The Dirt!

How To Start Your Own Vineyard

Who hasn’t secretly (or not so secretly) dreamed of opening their own vineyard? The idea of walking through rows and rows of plump purple grapes sounds heavenly. Plus, all the free wine you can drink! Pour yourself a glass of merlot or chardonnay and let’s learn all about starting your own vineyard.

What Do You Want Out Of The Vineyard?

Before you start looking into grapes, ask yourself what you want out of the land. Would your vineyard be more for personal use, or would you like to make enough wine to sell to local stores and restaurants? Do you want to just grow grapes or produce your own wine on site? These questions can help you figure out how much land you’ll need and how much you can expect to spend.

Pick The Grapes

There are dozens of types of grapes, each with their own unique aroma, taste, mouthfeel, and climate where they grow best. Here are a few popular types of grapes and what they are best for:

  • Riesling grape. These grapes do best in cool climates. Vineyard owners love the flowery, sweet scent these grapes give off.
  • Cabernet Franc grape. This is a popular black grape around the globe. It can be used to make its own wine, or to be blended into other wines for a more complex flavor pallet.
  • Cabernet Sauvignon grape. This is one of the world’s most used red grapes. This late-budding grape is able to avoid most frost. It can do well in many climates with the taste varying based off of the climate. For example, in cooler climates, you can expect more crisp flavors like mint and cedar, while the grape takes on a sweeter, jam-like flavor in warmer climates.
  • Chardonnay grape: This grape produces a mild flavor and is easy to grow, making it a fan favorite among growers. It can thrive in many types of soil, but does best in chalk or clay.

How Much Can You Spend On Your Own Vineyard?

If you want to open a vineyard just for fun or are planning on growing grapes in your backyard, this step might not be as important for you. If you are planning on making money off of your grapes, this is important. It’s hard to give a general estimate of how much you can expect to spend, because there are dozens of factors that are different for every single vineyard owner. Here are just a few of the many things to consider while making your budget:

  • timing of the first harvest
  • when you can expect to see an ROI
  • labor costs
  • irrigation needs
  • machinery needs
    • fruit crusher, distilling, sanitizing, siphoning, bottling equipment, etc.
  • shipping costs
  • overhead to run the business and marketing costs

According to a study from Sierra Nevada Foothills, the average twenty-acre property can cost anywhere from a few thousand dollars to hundreds of thousands of dollars. Here’s a comprehensive budgeting plan for those of you interesting in opening a vineyard of fifty acres or more.

Prepare The Land

When choosing the property for your vineyard, be sure to pick a plot that is on a slope. Grapes do well on slopes because of drainage. You’ll also want to make sure the property has plenty of access to sunlight, because too much shadow can be deadly for budding vines.

You’ll also want to do a soil test. The soil should have a pH between 5.5 and 6.5, but no higher than 7. Vineyard vines are unique because they struggle to produce grapes in soil that is rich in nutrients. Because of this, you’ll also need soil that has quality drainage.

One Last Piece Of Advice

Patience is the name of the game when it comes to owning a vineyard. It can take at least two years for a vineyard to produce fruit, and turning a profit on wine can take even longer. Similar to green energy or timber, vineyards require a lot of money up front and can take many years to start making money.

Owning a vineyard doesn’t have to remain a daydream. If you start setting aside money and grow grapes on a property where you can maximize profits, you can make the American dream of owning your own vineyard into a reality.

If you want to learn about the art of buying and selling vineyards, check out these great RLI articles from the Summer 2017 Terra Firma magazine written by expert Accredited Land Consultant Flo Sayre. And if you are looking for a qualified agent to help you buy or sell vineyard land, be sure to use our Find a Land Consultant tool.

Laura Barker is a Marketing Assistant Intern for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.