rural home

COVID-19 Lockdown Puts Focus on Rural Broadband Deficiencies

As the COVID-19 lock-down encourages more people to consider moving to rural areas where they don’t have to worry about the dense crowds of city life, the possibility of relocating has put a renewed focus on rural broadband deficiencies.

Ideally, Americans can telecommute to work whether they live in the New York metropolitan area or the High Plains of Wyoming. In reality, a digital divide often prevents the residents of rural areas from accessing high-speed internet services.

Rural Areas With Broadband Deficiencies

According to the Pew Research Center, rural Americans have considerably lower levels of broadband adoption. Surveys show that 79% of suburban residents and 75% of urban residents have broadband in their homes. Only 63% of people living in rural areas say that they have broadband.

Many people think of rural areas as places that exist far away from cities. That’s not always the case when it comes to rural broadband deficiencies. A map of broadband health in America from the Federal Communications Commission (FCC) shows that areas without broadband often sit near urban and suburban communities. For example, Fort Worth, TX, has 23 broadband service providers. Just 60 miles away, Jacksboro, TX, doesn’t have any broadband providers.

Living near an urban center, in other words, doesn’t necessarily mean that you have broadband access. The rural deficiency problem isn’t restricted to areas located hundreds of miles from cities.

rural home broadband

The Troubling Effects of Rural Broadband Deficiencies

Rural broadband deficiencies have several troubling effects on populations. Without access to high-speed internet, people living in rural areas often:

  • Lack access to media that has moved from print to digital formats.
  • Struggle to learn about job opportunities as more businesses turn to online services to advertise open positions.
  • Can’t communicate with friends, family members, and colleagues as easily as people with broadband.

During the COVID-19 lockdown, access to news coverage and communication tools matter more than ever. When people can’t leave their homes safely, they quickly feel isolated from their peers.

The pandemic has also caused a significant shift in the number of people working from home. Remote work already creates challenges for employees used to spending 8 or more hours a day in an office, factory, or other facilities. A broadband internet connection cannot solve all of those problems, but it can make remote work possible. With the recent events taking place, the National Association of Realtors is rightly supporting a bi-partisan bill that would allow remote online notarizations nationwide. However, such measures are only helpful for conducting land transactions in places where a connection is available. While nearly all land agents are able to go back to an office or home to take care of such business, often times access to a connection in more rural areas would make doing business on the go, and in a more timely manner, much easier.

Residents of rural communities may not have the opportunity to telecommute because they don’t have reliable internet connections. Some may use satellite services to access the internet, but those connections rarely offer the speed needed for video calls and performing data-heavy tasks.

fiber internet

How to Give Rural America Better Access to Broadband Internet Connections

Internet service providers (ISP) don’t want to spend a lot of money building a broadband infrastructure in rural areas because they don’t see many ways to earn profits from the investment.

In Manhattan, nearly 71,000 people live in a square mile. When ISPs build infrastructure there, they know that they can get a return on the investment. Extending broadband to rural communities, though, can cost more while only a few people are paying for the service. The low population density makes it difficult for ISPs to commit to broadband connections and see worthwhile returns on their investment.

Solving the digital divide in rural America will likely take more than one approach. Since companies don’t see ways to make much money from upgrading their services, all of the methods will probably require government subsidies or regulations.

Updating Wired Broadband Infrastructures

Many small towns and rural communities use old telephone lines that work about as well as internet connections in the 1990s. Technically, they might connect you to the internet. In practice, though, they cannot handle the amount of data needed to efficiently and reliably use the modern internet.

Updating telephone lines and adding signal boosters to existing infrastructures should make it possible for rural residents to access the internet at broadband speeds.

Improving Satellite Broadband

While few satellite ISPs offer the speed of a broadband connection, companies could update their technology to improve data speeds. The government could help by letting the companies use a wider frequency range.

Conclusion

The COVID-19 lock-down shines a spotlight on one of the country’s ongoing problems: the quality of your internet access often largely depends on where you live. By improving broadband access in rural areas, residents, employers, and governments can keep communities safer while keeping them connected to loved ones and work. It can also open doors for people looking to move to more rural areas where they can escape the cities and buy their own plot of land to live on. Especially as the current pandemic shines a light on an ever-increasing amount of jobs being able to be done completely remotely. If you are thinking about making a move to a new rural property with its own piece of land, make sure to use a qualified land expert, like an Accredited Land Consultant, by using our Find A Land Consultant search tool.

rural home

Will Americans Trade-In Their Urban Lifestyles For Rural Ones In The Wake Of COVID-19?

The COVID-19 pandemic will encourage a lot of people to rethink their urban lifestyles. In a time when social distancing and self-isolating play crucial roles in health, consumers living in urban centers find it nearly impossible to follow the rules for safety and are realizing they are at a much greater risk of being impacted by such an outbreak. The COVID-19 pandemic will, however, only add to subgroup of the population moving away from large, crowded cities to homes with more open lands in rural areas.

In fact, in a recent Virtual Round Table discussion about COVID-19’s Impacts on The Land Market, Accredited Land Consultant Lisa Johnson with Horsepower Real Estate out of Junction City, OR, predicts that there will be a lot of demand and says that right now there isn’t a lot of inventory to meet it. “We’re still seeing a lot of people calling from the larger metro areas… that, whether its 5 acres or 100 acres, they just want somewhere to go.” Read more insights from Lisa in the COVID-19 Impacts on Rural Residential Hobby Farms RLI blog post.

New York City at the Epicenter of a Pandemic

It didn’t take long for New York City to become the COVID-19 pandemic’s epicenter. Millions of people commuting on a public transit system and passing each other on crowded streets helped the virus spread quickly.

Millennials Were Already Moving to Suburbs

Fear of future pandemics will likely encourage more people to leave cities and settle in suburban and rural areas. Those moving away from cities, however, are not starting something new. They’re continuing a trend.

Drew Ary, ALC, with Ary Land Co in Coweta, OK, said in the COVID-19’s Impacts on The Land Market Virtual Round Table that he is seeing a similar trend in land sales with “an increase in anything outside of 45 minutes of a major metropolitan area.” He also noted that the inventory and interest rates are low and thinks “we’ll continue to see an incredible increase in demand for these types of properties. Read more insights from Drew in the COVID-19 Impacts on Rural Residential Hobby Farms RLI blog post.

As Millennials get older and start families, many of them realize that they cannot continue to afford living in large cities. The median home cost in New York City exceeds $680,000. In LA, the median home cost is nearly $690,000. Few families can afford to spend that much money on housing. A growing number of Millennials and other young people see suburbs, mid-sized cities, and rural areas as cost-saving alternatives with other perks of their own.

Knowing that they will have to spend half a million dollars more on housing to live in big cities, a lot of people don’t mind moving. Moving to smaller cities, suburbs, and rural communities often means that they can purchase larger homes, access better public education, and avoid higher rates of crime – not to mention improve their mental health. Add the fear of another pandemic, and it becomes easy for people to reconsider living in places like New York, Chicago, Washington, D.C., and Los Angeles.

rural home

Technology and Remote Work Opportunities May Influence Decisions

Improved technology and a growing number of remote work opportunities may also influence people when they decide where to live. Living in New York makes sense when it’s the only place where you can find a job. When work becomes decentralized and remote, though, employees can effectively make more money by living in cheaper areas.

Data from the Pew Research Center show that internet access has grown considerably in rural and suburban areas over the last two decades. In 2000, only 42% of people in rural places used the internet. During the same year, 56% of suburbanites accessed the internet. In 2019, 85% of people in rural communities and 94% of people in suburbs said that they use the internet.

Despite improvements in technology, many business leaders have shown reluctance to remote working. The pandemic has forced them to reconsider this outdated idea, which could lead to a significant paradigm shift that embraces the value of working remotely.

Companies have already undertaken the hardest parts of setting up remote teams. Stay-at-home orders meant that businesses had to review and adopt software applications designed for remote workers. With these technologies now in place, some companies may decide that it makes sense to keep their employees remote to decrease overhead instead of bringing workers back to their offices. By keeping workers at home, companies may have to spend slightly more money on technology. However, in return, they can save a lot of money on overhead costs associated with real estate, energy, and insurance.

The combination of better internet technology throughout the country and an increase in remote work opportunities will make it even easier for ambitious people to move away from crowded cities.

rural home

Are Employers and Employees Rethinking the Future?

No one knows how people will respond to the COVID-19 pandemic. Once researchers develop a vaccination, employers and employees might go back to life as usual. Alternatively, they could be reconsidering their urban lifestyles as a way to prepare and protect themselves from future potential outbreaks as the world economy continues to globalize. If they feel less certain about the future, there is a good chance that many will leave crowded urban areas for places that offer more room to spread out.

If this pandemic has you thinking about moving to a more rural area to put some land between you and your neighbors, as well as allow you to source your own food, make sure to Find A Land Consultant and use the Land Connections property listing site to help find the perfect property to meet your needs.

rural residential farm

COVID-19 Impacts on Rural Residential Hobby Farms

A panel of Accredited Land Consultants of the REALTORS® Land Institute (RLI) shed light on the impacts of the Coronavirus (COVID-19) outbreak on land values and land market trends across the country in a recent Virtual Round Table session. The panel, which consisted of expert land agents from across the country, mostly pointed towards a positive outlook for the land market despite volatility in other areas. One key market they covered was the rural residential hobby farm market.

With a trend the past decade of urban-dwellers moving further to the outskirts of larger urban areas, the COVID-19 outbreak seems to have pushed the migration to rural residential hobby farms even further. Lisa Johnson, ALC, with Horsepower Real Estate out of Junction City, OR, shared that when it comes to buying a rural residential hobby farm or ranchette, these properties are a great “entry-level for owning land, typically 5-20 acre plots.” She feels that due to the COVID-19 outbreak “People are looking to get back to the basics a bit and out of the suburbs.” She explained these rural residential hobby farms are the perfect alternative because “the price range for these properties is well within reach of someone looking to sell their home in town and roll their equity into a down payment for 5 to 20 acres.”

Rural Residential Hobby Farm

As far as going forward, she says they aren’t seeing a lot of listing coming on but closed sales were still pretty even with where they were this time last year. She did note that since the start of April, many agents are seeing a slight slip in the number of closed sales.  Lisa predicts that there will be a lot of demand and says that right now there isn’t a lot of inventory to meet it. “We’re still seeing a lot of people calling from the larger metro areas… that, whether its 5 acres or 100 acres, they just want somewhere to go.”

She also noted that the shutdown is making it clearer than ever that not everybody needs to go to work in an office. With so many companies getting a taste of working remotely, there will likely be a shift in the future to more remote jobs that will allow people to settle further out from cities on to properties like these. As far as an outlook, she said “I also think the economy is going to come back pretty strong.”

Drew Ary, ALC, with Ary Land Co in Coweta, OK, said he is seeing a similar trend in land sales with “an increase in anything outside of 45 minutes of a major metropolitan area.” He said they’ve “had some seasoned listings that have been on the market a while and many of them have been snatched up lately,” noting them having “a lot of calls on rural residential developments.” Drew mentioned that “these properties on the outskirts of major metropolitan areas really seem to hold their value.” He also noted that the inventory and interest rates are low and thinks “we’ll continue to see an incredible increase in demand for these types of properties.

Panel moderator Eric Zellers, who is also with Ary Land Co., noted that he’s been “getting a lot of calls asking if sellers of larger tracts would consider breaking them down and selling 5 or 10 acres of the property.” It is still early to tell, but this could be a new trend in buyer purchasing as more and more people look to invest in living outside urban areas and instead on a rural residential hobby farm or ranchette.

For more insights on the impacts of the outbreak and shutdown on the ranch land market for ranchers from Clayton as well as insights on how other land markets are being impacted, make sure to watch the full Impacts of COVID-19 on The Land Market Virtual Round Table presented by the RLI 2020 Future Leaders Committee or check out the related posts below:

If you are interested in buying, selling or investing in land real estate, make sure to Find A Land Consultant, like an ALC, in your area with the expertise needed to best assist with your transaction.

About: Drew Ary, ALC, is an agent with Keller Williams Advantage. Drew has a vast knowledge of raw land, land with improvements, and farm and ranch properties. Above all, he has a passion for selling land and farm and ranch properties by bringing buyers and sellers together through honesty and integrity. Drew spent 10 years in the real estate auction world with roles as a Closing Coordinator, Project Manager, and a large portion as the Director of Farm & Ranch Sales. Drew moved to traditional real estate with Keller Williams Advantage at the beginning of 2017.

Lisa JohnsonAbout: Lisa Johnson, ALC, is the Owner/Principal Broker at Horsepower Real Estate. Specializing in Farms, Ranches, and Equestrian Properties in Western Oregon, her and her team of land Brokers are among the top rural agents in the area. Lisa is a member of the RLI Pacific Northwest Chapter, and a 2019 Future Leaders Committee member.

recreational land camping

Are Buyers Moving To Recreational Land In The Age Of COVID-19?

A panel of Accredited Land Consultants of the REALTORS® Land Institute (RLI) shed light on the impacts of the Coronavirus (COVID-19) outbreak on land values and land market trends across the country in a recent Virtual Round Table session. The panel, which consisted of expert land agents from across the country, mostly pointed towards a positive outlook for the land market despite volatility in other areas. One key market they covered was recreational land real estate.

Justin Osborn, ALC, out of Durango, CO, who is with the Wells Group Durango said he is “definitely seeing an increase in demand for recreational properties.” For example, he “had three properties that had been on the market for over a year and all of them went under contract the first week of March.” He expects there are a lot of buyers out there “just looking to get away with all the sports clubs shutdown, the recreation centers shut down, and people just can’t get out to spend time as a family recreating like they were able to before all this started.” This is already being reflected in the market as “demand for recreational land has actually gone up,” at least so far in the early days after the outbreak and shutdown.

recreational land

While the demand has gone up, the interesting thing that Justin pointed out is that many of the recreational tracts being purchased are on the smaller-side, as opposed to larger more expensive parcels. This means that many buyers in the market right now are turning out to be potentially first-time land buyers or middle class buyers looking for a refuge to camp and “hunt to fill their freezer.” In his opinion, “We’ll probably see a small uptick, less than 5%, in the small parcels.” He said he doesn’t “see those depreciating, at least right now.”

The bigger parcels, especially in the millions of dollars, he noted that “there’s still a lot of inventory of those. I don’t see those larger ranches doing quite as well, especially the ones that are overbuilt… those I’m afraid could get pretty hard [to sell].” He noted, though, that the depreciation of those larger ranches though should be more of a short-term hit that will eventually correct in the longer-term.

Overall, Justin is predicting “a lot of opportunities, even for the average Joe, to get themselves into a recreational property.”

For more insights on the impacts of the outbreak and shutdown on the ranch land market for ranchers from Clayton as well as insights on how other land markets are being impacted, make sure to watch the full Impacts of COVID-19 on The Land Market Virtual Round Table presented by the RLI 2020 Future Leaders Committee or check out the related posts below:

If you are interested in buying, selling or investing in land real estate, make sure to Find A Land Consultant, like an ALC, in your area with the expertise needed to best assist with your transaction.

About: Justin Osborn, ALC, is a licensed associate real estate broker with The Wells Group. Justin is a member of the REALTORS® Land Institute and serves as Chair of their 2020 Future Leaders Committee.

COVID-19 Impacts on Agricultural Tillable Farmland

A panel of Accredited Land Consultants of the REALTORS® Land Institute (RLI) shed light on the impacts of the Coronavirus (COVID-19) outbreak on land values and land market trends across the country in a recent Virtual Round Table session. The panel, which consisted of expert land agents from across the country, mostly pointed towards a positive outlook for the land market despite volatility in other areas. One key market they covered was farmland real estate.

RLI 2020 National President Kyle Hansen, ALC, with Hertz Real Estate Services in Nevada, IA, shared his expertise on what’s happening for agricultural tillable farmland, especially as for the Midwest. Kyle’s company holds a lot of in-person auctions and due to the stay at home orders and CDC recommendations they’ve been postponing a lot of those. However, he noted some are choosing to move to online auctions. “There’s been a little bit of activity, though some sellers are withdrawing their properties.” He went on to say that “We haven’t seen much of a drop-off in the number of sales that we’ve seen happening. It is still a little too early to tell how much this is going to affect the market, but I can definitely tell you that there’s been a lot of activity; a lot of phone calls asking what’s available on the market.” He told listeners that most are looking for good deals and mixed-use agricultural/recreational properties.

On a positive note, he said “It seems like there’s money to be spent. I’ve even had a few properties that have been on the market for ten months to almost a year that I received three offers on in two-days and that hadn’t had almost any offers on over the past ten months. So there is definitely activity and some increased interest from buyers.” He believes that, especially for high-quality productive agricultural properties, they will continue not to see a drop off in buyers which is good news for sellers and the market as a whole.

agricultural land

The biggest change he’s seen since the shutdown? “We’ve been doing a lot of remote teleconferences… a face-to-face meeting isn’t necessarily warranted.” He went on to touch on other technologies that have enabled transactions to continue taking place remotely, saying “We’ve been using drones and are able to see a lot more with drone footage than ever before in the past… so it’s a tool that’s come out in the past few years that [agents] are really taking advantage of now.”

When asked by sellers if now is the right time to list, Kyle tells them “It’s the right time when you and your family decide to sell a farm.” As he pointed out, “no one can know for sure what is going to happen to the market six months from now,” so he believes “as long as [sellers] are realistic and understand the market conditions right now, I tell them that we’ve got buyers asking.” Predicting some pent-up demand after all this gets figured out and the market goes back up, he says “You have to be positioning now to get your property on the market.”

Kyle also pointed out that for those looking to do a 1031 Exchange or who are getting close to the deadline of finalizing one, they have extended the deadline to July 15. This 1031 deadline extension was fought for by the REALTORS® Land Institute which signed on to a letter from the National Association of REALTORS® petitioning congress for an extension. NAR and RLI have advocated heavily for these extensions since the outbreak of the COVID-19 pandemic.

He said the best things buyers and sellers can do right now is “to try to understand the market and visit with your land professional each and every day.”

For more insights on the impacts of the outbreak and shutdown on the ranch land market for ranchers from Clayton as well as insights on how other land markets are being impacted, make sure to watch the full Impacts of COVID-19 on The Land Market Virtual Round Table presented by the RLI 2020 Future Leaders Committee  or check out the related posts below:

If you are interested in buying, selling or investing in land real estate, make sure to Find A Land Consultant, like an ALC, in your area with the expertise needed to best assist with your transaction.

Kyle Hansen, ALCAbout: Kyle Hansen, ALC, has been a member of RLI since 2008, receiving his ALC Designation in 2011. In 2015 and 2016, he served as Chair of RLI National’s Future Leaders Committee. He is an active member of the RLI Iowa Chapter, serving as their President from 2012-2013. The chapter also awarded him the RLI Iowa Chapter Land Broker of the Year Award in 2013. Then in 2014, he received the RLI National Rising Star Leadership Award which recognizes a member approaching a mid-level in their career who is on their way to making significant contributions to the land profession and to RLI. Kyle later went on to receive a 2017 RLI Top Twenty Producer APEX Award and was among those recognized in the 2017, 2018, and 2019 APEX Producers Club as part of the RLI APEX Awards Program. Kyle received his Broker’s license in 2016 for Iowa and Missouri.

timberland

COVID-19 Impacts on Timberland

A panel of Accredited Land Consultants of the REALTORS® Land Institute (RLI) shed light on the impacts of the Coronavirus (COVID-19) outbreak on land values and land market trends across the country in a recent Virtual Round Table session. The panel, which consisted of expert land agents from across the country, mostly pointed towards a positive outlook for the land market despite volatility in other areas. One key market they covered was timberland real estate.

“Much of the forest products market is tied to housing, especially softwood markets, and our long awaited housing boom had finally arrived. We were in a period of extreme optimism,” said Chris Miller, ALC, with American Forest Management Inc. in Charlotte, NC, talking about the market before COVID-19. He went on to say that “Since early March, however, we’ve seen some softening in our forest products market… and mills are lowering their inventory in preparation for what they perceive as a slowdown in demand for their products.” He did note, though, that its fairly early to tell, so price reductions have been modest so far. He explained, however, that he does “anticipate an 8% to 12% decrease in unit pricing across forest product markets in 2020.”

As far as demand, he also noted “much of this is tied to housing starts, the numbers for which have now been revised from an anticipated 1.6 million to around 1.2 million for 2020.”

timber

However, he said it is not all bad news, “There is optimism, we anticipate a v-shaped recovery for our business… with some gradual increases [in product prices] starting in the fall of 2020.” Part of the reason, he says, is because the underlying fundamental need for forest product is so strong. We have under-built homes in our country that are going to need replaced or repaired. “One of the main benefits of timber is you can delay a harvest.” He also noted that, as a land agent, incoming “call volume is much higher than it was pre-COVID-19 so the interest in doing business is still there.”

Talking about investing in timberland “The broad consensus is that we expect little impact on [long-term] timberland values. Timberland investors in general have a really long-term view with most of their acquisitions based on ten-year or longer ownership periods.” As far as the outlook, he said “Whenever there is a drop like this in equities I think it reminds folks of the value of timberland [or farmland] and a balanced portfolio.” He also notes that timberland makes a good hedge against potential inflation, which may result from the stimulus package that was approved.

If you are interested in buying, selling or investing in land real estate, make sure to Find A Land Consultant, like an ALC, in your area with the expertise needed to best assist with your transaction.

For more insights on the impacts of the outbreak and shutdown on the timberland market from Chris as well as insights on how other land markets are being impacted, make sure to watch the full Impacts of COVID-19 on The Land Market Virtual Round Table presented by the RLI 2020 Future Leaders Committee or check out the related posts below:

Chris Miller, ALCAbout: Chris Miller, ALC, is a land broker and consulting forester for American Forest Management, Inc. in Charlotte, North Carolina.

ranch land

What Ranchers Need To Know About COVID-19’s Impacts on The Ranch Land Market

A panel of Accredited Land Consultants of the REALTORS® Land Institute (RLI) shed light on the impacts of the Coronavirus (COVID-19) outbreak on land values and land market trends across the country in a recent Virtual Round Table session. The panel, which consisted of expert land agents from across the country, mostly pointed towards a positive outlook for the land market despite volatility in other areas. One key market they covered was ranch land real estate.

Clayton Pilgrim, ALC, with Century 21 Harvey Properties in Paris, TX, shares his insights on the impacts ranchers are seeing from the shutdown caused by the outbreak. You can’t talk about the land values for ranch land though until you talk about the demand, so he started by noting that “The restaurants being shutdown has left us right now about 10% off where we were last year, looking at $100-200 per head loss on cows. We’ve had some price adjustment, so people are pulling cattle back to try and wait until prices go back up. In my opinion, though, that’s going to cause things to go even further down.” Additionally, he noted that the demand for higher quality cuts of meat has gone down due to restaurants being shut down and people looking ahead to potentially another recession with higher levels of unemployment. “If I’m a beef producer today, I would definitely keep things tight,” he suggests to current ranch land owners.

So what does all that mean for land values? Clayton says “In my opinion, I think you’re going to see pretty declining prices in [ranch land] in the next six-months to maybe a year,” just looking at the decreased demand for poultry, beef, dairy, and other ranch land products. “One positive for any potential buyers,” he joked, “is that interest is sure cheap right now!”

For more insights on the impacts of the outbreak and shutdown on the ranch land market for ranchers from Clayton as well as insights on how other land markets are being impacted, make sure to watch the full Impacts of COVID-19 on The Land Market Virtual Round Table presented by the RLI 2020 Future Leaders Committee or check out the related posts below:

If you are interested in buying, selling or investing in land real estate, make sure to Find A Land Consultant, like an ALC, in your area with the expertise needed to best assist with your transaction.

Clayton Pilgrim, ALC, is a licensed real estate agent with Century 21 Harvey Properties in Paris, Texas.  Throughout his career he has been in production agriculture from on the ground operations to large scale management. Pilgrim is involved in private investing in farms, ranches and recreational tracts throughout Texas and Oklahoma. He is a member of the Realtors® Land Institute, an Accredited Land Consultant and on the board of the Future Leaders Committee. He resides in Paris, Texas with his wife, Kristy and daughter, Caroline.

commercial development land

COVID-19 Impacts on Commercial Development Land

A panel of Accredited Land Consultants of the REALTORS® Land Institute (RLI) shed light on the impacts of the Coronavirus (COVID-19) outbreak on land values and land market trends across the country in a recent Virtual Round Table session. The panel, which consisted of expert land agents from across the country, mostly pointed towards a positive outlook for the land market despite volatility in other areas. One key market they covered was commercial and development land real estate.

Accredited Land Consultant (ALC) Matt Davis with Cushman & Wakefield in San Diego, CA, says the biggest issue they are running into in the commercial land development market is that “most developers, investors and lenders we’re working with don’t know how to underwrite the risk. They don’t know how much of a discount is reasonable, so, to eliminate the risk, they’ve put their pencils down.” He went on to note that “There are buyers who are still underwriting deals. The ones we’ve talked with have been using more conservative assumptions, some of those assumptions include slower lease absorption for new construction, expecting no rent growth over the next couple years, and increased cap rates at their exit. Again, those are all conservative assumptions that will result in a lower land value than there would’ve been a month ago.” So what does he recommend sellers do now? “It is a great time to put together marketing collateral and be prepared to enter the market.”

He also shared some good news about the development land market. He is seeing “very different impacts on transitional land since these properties are less likely to be impacted in the short term. The biggest disruption for [transitional land] transactions is coordinating site visits and meetings with municipalities, project consultants, and other parties needed to complete the transaction. Overall though, there is good news on the longer-term development front.”

For more insights on the impacts of the outbreak and shutdown on the commercial development land market from Matt as well as insights on how other land markets are being impacted, make sure to watch the full Impacts of COVID-19 on The Land Market Virtual Round Table presented by the RLI 2020 Future Leaders Committee or check out the related posts below:

If you are interested in buying, selling or investing in land real estate, make sure to Find A Land Consultant, like an ALC, in your area with the expertise needed to best assist with your transaction.

Matt DavisAbout: Matt Davis is a real estate broker with Cushman & Wakefield. He is based in San Diego, CA, and assists clients with the disposition and acquisition of investment grade agricultural and transitional land assets. He is also founding member of the company’s Land Advisory Group and Agribusiness Solutions Team. Matt is a member of RLI, received their 2019 Land Rising Star award, and serves the 2020 Future Leaders Committee.

lease farmland

How to Lease Your Farmland

Owning farmland doesn’t mean that you have to grow crops or raise animals to earn money. When you lease farmland, you give someone else the right to use the property while you retain ownership. Before you lease your farmland, though, you should learn about several factors that may affect your agreement.

Do Some Research to Set a Fair Price

You must set a fair price when leasing your farmland because it will attract reliable tenants and help you earn a strong return on your investment. You will need to consider several variables to set a fair price, though.

Learn About Your Farmland

The more you know about your farmland, the better you can market it to interested lessees. For example, you might get a higher price if you have excellent soil that will nourish crop. Then again, you might need to charge less if you discover that an industrial operation used to sit on your property.

You should also walk the land carefully and note existing water features, roads, hills, and buildings. All of these things will matter when you try to lease farmland. Plenty of ponds and access to a barn could drive up the price. Too many hills, though, you could mean that you need to lower the price or focus on lessees who don’t mind hilly land.

Know How Much the Taxes Will Cost

You may have to pay property and income taxes when you lease your farmland. Talk to your county’s tax office or property value assessor to determine your annual taxes. You may also want to talk to a CPA about how the income from leasing your land will affect your federal and state tax burden.

Make sure you consider these amounts when you set a fair price for your farmland lease.

lease farmland

Get Insurance That Protects You

As the owner of farmland, you have more responsibilities than the lessee. Get the right insurance policies that will protect you from liability, property damage, and vandalism. Without insurance, you could get stuck with expensive medical bills after someone gets injured on your land and needs to recover in a hospital. You could also lose money when an irresponsible person lets your infrastructure or buildings degrade. You won’t need crop insurance like the lessee, but you do need other forms of coverage that protect you from liability.

Always Check References

Get at least three references from your applicants. Ideally, the lessee will have farming experience, so you can talk to another landowner or farmer about the person’s reliability.

Meet Applicants in Person

It is always optimal to meet applicants in person so you can get to know them. However, often this can be a difficult one to make happen since many landowners are absentee. If you can arrange to meet them though and something feels off about an applicant, then it’s best to pass on their offer. If meeting in person is not in the cards, you can tell a lot from a phone conversation or video-conferencing call as well to get a better feel for the applicant. You don’t want to lease to someone who will misuse your land or not uphold their side of the agreement.

Talk About the Business of Farming

Finding a long-term tenant will save you the hassle of looking for more lessees in the future. Whether in-person or on the phone, talk to applicants about their business plans. If they understand the business of farming, then they’re more likely to earn a good living from the land. That makes them more likely to keep leasing from you.

cornfield

Use a Land Professionals to Lease Farmland

Don’t rely on handshake deals when you lease farmland. Avoid getting lost in a corn maze, have a lawyer or farm manager write a legal contract that defines every aspect of your agreement. It should include, at a minimum, the following:

  • Beginning and ending dates.
  • Options to renew the farmland lease.
  • Any restrictions on what lessees can do with the land.
  • The monthly price of leasing the land.
  • Any fees that you will charge for late payments, returned checks, and similar situations.

“While you can use an attorney, a farm manager if possible is usually a better fit.  They are likely cheaper and will maintain contact with the tenant and land to ensure things are running smoothly,” says Accredited Land Consultant Luke Worrell, ALC, AFM, with Worrell Land Services, LLC. in Jacksonville, IL. He also suggests landowners seek to work with and ALC that is “a Farm Manager or an Accredited Farm Manager (AFM),” as it “would be extremely valuable and eliminate a lot of the extra work a landowner would need to otherwise take on themselves.”

If you need help evaluating your farmland or finding someone to lease it, Find Land Consultant in your market with specialized expertise, like an Accredited Land Consultant (ALC) for assistance. If possible, find an ALC in your area who is also an AFM to assist with this type of transaction. Accredited Land Consultants have years of experience and continuing education, so they can make the transaction easier for everyone involved.

private ranch property

Landownership Basics: Private Property Rights

“The best investment on earth is earth.” -Louis Glickman

Fee simple landownership comes with some fundamental private property rights no matter what kind of land you own and where you own it. Understanding your private property rights from the start, even before owning a property, will ensure you get the most enjoyment from your property without violating the rights of others.

Fee simple “refers to real estate or land ownership. The owner of the property has full and irrevocable ownership of the land and any buildings on that land. He is free to do whatever he wishes on the land subject to local zoning ordinances. Fee simple and fee simple absolute are the same thing. Fee simple is the highest form of property ownership.”

“Private property rights are one of the pillars of capitalist economies, as well as many legal systems, and moral philosophies,” according to an article defining property rights.

Right to Possession

Once you fully own your own piece of land and hold the title, you retain possession and control its rights. If you have a mortgage, then the lender probably holds your land title until the loan and its interest is paid in full. Until then, you will have limited possession rights and potentially limited private property rights for use. Depending on where you live and the terms of your loan agreement, the lender could take the property quickly once you stop making payments.

land real estate private property

Right to Control

Assuming that you do not live in a neighborhood or city with zoning regulations or other laws that forbid certain activities, you can participate in any legal action on the land you own.

Keep in mind though that neighborhood associations and similar organizations often have covenants that restrict certain activities, so you’ll want to ensure none apply to your property. Covenants may include relatively harmless demands like requiring you to maintain grass that’s visible from the road. Other covenants may restrict activities like raising animals, operating a business, or using chemical fertilizers.

Always read local covenants and laws closely before purchasing land. Using a land expert in your area is the best way to learn about your property rights.

Right to Use and Enjoyment

The right to use and enjoyment means that you can engage in any legal activity on your property. The word “legal” carries a lot of weight in that sentence. For example, owning land does not mean that you can open a casino there without a state license. You must comply with local, state, and federal laws at all times. In fact, the Department of Justice can seize property that they think has been used to commit crime. Federal forfeiture law lets the government take ownership even without proof that it was connected to a crime.

You’ll also need to gather information on any zoning regulations that are tied to your property. According to legal experts, “Zoning regulations and restrictions are used by municipalities to control and direct the development of property within their borders,” and therefore restrict, limit, or otherwise define the uses of a property.

agritourism apple picking

Right to Allow Others a Right to Use

As a landowner, you can give other people access to your property. In fact, it is for many one of the most lucrative aspects of owning land real estate. You can choose to let others access the land for free, or you can charge for access. For example, investors may purchase farmland so they can earn money by leasing it to farmers. Recreational landowners may charge for access to hunt their properties. Agricultural landowners may charge visitors to access for agritourism like fruit picking, pumpkin patches, or corn mazes.

private property signRight to Privacy and to Exclude Others

No one has the right to access your property without permission. You have the right to tell other people that they cannot come onto your private property.

There are only two caveats to the right to privacy and exclusion. Law enforcement can come onto your property while pursuing a suspect. They do not need to stop their pursuit to seek your permission. Law enforcement can also access your property without consent by getting a judge to issue a warrant. If a judge has reason to believe that illegal activities take place on your property, then it only takes one document for officers to investigate.

Additionally, people who have been granted legal rights to use the property for access or another use by previous owners should be considered.

Right to Transfer Ownership

When you own land, you have the right to transfer ownership as you see fit. You could give the property to a relative or friend as a gift. You could include the land in a will or trust. You can also transfer ownership by selling the estate to someone.

Right to Use Property as Collateral

Your land has value that you can use as collateral when using a mortgage to purchase other properties. Collateral may help you qualify for a mortgage or other loan, and you may get a lower interest rate because your land offsets some of the lender’s risk. Keep in mind that failing to repay the mortgage could mean losing rights to your property.

Air Rights

For the most part, you own the right to use the air space that’s above your land. There are limitations to your air rights, though. You could potentially build a skyscraper on your property as long as doing so doesn’t prevent other owners from enjoying their land or violate any zoning laws as mentioned above.

You also don’t have the right to build horizontally across someone’s land. You can only construct vertical buildings that follow your property lines. If the building hangs over the property line, then the neighboring owner could demand that you remove the structure. Air rights especially come into play when it comes to developing on commercial land or residential land in urbanized areas.

What Landownership Rights Do Not Include

Owning land gives you considerable rights over its use, which is one of the biggest draws for land buyers in all markets. Surface rights, however, do not ensure that you control access to the ground below your feet or the air above your head. Before purchasing land, it makes sense to perform an extensive title search or Mineral Rights Search. You may discover that someone else already owns the minerals, oil, and other valuables under the surface of your property.

Understanding Your Private Property Rights

Landownership gives you exceptional rights, but private property rights can have limits. Make sure you understand your private property rights before you purchase a piece of land. Doing so could influence where you choose to buy property and how you use it.

When it comes to learning about your property rights, Accredited Land Consultant Matt Davis with Cushman & Wakefield in San Diego, CA, says “In addition to the personal enjoyment you and your family may receive from spending time on your property, owning land is a tried and true way of preserving and growing wealth. By leveraging the expertise of a land professional early in your property search, you can be confident you know what you are buying, what rights others may have that impact the property, and that you will be able to use the property the way you desire, for generations to come.”

The best way to learn about your property rights or to learn about the property rights of a property you are interested in purchasing is to Find A Land Consultant, like an Accredited Land Consultant, in your area with expertise in the land market.