How To Make More Money Off Of Your Christmas Tree Farm

It’s that time of year again. With Thanksgiving now behind us, people are in the holiday spirit, which means it is peak Christmas tree season.

However, Christmas trees come with a unique set of complications. It’s a crop that’s only sold once a year, the trees take a lot of money and effort to transport, and use up a ton of land. Christmas trees have one of the smallest time frames for buying and selling of any crop, even though they can take up to eight years to reach maturity.

Despite all of that, Christmas trees are still a lucrative crop and bring in steady holiday money to big and small farms alike. If you’re interested in learning how to make more money off of your Christmas tree land, read on.

  1. Make Low-Cost Adjustments to Get Better Trees

Just like how people will pay more for beautiful flowers or huge, juicy strawberries, you can make more money off of good-looking trees. There are some tricks you can use in the early stages of the tree’s life to increase its value. If you make adjustments in the soil that your trees are growing in to get the right PH balance and moisture level, your trees will be much heathier and better looking. Also, keep up the habit of shaping your Christmas trees. Cutting away at dead and gnarled branches every year helps to give the trees that beautiful conical shape that everyone loves. It might seem tedious, but the results will be worth it.

  1. Grow the Most Popular Types of Trees

Some varieties of Christmas trees sell better than others. The Fraser Fir is the most popular type of Christmas tree because of its wonderful scent and classic Christmas tree look. But some places prefer different types of trees. The Eastern Red Cedar is popular in the South because its natural cone-like shape doesn’t require much maintenance. The White Fir is popular in California for its needle retention. Look up the sales for your region in the last year and invest in the type of tree that is selling best to maximize your profit potential.

  1. Consider Pick Your Own/Cut Your Own

Pick-Your-Own sections have their pros and cons. On the pros side, it’s a great draw for a fun family day out, you can charge more for Pick-Your-Own trees than for regular trees, and people will stay on your property longer, which means they have more time to purchase your produce. However, having people linger on your property can also be a downside. People can wear down your land and cause damage to your crops. If your land is used to lots of visitors, then Pick-Your-Own could be an option for you. If not, consider having your Pick-Your-Own section far enough away from the rest of your crops so that customers don’t damage them. If it’s too late in the season to re-locate your Pick-Your-Own section, invest in plenty of fences and signs to keep people from wandering where they shouldn’t.

  1. Advertise, Advertise, Advertise!

If you haven’t started advertising yet, you should start as soon as possible. Most people buy their Christmas tree shortly after Thanksgiving, so you want to get the word out about your trees soon. And with people shopping for Thanksgiving and getting a head-start on their Christmas shopping, this is the perfect time to invest in a billboard ad. Since there is a time frame around how long you can sell trees and how long people will want to buy them, you’ll want to use this time to get the word out to as many people in your area as possible. Get creative! Use flyers, radio ads, newspaper ads, whatever you can think of.

  1. Don’t Cut Down All Your Trees at Once

Even though they are famous for their ability to withstand droughts, Christmas trees dry out after being cut down faster than you’d think. The trees start to lose moisture as soon as they are chopped down. Dehydrated or dying Christmas trees lose their needles and turn brown, which can turn potential buyers away from your property. So, instead of having lots of pre-cut trees out for display, only have a few trees on display and replace them as they are bought. A great way of keeping track of when to cut down trees is by taking pre-orders. This way, you can cut down the tree the day the buyer gets there instead of leaving it out to dry.

  1. Market What Makes Your Trees Unique

What makes your tree lot stand out from everyone else’s? Are your trees organic? A popular or unique type of pine tree? Is it a family-run ranch? Pick-Your-Own? Each of these is a great selling point for your advertisements. Also, if your trees have been grown with specific traits (needle retention, doesn’t need much upkeep, beautiful smell, extra-large, etc.), be sure to mention those, too.

  1. Give Your Trees the Spotlight on Social Media

Does your farmland have a website, blog, Facebook page, or Instagram? Put up some pictures of your best Christmas trees. This is an easy, free way to show off your produce. You can also put up pictures of the trees growing and the harvesting process so that potential buyers can get an insight into how the trees are taken care of (for more about immersive online farm tours, check out this article). If you’re looking for inspiration, check out websites like Texas Christmas Tree Farms and Peltzer Pines Christmas Tree Farm.

  1. Have Other Goodies Out to Buy

When people come to your farm, it’s the perfect time to show off your produce. You can sell home baked goodies (gingerbread is a holiday favorite!), hot chocolate or cider, winter crops, holly, and mistletoe. But why stop at produce? People love to buy unique gifts for their loved ones during the holidays, so consider selling things like homemade jewelry, baked goods, wood carvings, and more next to your Christmas .

Christmas trees can be a tricky crop, but with plenty of preparation and a marketing plan, you can make more money off of your Christmas tree farm.

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.

 

 

rural house

Five Essential Tips to Maintaining a Rural Home

Living out in the country certainly isn’t for everyone. Some people are too accustomed to the city life, have a need to be near other people or desire a home with no maintenance. However, for the right type of person, there’s nothing better than a rural home.

There are plenty of benefits to living in a rural area. The one you’ll likely notice first is how quiet and peaceful it is without the constant noise that becomes a part of life in the city.

Of course, when you live in a rural home, it presents its own unique set of challenges. You need to handle more tasks yourself, and nature can rise up quickly if you don’t stay on top of it. With the following tips, you’ll be able to better maintain your rural home.

Invest in the Tools for the Job

There’s just no sense in trying to extinguish a fire with a water gun. You don’t want maintaining your land to be any more difficult than it has to be, which is why you should invest in tools that make the job easier. The right tools will depend in part on your home and the amount of land you have. If you’ve acquired quite a bit of land, a push mower or even a small riding mower just isn’t going to do the trick.

A good riding mower is important to keep the grass in check because it can get out of control quickly, especially after some rain. Planning on planting anything? You’ll need a soil tiller. A compact tractor is a good choice for its versatility, as you can use it to mow, dig, move snow and much more.

barn house

Build a Barn

This can be expensive, but look at it like this – you’re already going to invest money in equipment for your home. If you then leave that equipment uncovered, weather will cause all kinds of wear and tear, reducing its lifespan. You may be able to get away with using your garage depending on what equipment you have, but you’re likely going to need a barn at some point.

Besides, barns are cool. They can be a source of pride and a relaxing retreat if you’re the sort who enjoys some manual labor – and if you’re looking into country living, you’d better be. If you plan to have any animals on your land that won’t be living in your home, then you’ll need a barn for them as well anyways.

Establish a Fence Line

Even though you want to stay close to nature, you also need to make sure the land that’s yours is clearly identified. Fence lines can help you to corral animals, section off portions of land for a specific use, or identify property lines. Disputes over where your property ends and a neighbor’s begins can be frustrating. Avoid that headache entirely by establishing a fence line.

After you’ve got your fence up, walk along it occasionally to check for any issues. If posts are rotting, replace them. If they’re loose, reset them so that they fit snugly. Make sure the fence is snug and if it’s an electric fence, test the voltage at different areas.

 

Keep the Area Near Your Home Especially Well Maintained

Some wild animals can be a treat to watch. There’s nothing like spotting a family of deer or a herd of elk while you’re sipping your morning coffee. Other animals – pests, essentially – will see your home as the perfect place for their own safety. Rats and snakes can be dangerous and you definitely don’t want them setting up shop in your home.

One personality trait that many of these animals have in common is an aversion to crossing open fields. That’s precisely why they like the look of your home and surrounding shrubs; they look for places where they can easily hide. If you’re mowing the grass and trimming bushes regularly, it’s far less likely that you’ll have any pest problems. And when in doubt, you can call in your very own enforcer, leading into the next tip.
farm dog
Get a Dog

They’re called man’s best friend for a reason and dogs are perfect company in a rural area. They’ll be thrilled to have so much open space to run around and play. Besides being nice to have around, dogs can also help in many ways around a rural home. Many dogs have herding instincts to keep livestock in the proper area. Breeds that are especially good at this include the Australian cattle dog, the Australian shepherd, the border collie, and the Rottweiler, although there are also many others.

Predators and pests will think twice about coming near your home or your livestock when they smell or hear your dog. And of course, your dog would love the opportunity to alert you whenever someone stops by your home.

Living in a rural area can be an extremely rewarding experience for the right type of person. Despite all the tips you could read, some of the learning simply comes from experience of rolling up your sleeves and getting out there. However, if you invest in the right tools, identify and organize your property, and consider getting a dog, you’ll be on the right track and avoid many potential issues.

About the author: Selene Strong is a contributing writer and media specialist for Bradley Mowers. She regularly produces content for a variety of landscaping and gardening blogs.

Kudzu: Friend or Foe?

Kudzu.  The mere mention of the word often invokes a visceral combination of both annoyance and fear.  Personally, I think of the movie ‘The Blob’ which was first released in 1958 starring Steve McQueen and Aneta Corseaut battling a gelatinous, alien life form that slowly engulfed everything in its path.  Similarly, I view kudzu as a scary, green pest slowly creeping along, plaguing the land in which it captures, and becoming the perfect habitat for an evil creature to live patiently waiting for its next unsuspecting victim to wander too close!  Am I being a bit dramatic?  Possibly. However, I’ve yet to meet anything other than a rattlesnake that considers kudzu a friend.

I was recently showing a beautiful tract of land to a client.  Everything was going well until we rounded a corner and there it was – a gigantic kudzu patch that looked like it had been growing for decades.  Rightfully so, the client expressed concern with having this on the property.  He wondered if kudzu could be eradicated and if so, would it be in his best interest to do so from both a financial and land preservation perspective.  These great questions left me eager to learn more about this common yet mysterious annoyance that I had become somewhat complacent towards having grown up in the South. Where did it come from originally?  Did it have a purpose?  If destroyed, does it do more harm than good?  I’d always considered kudzu a foe…but could it be a friend?

Cultures in the Pacific Rim utilize the kudzu root in cooking, teas, and herbal remedies.  The history of kudzu in the United States began in 1876, where it was brought to the World’s Fair in Philadelphia from Japan with the purpose of controlling soil erosion.  Seven years later, the Deep South embraced it as a beautiful ornamental plant that provided excellent shade for porches during the sweltering summer months!  Mesmerized by the immediate benefits of this hearty plant many of our ancestors used it for livestock feed, fertilizer, honey, and even a potential source for bio-fuel.  The government embraced the kudzu “bandwagon” and paid folks to plant it.  By 1946, they estimated over 3 million acres had been planted throughout the country.  They soon realized that this “dream plant” was turning out to be a nightmare rapidly spreading up to a foot a day especially in the Southeastern states due to its drought- thriving indigenous nature.  It climbed up trees, shrubs, and anything in its path… like “The Blob” …blocking sun rays thus diminishing or eliminating all of the photosynthetic productivity of the plush greenery underneath. Any soil erosion it may have prevented was ultimately a moot point considering its path of natural plant destruction.

In 1953, the U.S. Department of Agriculture removed kudzu from their list of suggested cover plants.  It was not until 1997, however, that it made the Federal noxious weed list.  To date, it is believed that kudzu now covers close to 7.5 million acres in Alabama, Mississippi, Georgia, Tennessee, and Florida alone! In addition to being a nuisance, kudzu has a significantly negative economic impact throughout the United States.  It is estimated that power companies spend between $1,500,000 – $1,700,000 annually to repair power line damage caused by kudzu.  The U.S. Forest Service reports have a much more conservative estimate of approximately 227,000 acres of kudzu growing in our forests. Some estimates are that close to $300,000,000 of lost forest productivity occurs annually due to kudzu infestation.

So, what did I tell my client?  Not to automatically dismiss a property because of kudzu, however, be sure to estimate the cost and time involved with controlling it.  County extension offices are typically equipped to assist landowners in determining the best plan of action based on their specific needs and location. Here are some of the most commonly used techniques for controlling kudzu on private land:

  • Mechanically:  mowing or cutting the vine back to slightly above ground level.  Kudzu debris should be completely removed then burned to prevent regrowth.  Another mechanical method involves completely removing the root crown by using a shovel to expose the base and then an axe to sever the root just below the crown.
  • Chemically: applying herbicides once at the beginning of the growing season (May) and then again in late summer or early fall. To completely kill the plant, plan on spraying 40-80 gallons an acre bi annually for a few years.  Tordon and Triclopyr are common herbicides used to eradicate kudzu.
  • Naturally: enlisting the help of animals to graze the kudzu.  Many use a small herd of goats or sheep to help in the battle.

Kudzu. It just goes to show you that something that started way back in 1876 as a clever idea to control soil erosion turned out to be a foe at best, “The Blob” at worst, and most definitely not a friend.

About the Author: Eric Leisy, ALC, is an avid outdoors-man, freelance outdoor writer, REALTOR® & Land Specialist for Great Southern Land Co.

sage grouse

Sage Grouse Management in the News

I read the recent article noting that our new Secretary of the Interior was directing mangers of the public lands to include flexibility in their plans to improve on sage grouse habitats. This, and in other articles I have read, continue to reference “livestock grazing” as one of the reasons for the decline of the sage grouse. In one article, they cite the main reasons for the decline of the sage grouse: “In 2013, the FWS identified 14 threats to the greater sage grouse: nonnative invasive plants, energy development, sagebrush removal, improper grazing, range management structures, wild horses and burros, pinyon-juniper expansion, agricultural conversion, mining, recreation, urbanization, infrastructure and fences.”   Interestingly enough, they always leave out the one reason that probably has the most impact on sage grouse populations and that is “Predators.”

We have more predators of the sage grouse now than ever before and still most will not recognize them as a major factor. One predator in particular whose population has grown by a thousand percent is the raven. University studies since 1948 have shown ravens as major predators of ground nesting birds and a 2003-2005 study “The Effects of Raven Removal on Sage Grouse Nest Success” by Peter S. Coates and David J. Delehanty of Idaho State University confirms the benefits of taking Raven’s out of the picture for improved nest success.

sage grouseWhy not give credit where credit is due? Some believe it is because controlling predators won’t give the public lands managers the control on other resource users that using “critical habitat” does.  There are organizations in the West whose main goals are to interfere with livestock grazing on public lands. In Idaho, they are trying to have dirt tanks (ponds created to store water for livestock) filled in because they are used as breeding grounds by mosquitoes since they are carriers for the West Nile disease which is found to also kill sage grouse.  Any of us who spend a lot of time in the habitat will tell you that these same ponds are frequented by many species of wildlife that benefit from them, just a livestock do.

Many argue that there has been entirely too much time and money spent on improving “habitat” for sage grouse. Historical records indicate there were very few sage grouse in the Great Basin before man settled. The journals of early day settlers such as Peter Skeen Ogdon (1828-1829); Jedediah Smith (1827); John Charles Fremont (1843-45) pay a lot of attention to wildlife and the diets of the native American’s they encountered.  In all these journals, there was one record of sage grouse found as a diet item (RE: testimony of Nevada Assemblyman Ira Hansen 2011). In the meetings in 2012, when the U.S. Fish and Wildlife Service (USFWL) was conducting a hearing on the potential listing of the sage grouse, they noted that they were using as a starting point the mid 1800’s and the areas they identified as sage brush areas at that time.  They were also using a two-million bird prediction based off that number of acres of sage brush.  In other words, the number of Sage Grouse being managed for is based on poor data that is not substantiated by historical records.

Livestock grazing can actually be a benefit to sage grouse and, if you look at the records, you will see that at the same time we had the most livestock on public lands is when we had the largest sage grouse populations. I believe mainly for two reasons:  first, we had an active predator control program at that same time; and second, over grazing of grass species allows shrubs to encroach onto those areas being overgrazed.

Livestock grazing kept the excess fuels down and we had fewer range fires. Managing for grass required leaving excess grass to reseed and I can tell you we have a lot more grass now than when I was a kid in the 1950’s and 60’s. In those days, we didn’t have government fire centers that did the firefighting, we did it ourselves. All the ranchers and other county residents would drop what they were doing when a fire started to put it out. That meant bull dozers being loaded and put on fire lines, it meant filling barrels with water, grabbing soaked seed sacks to slap out flames, and not stopping even at dark.  In fact, we usually got the fire under control at night as the winds calmed down and the moisture content of the air went up. We don’t have forests to deal with so fighting fires at night isn’t much danger.  Unfortunately, even today, the agencies who now control firefighting shut it down at dark and wait until after their 7 am fire meeting is over the next morning to get back to it. Changing this one policy would keep the size of our fires down considerably. To their credit, however, this year they are getting on the fires much sooner that they have in the past.

In summary and in my opinion  a)the sage grouse are not at a low enough population level to justify being listed as threatened or endangered;  b) the Critical Habitat Provision of the Endangered Species Act is being abused to list species whose populations don’t warrant listing; c) Livestock grazing is not a negative to the sage grouse; d)Predators are not even sited as one of the main impacts on the population even though there are numerous studies that show they are a large factor; e)the agency’s policy of not fighting fires in the Great Basin at night has burned literally hundreds of thousands of acres unnecessarily. On the other hand, I just sold a 10,000 acre ranch I had listed for over eight years to be used for sage grouse meditation with federal agencies. Suave on the sore!

About the author: Paul Bottari, ALC, is Owner/Broker for Bottari & Associates Realty Inc. in Wells, NV. Paul serves on the REALTORS® Land Institute 2017 Government Affairs Committee.

Turning Your Land Into Multiple Sources of Cash Income

Hey Land Owners, What Have You Been Waiting For? Turning Your Land Into Multiple Sources of Cash Income is Easier Than you Think!

We live in the age of AirBnB and VRBO mania. Residential owners across the globe are taking advantage of the need for residential renting opportunities. They post their properties on listing websites like AirBnB or VRBO, and quickly turn their residential properties into piles of instant cash income. Guess what? Land owners can do this too! There is an enormous demand for private land use of various types, in which users are willing to pay. It’s time for landowners to get in on the money making action too.

The demand for private land use across our great nation is nearly immeasurable. Simply put, an exponentially enormous portion of the population has the desire or need to use private land for various purposes. As an example, in addition to being President and CEO of LandLeaseExchange.com, I am also Vice President of Maury L. Carter & Associates, Inc., a land investment and brokerage firm based in Orlando, FL. Our firm and our investors have owned hundreds of thousands of acres over a 50+/- year time frame. We currently have a portfolio of 12,000 acres.

Every year we get hundreds, if not thousands of unsolicited phone calls and email inquiries on the 12,000 acres in our portfolio. These inquiries are from individuals or companies searching for property to lease or rent. Again, it is important that landowners understand just how much demand there is for the leasing and use of land. We DO NOT market our properties for lease, yet we receive all of these unsolicited inquiries from users who are ready, willing, and able to lease a property.

Most of the land in our portfolio that we lease is conducive for production agricultural farming, cattle leases, citrus leases, timber leases, and hunting leases. These are fairly standard land leasing categories, yet they are just the “tip of the iceberg” when it comes to the possibilities available to landowners and how they can turn their land assets into cash revenue. The land leasing market has been identified as an extremely under-served marketplace. What am I saying? There are tens of millions of people in the U.S. that have a need for land, yet there isn’t even a small fraction of land available to them to do so. Enter the private landowner.

On the LandLeaseExchange.com side of things, I have many landowners say to me “John, all I have is (enter amount of land) acres, and there really isn’t much I can do with it to make money.” Really? I beg to differ. Each parcel of land is different and offers its own uses based upon its characteristics. Landowners don’t really need to get too creative, actually. They simply need to take advantage of the land they already own and provide leasing opportunities to users that are conducive to the characteristics of the land owned.

As land owners, we have to think outside of the box. We have opportunities that we take for granted, available to us RIGHT NOW on the land we own, that others are willing to pay to for to experience.

Here is a list of examples I have compiled. Remember, you can lease your entire property, or just a portion. For one use, or for many uses. No property is too big, or too small to turn into cash income.

Agricultural Opportunities

  • Do you have land that you aren’t currently using that could be leased for agricultural purposes? Whatever agricultural use your land is conducive for, the likelihood of someone wanting to use it for commercial agricultural purposes is high. Our website offers listing categories on anything from citrus to peaches to tomatoes to more traditional commodities like soy beans, corn and cotton.

Recreational Opportunities

  • Birdwatching, camping, equestrian, fishing, hiking, hunting, mountain bike trail riding, RV/Motor Home/Camper, Shooting, Off-Road Trail Riding/ATV/Motorcross, Waterfront properties, and more. Recreational use is one of the most desired uses for land right now.

Special Event/Corporate Retreats/Religious Retreats

  • Do you have an old barn you could clean up, hang some lights and rent for weddings or parties? Brides and grooms and party hosts want to create something different and unique while hosting their parties.
  • Corporate retreats – Does your land have activities available? Skeet shooting, hunting opportunities, adequate lodging amenities, meeting areas, etc.? Turn it into a corporate retreat and charge companies to use your property.
    Cabins, Rural Residences, Estates:
  • People want to have a getaway weekend or an experience on a farm, ranch or property outside of the city. Provide the opportunity to them by leasing out cabins, rural residences or estate properties.

Agri-Tourism Sites

  • Now, more than ever, people want the opportunity to get on land, see where their food is coming from, visit the farm and experience something outdoors and have a good time. What type of agritourism can you provide? U-Picks, corn mazes, pumpkin patches, vineyards, petting zoos, Christmas Tree U-Cut, etc.

Communications and Energy

  • Do you have a site that would be perfect for a cell phone tower?
  • Are you located near high tension power lines and you think your property would be good for a solar panel project?
  • What about a road, and your property would be good to lease to a billboard company?

All of the above are ideas on how to turn your land into cash revenue. As a landowner, what are you waiting for? Additional cash income is only a few clicks away!

 

About the Author: John Evans is a 2008 graduate of the University of Mississippi with a degree in real estate finance. A seventh-generation Floridian, he lives in Winter Park, FL, with wife Ann and son Jack, 1. He is Vice President of Maury L. Carter & Associates, Inc and founder, CEO and President of Land Lease Exchange, LLC. which is an online marketing tool that connects landowners to land users.

 

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new home residential land real estate

An Increase in Demand for Residential Land Real Estate

“Under All Is The Land,” starts the National Association of REALTORS® Code of Ethics. Whether a property is residential, commercial, or of a more rural variety, it all starts from the ground up—literally. With almost all properties needing land on some level, it’s no wonder the demand for residential land real estate continues to grow. As John D. Rockefeller once said “The major fortunes in America have been made in land,” and any land agent would agree that land real estate makes one of the best investments for that reason.

Let’s take a closer look at all the buzz about an increase in demand for residential land real estate. REALTOR® Magazine recently released a piece called “Best Year For New Construction In A Decade?” The article focuses on HousingWire’s prediction that “growing buyer demands will likely spark home builders to construct [more] homes this year than in the last decade.” In addition, the REALTORS® Land Institute released their annual Land Market Survey for 2017 which shows that 25 percent of all closed land transactions over the past year were for residential use. The survey also shows a 5 percent increase in total dollar volume of closed residential land transactions compared to the previous year, meaning the number of residential land transactions are up from the previous year.

residential land real estateEven those in the field are seeing it all firsthand. For example, in the article “The Evolution of Residential Land Sales in the Northeast,” recently published in RLI’s Summer 2017 Terra Firma magazine, expert Accredited Land Consultant Michael Durkin observed “Land prices [in the Northeast] are escalating higher and higher almost to the point of spiraling out of control.” As the demand for land continues to rise, it only makes sense that the prices of land will follow in the affected areas. In fact, RLI’s Land Market Survey showed a 2 percent average increase in residential land prices over the previous year and majority of respondents expect prices to continue increasing over the coming year.

So where are the strongest markets for residential land real estate transactions? The REALTOR® Magazine article points out that “The Midwest and Northeast will likely see the most uptick in new-home construction.” This prediction falls in line with RLI’s Land Market Survey results which show the Northeast leading in residential land sales. Survey participants also expect a three percent increase in residential land sales for the coming year; so, the future is looking bright as well!

All this information may lead one to question, why is there suddenly an increasing number of residential land real estate transactions? Lawrence Yun, the National Association of REALTORS®’ chief economist, explained in the REALTOR® Magazine article that “the increase in new housing would be a much needed relief to the overall housing market” which is currently facing a housing shortage.

Looking at NAR’s “2017 Home Buyer and Seller Generational Trends Report,” Millennials and Gen Yers make up 34 percent of home buyers and are currently driving an increased demand for affordable housing. On the other hand, Baby Boomers are the second largest group of home buyers making up 30 percent of recent buyers. The report also shows that overall 14 percent of buyers opted for a new home versus a previously occupied one, an increase over the previous year adding to the demand for residential land real estate.

In the end one thing is for certain, as the demand for more housing continues to grow, it only follows that the demand for more land will track up with it as will land values.

The annual REALTORS® Land Institute and NAR Research Land Markets Survey is a tool for land real estate professionals, owners, and investors across all sectors of the business to use for bench-marking and as an informational resource when conducting business. View the full survey here. Read more on this topic from REALTOR® Mag in their follow-up piece on this post “The Demand for Land Widens.”

Jessa Friedrich, Marketing Manager, REALTORS Land InstituteAbout 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 a Masters of Business Administration in Marketing with a specialization in Social Media. She has been with RLI in the land real estate industry for two and a half years and manages all matters pertaining to marketing and communications for the organization. In her role, she is dedicated to promoting and enhancing the valuable benefits of an RLI membership to the land real estate industry and ensuring RLI continues to be “The Voice of Land.”

The Value And Uses Of Pore Space As A Property Right

The Emergence of Pore Space as a Property Right

Pore space, although rarely thought about, should be viewed as just another private property right. Pore space is generally thought of as a subsurface property right. Although it can be defined in a number of different ways, pore space, by its simplest definition, is the empty space between grains of rock, fractures, and voids.

Until very recently, pore space was hardly considered a property right at all. However, the surge of interest in carbon capture and sequestration (CCS), as well as the need to store salt water produced by the oil and gas industry—as a waste product arising from oil and gas production and from hydraulic fracturing—has made pore space ownership an increasingly popular, yet extremely underdeveloped area of the law.

pore spaceLike most property rights, pore space ownership has evolved out of common law property rights, which are traceable to the old common law maxim known as the “ad coelum doctrine.” The ad coelum doctrine states “cujus est solum, ejus est usque ad coelum et ad inferos,” meaning “to whomever the soil belongs, he owns also to the sky and to the depths.”  Taken literally, the owner of the surface holds title to the entire tract from the heavens to the depths of the earth.  This form of ownership, although no longer as broad as it was originally, is the simplest and broadest property interest allowed by law, which is known as a fee simple interest.  Determining ownership of pore space is very straightforward when a fee simple interest is involved because the fee owner holds title to both the surface estate and the mineral estate.  However, once the fee simple interest is severed into differing estates and burdened with a variety of other property interests, determining pore space ownership can become a confusing and complicated issue.

There are two common ownership structures once the mineral estate has been severed from the surface estate: (1) the non-ownership theory, known as the “English Rule”; and (2) the ownership in place theory, known as the “American Rule.”

Application of the English Rule vests pore space ownership with the mineral estate—which is clearly the current minority rule within the United States.

The American Rule, on the other hand, “involves the severance of a mineral right from the interest in the whole geological formation.”  When applying the American Rule, the mineral estate owns the minerals beneath the land, but the geological formation, is owned by the surface estate.  The American Rule is currently the majority rule in the United States.

In addition, although the American Rule vests pore space ownership with surface estate, the mineral estate still has the right to explore and remove minerals from the land, which allows a mineral estate the right of reasonable use of pore space for mineral exploration. As a result, in states applying the American Rule, it cannot simply be said that pore space belongs solely to the surface estate. It must also be determined if the reservoir has been depleted of minerals because until depletion occurs, the mineral estate still has a right to use the pore space.

We researched pore space law in Arkansas, Colorado, Kansas, Kentucky, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Texas, Wyoming, Michigan, Louisiana, New York, and West Virginia to determine if there is a trend towards vesting ownership of pore space with the surface or mineral estate. Six of the states were undecided, four states have a clear statute vesting ownership with the surface estate, four other states have case law supporting surface estate ownership, and one state had a case arguing pore space could be owned by the mineral estate.

As such, landowners should be mindful of the following legal and practical considerations associated with their pore space rights. Landowners, and those representing them, must be cognizant of how title to pore space can be modified through various contracts, easements, litigation, releases, and other agreements landowners routinely enter into.

Legal and Practical Considerations of Pore Space Rights

Valuation of Pore Space

As surface owners become more educated about pore space ownership and as technology advances, it is highly likely that operators will need to acquire rights to the pore space in order to engage in directional drilling or inject wastewater in areas outside of the drilling units. Yet, placing a monetary value on pore space can be just as complicated as determining ownership. For instance, valuation of pore space will likely be difficult to determine as it will depend on the particular use and what the user is willing to pay as opposed to the actual value of occupation.

CO2 Sequestration

As previously mentioned, pore space can be used for carbon capture and sequestration (CCS). CCS can potentially remove eighty to ninety-five percent of the CO2 emitted from power plants.  Studies have also indicated that global sequestration capacity in depleted oil and gas fields is substantial, with the capacity to store 125 years of current worldwide CO2 emissions from fossil fuel fired power plants.  Although CO2 is routinely injected into subsurface pore space in an effort to aid in the recovery of oil and gas, and though large-scale sequestration sites have been identified within the United States, there are currently no large-scale, commercial sequestration projects underway in the United States.  Still, pore space owners should be mindful of the opportunity and their right to use depleted oil and gas reservoirs for CO2 sequestration.

Underground Natural Gas Storage

In addition to CO2 sequestration, pore space also has the potential to be used for underground natural gas storage. Natural gas, unlike oil, is more easily stored by re-injection into underground rock pore spaces, which are typically geological formations or common sources of supply whose pore spaces formerly held producible hydrocarbons that are now substantially depleted.  In some states, surface owners retain the right to depleted geological formations and; therefore, should request compensation for storage of natural gas in depleted geological formations, and for injection of wastewater produced from out of section wells.

Subsurface Trespass

In additional to potential uses for pore space, pore space owners should be aware of the high potential of a subsurface trespass.

Traditional Oil and Gas Subsurface Trespass

The most obvious example of an actionable trespass in this context is a directional well that bottoms out under neighboring property.  This situation gives rise to an actionable trespass due to the well-established principle of property law that prevents the use of the surface to support mineral extraction activities on other lands.  However, operators can avoid a trespass situation by seeking an appropriate release from the pore space owner.

Hydraulic Fracturing

A subsurface trespass can also occur during hydraulic fracturing. However, courts tend to rule that an injury must occur in connection with the subsurface trespass as hydraulic fracturing prevents underground waste of hydrocarbons by allowing its recovery from tight reservoirs that would not otherwise be productive and thus, meets an important social need.  Although this reasoning wisely protects the well-established and necessary practice of hydraulic fracturing, it also gives an inference that courts may be reluctant to find a subsurface trespass of pore space as a result of hydraulic fracturing.

Secondary and Enhanced Recovery Operations

Secondary or enhanced recovery operations are used to maintain or increase production of a well once the reservoir’s natural production decreases.  Although states often recognize secondary or enhanced recovery as a valid public interest, trespass issues can arise in instances when an operator injects a substance, such as salt water, carbon dioxide, chemicals, or natural gas, into the subsurface of its own property in order to increase production and the injected substance invades the subsurface of the neighboring property.

Generally, when secondary recovery is involved, it appears that most courts are unwilling to find the migration of wastewater onto neighboring properties to be a trespass. This is likely because secondary recovery is in the best interest of the public and industry. With that said, there appears to be no clear case law challenging this logic specifically in the realm of pore space.

Wastewater Injection Wells

Wastewater injection wells can be associated with subsurface trespasses. In this situation, a subsurface trespass occurs when fluids from a wastewater injection well migrate beyond the legal surface boundaries of operator’s rights. It is likely that the operation of many wastewater injection wells result in the subsurface trespass of pore space to some extent, as common sense says that when a commercial wastewater disposal operator only owns one acre yet injects hundreds of thousands of barrels of wastewater into a wellbore on that one acre, the wastewater is migrating to an area outside of that one acre. However, that being said, it would be difficult to prove. Nevertheless, pore space owners should always be mindful of wastewater injection wells near their property and the potential for that wastewater to migrate onto their property. As the law on pore space develops, surface owners may seek compensation from these commercial wastewater disposal operators or may even try to prohibit the injection.

Conclusion

Evaluating pore space as an underground property right should be considered in every land deal. The development of pore space as a valuable property right is an increasing area of consideration for REALTORS®, title examiners, landmen, policymakers, attorneys, and judges. As such, it will be increasingly important to consider the implications every deal may have on this emerging area of the law.

For a more in-depth analysis of pore space, you can download a copy of the 2015 thesis and other writings on the topic by visiting www.LandownerFirm.com.

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

About the author: Trae Gray is a Mediator, Entrepreneur, Lawyer, Speaker, and Expert Witness with specialized expertise in ethics and natural resources. With a nationwide practice he is listed by Super Lawyers and The Top Trial Lawyers in America as a Lifetime Member of the Multi-Million Dollar Advocates Forum – something that is achieved by less than 1% of U.S. lawyers. More can be found online at TraeGray.com.

 

About the author: Ryan Ellis, a partner with LandownerFirm, is a legal research and writing specialist with specialized expertise in Class Action, Environmental, Energy, and Natural Resource legal matters. She graduated with honors from the University of Tulsa College of Law where she completed the Sustainable Energy and Resources Law Program, which offers one of the most advanced energy, environmental, and natural resource legal educations in the nation. More can be found online at LandownerFirm.com.

A Passion for Ranch Real Estate With a Hint of Equine

This piece was originally featured in LAND Magazine.

Driving down a Texas highway north of the Dallas Fort Worth metroplex, you see one horse ranch after another. Visitor’s think, “I Wonder why all these horse ranches are here?” The equine enthusiast thinks, “Man I wish I could live here!” The equine industry has exploded in the North Texas corridor traveling north on Highway 377 leading out of the D-FW metroplex from Aubrey to Whitesboro. It is a constant draw for all aspects of the equine industry. There are days the trucks and trailers outnumber the cars, from the normal bustle of horsemen and horsewomen hauling their horses to a trainer, a vet, another farm, to a lesson, delivering a sale horse, buying a horse, riding with a friend, going trail riding, moving mares to another farm, competitions and even the traditional life of just going to check and gather cattle.

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North Texas and southern Oklahoma have become popular locations for the equine industry.  For years Aubrey and Pilot Point Texas were considered one of the most highly esteemed equine areas in the United States. At that time the growth of horse ranches was moving north up the Highway 377 corridor. Now the entire corridor from Aubrey to Whitesboro is populated with horse ranches. This attraction has been going on for some time. “What is it that attracts the horsemen?” you ask. The three main draws of the area for the equine community are sandy loam soil, climate and proximity.  

Sandy Loam soil is a must if you are a horseman moving to Texas. If a person isn’t knowledgeable about soil they can be fooled by location. The Sandy Loam Corridor is only thirty miles wide and runs from the Red River in Cooke and Grayson Counties, south two-hundred miles. The eastern boundary of the sandy loam soil is just a few miles east of Highway 377 and can turn to black land very quickly. The black land is good for farming but most horsemen don’t care for it and will insist on the sandy loam. The sandy loam has such great density and base that after heavy rains the soil will dry quickly. The density and base of the sandy loam soil is what makes it so incredible for footing in a riding arena and also a great composition for growing Coastal Bermuda grass. Coastal Bermuda grows best in sandy loam as it is drought tolerant and can handle heavy grazing and close defoliation. It is also the most economical forage to feed as it is readily available and the next step up in protein value is alfalfa which nearly triples in price.

Climate is another reason so many equine enthusiasts have moved to Texas. They come from all over the United States, possibly where winters are harsh and harder to keep horses trained and ready for competition. Winter in North Texas is inviting with average high temperatures in the fifties and average low temperatures in the thirties. However, there is that occasional snowfall or ice storm that will bring us to a standstill; but, never fear, the sun generally comes out and temperatures rise again in a timely manner.

Location! Location! Location! Many of the largest equine breed shows and specialized events, not to mention race tracks, are located in Fort Worth, Oklahoma City, Tulsa and surrounding areas. All of these cities are a reasonable driving distance from North Texas and on any given weekend you will find breed shows, reining, cutting, halter, working hunter, barrel racing, roping, cowhorse, mounted shooting, team roping, rodeo, racing and ranch horse versatility events at one or all of these outstanding facilities. The proximity makes it an easy day trip to spectate or compete! In November and December these facilities hold some of the most prestigious events in the Western Equine industry hosting the American Quarter Horse World Show, American Paint Horse World Show, Appaloosa World Shows, National Reining Horse Futurity, National Cutting Horse Futurity and the National Barrel Horse Futurity. That is two full months of outstanding competition from the best in the industry.

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During the fall, in these major events, you will find that the international presence is overwhelming. Nationals from Japan, Brazil, Australia, all of Europe and more will travel to the Dallas-Fort Worth area to spectate and also make purchases, both from the equine and retail side of the industry.

The Dallas/Fort Worth International Airport is within seventy miles and an easy drive for those flying in or out of North Texas. Equine buyers, both international and domestic, will fly to Texas to look for their next great prospect or show horse. The horse population in North Texas is unsurpassed. A serious buyer can leave the D/FW airport and drive in a one-hundred-mile radius and access Weatherford, Gainesville, Whitesboro, Tioga, Pilot Point, Aubrey, Denton — and all points in between — to view all the horses that they want in a day!

The breeding business is one entity of the equine industry that keeps traffic flowing. Each breed and discipline are well represented by world-class stallions and producing mares. The pedigrees and records from the breeding progeny are exceptional. Outstanding breeding derives prospects that are of the highest quality for sale and creates even more traffic. Equine breeding and training entities go hand-in-hand as many of the popular stallions and mares are still being shown successfully. With the modern-day technology of embryo transfer, mares can continue to be successfully shown and have recipient mares carry their embryos, which is a very big business in the area.

Horse trainers in Texas are considered to be some of the best in the world. Enter any given barn and find numerous trophies and buckles on display for World Champions, Futurity Champions, Derby Champions, National Finals Rodeo Champions, and the list goes on. The combination of horse trainers and North Texas’ amenities draw owners along with Non Pro, Youth and Amateur competitors, from afar to be a part of the equine community.

The reasons for wanting to be — and the types of people who want to be — part of this area are endless. Horse trainers who move to the area from other states will also have a following from their customers who will also make the move and buy property. Many horse owners are retirees who still have horses to compete or breed with. People who work from home will relocate to get closer to a trainer or the community. Many will purchase a second home for a place to stay when they come to ride with their trainers.

The equine industry is paramount to economic development in so many ways that have been unrecognized by society. Along with successful equine industry you have the supporting services that makes the industry successful, including but not limited to farriers, veterinarians, feed companies, tack stores, clothing stores, truck and trailer sales, and of course Realtors!

Another reason that people covet the North Texas area is the sense of community and fellowship. There is nothing like being able to share your love of horses and the sport with your neighbors and friends who appreciate and understand the industry. Many times your neighbor may have an interest in a different equine discipline since the equine industry is so vast. However, it’s the camaraderie that makes it fun to “cheer” for your neighbor. Horsemen stick together through thick and thin, win or lose. It’s knowing that if you need help your neighbor is there to help and they know horses. It’s the cowboy way of life!

I moved to Whitesboro, Texas nineteen years ago as a professional in the equine industry. I worked at a ranch as a trainer, breeding manager and ranch manager. I love the equine industry and I am still active as a professional judge for the American Quarter Horse Association, American Paint Horse Association, National Reining Horse Association and the National Snaffle Bit Association, along with being a Professional Horseman with AQHA.

I have been a REALTOR®, with Ebby Halliday REALTORS®, for the past nine years and work primarily Farm and Ranch sales. I have my own horses that I raise and show and enjoy them immensely. I will always be a part of the Equine industry that I love as a horseman and a REALTOR®. They go hand-in-hand for me today. Peers from the equine industry respect me for my knowledge in real estate. My experience has helped me become an expert in farm and ranch real estate as I understand the function of land and structures that horsemen are looking for. My true passion is ranch real estate with a hint of equine.

As my brother-in-law, who is a native Texan, says, “She wasn’t born here but she got here as fast as she could!”

lisa-moden1_bcAuthor bio: Lisa Moden is a prestigious Accredited Land Consultant of the REALTORS® Land Institute and has been a Broker for Ebby Halliday REALTORS® for over nine years.  Lisa’s experience and passion for equine has helped her become an expert in farm and ranch real estate. In addition to farm and ranch, she also specializes in lake properties and investment land.