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Top Tips for Owning/Managing Agricultural Land

To get started, we need to show the variances in agricultural land. Several types of land fall within the bounds of “ag land” and we need to simply define these as follows:

LAND TYPES:

  1. Farm – used for growing crops on an annual basis, ie: corn, soybeans, cotton, and wheat.
  2. Ranch – used for grazing of animals for meat production or hay production.
  3. Vineyard – Production of grapes for wine, raisins, or juice.
  4. Orchard – Multiple types, ie: oranges, peaches, lemons, and apples. Also, whole fruit or nut production, ie: pecans, almonds, walnuts, etc.
  5. Timber – Production of timber for uses like lumber and paper.

Agricultural land is used for its ability to produce products that are used in our everyday lives. Timber is cut to produce lumber to build homes as soybeans are grown to produce feed for animals to eat. Without our agricultural production, human life would cease to exist. Keeping our investment, the land, producing at its highest ability, we must manage the variables that we can. Several factors affect production:

  1. Weather
  2. Insects/Disease
  3. Urbanization
  4. Government Regulation and Deregulation
  5. Fertility/Weed suppression
  6. Fallow (idle, neglected)

With all the factors we have to manage, weather is the largest factor, in my opinion, affecting the production of any type of ag land. Snow, droughts, floods, winds, hail, hurricanes, etc. all wreak havoc on properties across the United States. Managing weather is tough, but knowing the limitations of your program and planning for these types of events are crucial in effectively managing land. Feeding cattle before a large snow event or using no-till farming in highly erodible areas are some types of preventive measures growers can take to prepare for adverse weather.

Land also is affected by other natural elements like insects and disease. Insects affect production globally every year from bowl weevils in cotton to pine borers in timber plantations. All insect infestations can be detrimental if not taken care of in a timely matter. Many application methods exist from aerial to ground, but someone with professional experience and licensure should always be involved. Never apply chemicals without looking into the regulations that are in your area. Diseases are common in many ways from rust fungus on wheat to stomach worms in cattle. Also, keep in mind that a professional will be needed when looking into treatments for diseases accompanying ag production.

Urbanization is becoming an increasing concern for ag land that is situated around large cities. Many vineyards are currently dealing with large cities growing and their increased need for water resources. Some are also experiencing travel problems with large equipment as well as growing land prices because of land transitioning from ag use to commercial use. These are pertinent problems that have to be managed because of the direct financial impact they can cause to your bottom line. Managing this factor is tough and can sometimes cause relocation, or can result in change of crops with associated equipment. In the cattle business, it can cause problems with transportation, feeding, fly control, and keeping animals in pastures out of neighborhood yards. A land manager needs to carefully plan years in advance for this is something that we, as growers, can’t stop.

 

Government de/regulation is always something to consider because of our ever-changing legislation.  Some areas see the banning of chemicals that are crucial in controlling insects and weeds. A constant look at current issues, as well as reading and staying close to your legislator, will be the best way to stay ahead of the curve on these issues.

Fertility and weed suppression are another problem that we see in our ag land properties. Poor management of crucial micro/macro nutrients in farmland are detrimental to a farm in continuing production. Another example is weed and grass control in an orchard. Tall grass and weeds use water and without proper control can cause production loss. Management of fertility and weeds is always a factor that can contribute to production loss. However, with the proper professional oversight this can be avoided.

Fallow is a factor that affects ag land in two main areas.  One, continued growth and unmanaged land can cause grounds for breeding of insects and also fuel fire conditions. Insect infestations like we have seen in the south with the aphid epidemic were less in areas where fallow ground was least. Insects need cover to nest and hatch, and large growth can house and help multiply insects for several different crops. When we see the large fires in the west almost all the time, these are well fueled underbrush from mismanaged timber areas. Controlled burning, shredding and plowing can reduce the kindling needed for large scale fires which with proper care your property can be protected from wildfires.  Another thing to remember is there is an equal balance that the manager needs to follow.  Work closely with conservation and extension agencies in your local area to figure out where your equilibrium exists.

Solution

Find a qualified professional, do not go at this alone. You do not use a dentist to do your open-heart surgery, so why would you use advice from an unexperienced land professional, or worse an agent with no experience in land.  The Realtors® Land Institute has a search tool to help you find professionals in your area to help you make these kinds of decisions as well as manage and implement ideas for your specific property. Accredited Land Consultants are just that, they consult based upon years of experience and training from working in the land business. I have numerous clients I help on a weekly basis with finding the right tenant for their farm to helping them find a dirt contractor to build the next bass lake on the ranch. On the ground experience and superior training make the Accredited Land Consultant the perfect professional to rely on.

This post is part of the 2019 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here 

About the Author

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.

 

land real estate

Land Brokerage Relationships You Need

Land and decisions about its ownership or stewardship of it, have been a defining factor in the history of the United States. The promise of having a stake in the land brought so many to our shores. LAND, that one asset, is highly diverse, uniquely fixed, and limited in supply… 

“Land is the only thing in the world that amounts to anything, for ‘tis the only thing that lasts, and don’t you be forgetting it! ‘Tis the only thing worth working for, worth fighting for, worth dying for…”  –  Gerald O’Hara to Katie Scarlet, GONE WITH THE WIND

RELATIONSHIPS ARE KEY IN LAND BROKERAGE

As you establish yourself as a Land Broker, one of a select group of people who are willing to brave the elements and ford the streams, my best advice to you centers around RELATIONSHIPS. These important associations will help you today and over the years in your career of land brokerage. The depth they will provide to your practice will help you establish yourself as a Land Expert. Build this team and be loyal to them, and demand loyalty back! If you cannot call them when it may be inconvenient to them from time to time, find someone else to work with. As with most businesses, team effort is essential.

There follows a list of members you would do well to identify for your team in the land brokerage business. Try to find three folks you can work with in each category, but be sure to find at least one. These contacts will help you to know your market and the players in it.

LAND APPRAISER. Identify and meet with and interview this important member of your team. Talk with him or her about the average sales prices of lots and acreages. Keep track of this as you continue to keep in touch with this individual and chart it.  This information is all-important as you evaluate land in your market. This information can support that you obtain from your local MLS system (if you have one). Be sure to use the MLS to chart the land currently on the market, too. Also ask your land bankers, they know about deals that didn’t go on the market!

LAND BANK. The land bank is very important in the land business. Here’s why: Down payments and interest rates. Any property over five (5) acres (with or without a home on it) is considered “non-conforming”. Conventional lending services will make a loan on vacant land, however they want 20 to 50% down. On the other hand, the Land Bank asks 15% down on a 20-year program. (This program is based upon demographics, so your market area may not apply.) Note: Most Land Banks have in-house Appraisers. Check with your local Farm Credit and get to know those loan officers. They are a wealth of knowledge.

investment

ATTORNEY. Who can do business without a good attorney these days? Interview as many as you can find who specialize in land transactions. Talk with them about land, what they think about it, what brought them to specialize in land transactions, and how available they can be for you and your clients.

Try to identify at least three (3) attorneys you can work with and recommend to your clients. Remember, a land attorney should be very knowledgeable in subdivision laws, easements, timber contracts, mineral rights, extensive title searches, and land financing. There are definite nuances in the land business and your attorney needs to know about them and be available for consultation, even at night.

CPA/ TAX ACCOUNTANT/FINANCIAL PLANNER.   There may be tax consequences in all land contracts. These professionals can help you identify them and can be a valuable resource to you and your clients especially if they specialize in 1031 Like-Kind Exchange work. They can explain how to figure the “tax basis” in your transactions.

SURVEYOR. A surveyor is a big help in determining the “highest and best use” of a property. Do the same thing with surveyors as you did with other team members. Take the time to interview and select as those you enjoy working with and can recommend to your clients.

Be sure the surveyor is up-to-date on zoning and subdivision laws in your market area. Find at least one who not only is available, but will work with you. That is important. I call my surveyor at night if I need to.

land surveyor

ENVIRONMENTAL PROFESSIONALS. Take the time to get to know your environmental health department professionals. Be sure to meet and spend time with the Health Department Director and Staff. At a minimum, learn from them:

  1. How to set up a septic system
  2. How to fill out septic applications; and
  3. How to understand and fill out well permits.

In addition, 1) learn how to do your own soil analysis, 2) know how to get a water sample if a property has existing well or wells, and 3) get copies of soil maps and system application forms so you will have them handy when needed. In a rural land transaction, the septic permit is all you need to close. Remember, the septic permit may take 2 to 4 (or sometimes more) weeks to obtain, so be sure to start the process as soon as you are under contract.

SOIL SCIENTIST. Soil scientists are an invaluable asset to your team because they can approve sites that a Health Department cannot. They can suggest alternative systems (probably considerably more expensive) and even override a Health Department decision.  Most counties do NOT have a soil scientist on staff, so you will need to do some detective work to find and establish a relationship with at least one. A soil scientist can teach you how to evaluate soil, a lesson well worth learning.

ALC Shadow over dirt

SEPTIC SYSTEM INSTALLER. In the land business, where septic systems are common, what would your team be without at least one reliable septic system installer on board? Identify and interview several and select those you can work with and refer to clients.  From your contacts, learn the different types of systems, their costs and how they are laid out. Go to an installation site and observe for yourself first-hand how the system is installed. Support your own research with a collection of information and brochures from various manufacturers whom your installer can recommend.

WELL DRILLER/CONTRACTOR. A poorly built or maintained well can allow pollutants to enter water directly. The closer the well is to sources of pollution, the more likely the well will become polluted. For instance, if the well casing is cracked and pesticides that are being mixed near the well are spilled, the pesticides can easily leak into the well and pollute your drinking water, so it is essential to take the time to get to know a certified well-driller in your area. A good place to start to look for a well driller is your State Division of Water Quality.  Once you locate reliable resources, and identify those you will want to work with, find out about their pricing structure (most charge by the foot) and get basic knowledge like the typical depth of a well in your area, and now to chlorinate a well.

Your regional DENR Groundwater Section office, county health department or local Cooperative Extension Center can be a valuable source of information on the following topics: New well or spring construction and site selection,  well inspection and maintenance, Certified well drillers, Unused well abandonment, Construction records for existing wells ,Well water testing including— – Advice on appropriate tests to run, – List of certified testing laboratories, – Assistance interpreting test results, – Health risks. Your local Cooperative Extension Center can also provide information on:  Backflow prevention, Water pollution and health risks, Water treatment devices, Groundwater.

COUNTY/CITY PLANNING BOARDS.  Attend meetings of your local board. You will gain invaluable knowledge and insight which you can share with your clients. Get current copies of zoning laws, subdivision laws, zoning maps, flood plain maps, and other information that will be of help to you. Know of plans for the future including zoning changes and annexations, as this will help you anticipate the market. Learn how to establish a new street name and address.

MAPPING STAFF. Get to know the mapping staff in your county. They can help you to identify property, property owners, provide tax maps, topographical (topo) maps, and aerials of property. (Most counties now have GIS systems.) The mapping staff can teach you how to use these tools if you take the time to establish a relationship with them.

REGISTRAR OF DEEDS STAFF. Get to know the folks at the Registrar of Deeds Office. They will help you do your own title search and do the research to discover anything that may affect the title or value of the property including: any type of easement, encumbrances, mineral rights, timber rights, and so forth. Remember: ALWAYS get a copy of the Deed or deeds involved as you do your research. Do not rely on the attorney to do this for you. You are the expert and responsible.

TAX ASSESSMENT OFFICER.  Take time to go to meet the tax assessment officer. Such individuals are helpful in understanding what has sold and trends in sales beyond MLS date.  My agent furnishes me leads from time to time. This member of your team can be an excellent resource and most Realtors do not use them, so you can stand apart if you do.

TIMBER EXPERT. Professional Forestry services can help you as you identify the “highest and best use of the land” and a timber expert is an excellent addition to your team. That person can help you remember which tree is which, learn how to identify prized trees, learn how to “cruise” timber, provide a “certified cruise” and basically learn how the timber market works. You need to know about or how to figure board feet, how a timber contract works, and how to auction timber. TIMBER IS CASH. Your client actually can buy land with a timber contract, cut the timber, and still own the land with no out-of-pocket money. Being able to evaluate timber will help you price land.

timberland real estate

ROAD BUILDER. The construction business has become a more complicated one as environmental and safety rules proliferate and methods and equipment become more sophisticated. The increased complexity of the field makes planning jobs even tougher than before Road construction, grading, concrete work, retaining wall construction and taking preventative measures, which are cheaper than curative ones, can reduce the risks of landslides and increased soil and water erosion. Your road builder can tell you about the importance of aligning a road along a ridge, especially with a south-west aspect, and how it helps to avoid water drainage problems, avoids exposure to excess moisture and frost, and uses sunlight to keep roads dry. Ask him or her about phased construction, such as gradually increasing the width of the track, avoids having to manage large amounts of excavated material and allows for the natural compaction of earthwork by rain.  Road building is a complicated effort and you will want to add a seasoned road builder (or more) to your team. They can let you know the cost of putting in basic access roads to state-specified built roads. This will also help you on a break-up evaluation.

CORPS OF ENGINEERS/SOIL & WATER/ENVIRONMENTAL PROTECTION AGENCIES. All these government agencies are resources for you and may well be involved in any land development project in which you are involved. Get to know them and what services they provide.

LAND CONSERVATORY. Identify the local Land Conservatory decision-makers. They may be aware of purchase programs and incentives that may purchase your listing or a part of it. Tax benefits at the Federal and State level may aid in your sale.

UTILITIES PROVIDERS. Contact the utilities providers in your area including telephone, power and cable. Know who they are, what their service area is, how they work in terms of applications and so forth, what their charges are (if any) for new service, or moving a pole or poles and possibly create a hand-out with this information you can supply to your clients.

utilities

LAND BROKERAGE TOOL KIT

These are must items to help you become a LAND EXPERT if you use them.

  • 300’ tape
  • Surveyor’s flagging tape
  • 4’ surveyor’s stakes
  • Small hand sledgehammer
  • A handful of 10-penny nail (Who is holding the dumb end of the tape?)
  • Machete
  • Really good walking/hiking shoes
  • Beverage container you can wear
  • Insect repellant
  • Professional compass
  • Hand auger
  • Scale ruler
  • Digital camera w/ extra disc
  • GPS locator
  • Calculator
  • Area maps
  • Topographical maps/ aerial maps of subject and adjoining properties
  • Septic/well permits application forms
  • Think about what else you may want to add to this list!

You also may want to contact Ted Turner.  He is the true lover of land. He now is the largest private owner of land in the United States.  He owns over 2,000,000 acres of land.  Does he know something we should know?

Now you are ready.  Happy land brokerage and good luck!

© Lou Jewell, Accredited Land Consultant 2004

Lou Jewell, ALCAbout the Author: Lou Jewell, ALC, has for over twenty-five years has provided expert experience in rural markets in Western Piedmont North Carolina and Southern Virginia. He has over 1,000 successful transactions and has developed over sixty rural subdivisions. A member of the Realtors® Land Institute since 1998, he achieved the prestigious Accredited Land Consultant (ALC) Designation in 2004 and is one of less than 500 ALCs in the United States.

 

 

How and Why To Invest in Farmland

OVERVIEW: INVEST IN FARMLAND

From the beginning of time, farmers have been an integral part of feeding the public. Many technological changes have impacted the farming industry, from the invention of the plow to more modern advances, such as GPS technology, irrigation, and drought-tolerant seed varieties. Many facets have changed but one has not, the dirt. Investing in land is a “simple” process of purchasing property and creating value through: revenue, appreciation, or tax benefits. Although it sounds that many “simple” investors don’t understand the difficulty in selecting properties that make sense for their investment goals when they invest in farmland, for example investing in farmland for retirement.  Listed below are a few short items to look at before investing in farmland.

FIND A PROFESSIONAL

 

Many investors both large and small make the mistake of not employing a professional that has the knowledge of the industry/market and can care for their money. Many times, throughout my real estate career, investment experience and as a farmer myself, I have seen investors not use the correct professional with knowledge of the land. When looking to diversify with farmland, seek a real estate professional with historical and proven confidence in the area.

Accredited Land Consultant land transaction expert farmland

Typically, land professionals are part of organizations like The Realtors® Land Institute where land is the single most asset class, they deal in. To go further, Accredited Land Consultants are trained and accomplished in the industry, of which only a few hundred agents have acquired the designation worldwide.  I use the quote, “I will not go to a heart doctor to get my hip replaced.” A Realtor® who sells homes in an urban area would not have the specific expertise to know the farm and ranch industry and understand the investment quality of a property. A farm and ranch real estate agent would not know about condominium prices in downtown. Use the Find A Land Consultant tool and look for an ALC Designated agent (see why) to make sure you are using a qualified land professional.

BENEFITS

One of the best benefits known to investors is the ability to have land as a tangible asset when you invest in farmland. This is especially important when a portfolio is heavily invested in the stock market.  Another benefit we see in farmland is the tax deduction in relation to depreciation.  Many farms contain improvements that depreciate such as grain storage, irrigation pivots, shops, barns and etc.  An owner can depreciate some of these assets each year to offset yearly taxes.  Always ask your favorite CPA for more information.

invest in farmland

“The United States has some of the best potential farmland for investment…”

Another great benefit to owning farmland is the ability to lease, farm, or share crop your property, to make money.  The value of farmland has increased over the last several years due to an increase in demand for food and fiber globally.  The United States has some of the best potential farmland for investment because of our democratic government and the infrastructure it possesses; ie, railroads, rivers and highways. Other countries have very fertile soil but have no roads to deliver products to a port, and it makes for a hard harvest.  Also, some foreign countries have great land to grow crops but have a corrupt government and/or the state owns all the ports of exchange.  Not all international investments are bad, they just can be more volatile than the U.S.

SELECTION

When selecting a farm to purchase an investor needs to keep three simple points in their process.  Do I have the capital to make the investment? Do I feel comfortable in a long-term project? Can I leave emotions aside when purchasing/selling?

  1. Knowing your buying potential, aka how much can you spend, is key when purchasing farmland. Some investors move capital into property with no debt and many move some capital and acquire debt through lenders.  Lenders are everywhere and, in my opinion, choose a lender that understands farmland and its characteristics.  There are options for government loans through the USDA and other government entities as well.  Consult your land professional to direct you to lenders that can help.
  2. Farmland investing for the most part is a long-term project. Many investors buy land and hold it for extended periods of time to get the most return.  Many large investors may hold land for as long as 10+ years to see the returns.  The farm economy goes in cycles much like the economy, which as a whole goes up and down.  To see real potential in farmland, one must be ready to hold on through at least 5+ years.
  3. Emotion is always on the table when it comes to tracts of land. Throughout my career I have fallen victim to getting emotional towards a piece of property.  This is a definite thing to remember when it comes to you and your family’s financial future.  Leave emotions at the door.  The phrase, “time is money”, can go both ways. Waiting two years to purchase because it makes more sense financially or selling now because you have a willing buyer, may factor into your decision. Remember, “A Bird in the Hand is Worth Two in the Bush”.

“To see real potential in farmland, one must be ready to hold on through at least 5+ years.”

DIVESTING

After the asset has reached potential or maybe you are ready to buy a new investment, it is time to liquidate. When you invest in farmland, selling the property is as important as the day you purchase. I cannot express the importance using a qualified professional. Visit the Realtors® Land Institute to find a qualified agent when it comes time to sell your investment. The right professional can elevate your sales price, alleviate hassle, and supply you with confidence to the day of closing. When selling farmland, a land professional must qualify buyers and must advertise to the masses. This requires a tailored marketing program and someone with whom has the skill set to vet buyers and make sure qualified candidates can meet or exceed the requirements to get to the closing table.

CONCLUSION

Investing in farmland is very rewarding, if done correctly. The key to remember is to surround yourself with qualified people to help you make decisions. This is your money and your future, happy hunting!

About The Author: 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 East Texas and Southern 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.

Call The Neighbors And Other Prospecting Tips

Early in my land career, I learned a valuable lesson. I got a call one day from a broker who works in my market area saying he had a prospect for one of my listings. They toured the property, submitted an offer, and we negotiated to an executed contract. About a week later I was gathering some information for the closing attorney via the property assessor website. It was then that I discovered that the buyer was the landowner immediately adjacent to my listing. The broker that submitted the offer had seen the property marketed online and was friends with the eventual buyer. He made one phone call to his friend and became the buyer’s broker in the deal. By failing to contact that individual myself, I gave up half of my commission – over $100,000.

Before I go on, I want to make it clear that I have no issues cooperating with other brokers. Our land broker community is a small one and pretty tight. I have done plenty of deals that would not have happened without the cooperation of fellow brokers and I welcome their involvement. But in the case above, this buyer was someone I could easily have gone to directly.

It seems like a simple thing – get in touch with the adjacent landowners to gauge their interest in your listing. But I screwed it up. So, maybe by pointing it out, I can help someone out there avoid the same mistake. Certainly, we all have go-to buyers who we contact the moment we have a property that fits in their wheelhouse. But it’s always possible the simplest solution is literally right next door.

Since entering the land brokerage industry 5 years ago, I’ve made a few (a lot of?) other mistakes or simply failed to do some (MANY!) important things. So, I’d like to offer some tips on prospecting to help you get more deals and maintain a more consistent pipeline.

When on the phone, if they will keep talking, let them talk!

When I first started cold calling, many of my calls lasted less than 20 seconds. I would get someone on the phone and ask if they wanted to sell. If they said “no”, conversation over. Move on to the next call. Over time, I realized I was doing it wrong. I began engaging people in conversation – even if I knew they weren’t sellers. I learned about people. I built relationships. And pretty frequently, I got a tip on a family member or friend nearby who owned land as well. By making the phone call less about a “yes” or “no” and more about gathering information, I was able to make my calls more productive and, frankly, more enjoyable. It was also a great way to set myself up for doing what I recommend in the next tip.

When prospects tell you “no”, call them back later

At this very moment, I am working on a rather large deal that is the result of consistently calling back a “no”. I’ve been following up with this guy for over 3 years and he is finally ready to sell. In fact, on my most recent follow up with him, he told me he still wasn’t a seller. Then he contacted me a week later and wanted to move forward. The point here is that people change. Regular follow up is VITAL to make sure you get to them when they are ready. Many things can make a landowner change their mind: a bad crop year, a death in the family, birth of grandkids, or whatever. The answer may be “no” today, but is likely to change to a “yes” at some point in the future. You want to make sure that when “yes” arrives, you are the only person that owner will think of.

Flag down the tractor

This tip falls a bit more under the heading of canvassing than prospecting. But when done well, it leads to more effective prospecting. Have you ever been out looking at land (in my case row crop farms) and seen someone plowing or spreading fertilizer? Next time you do, park your truck on the side of the road and see if you can get his attention. He might be a contractor, or a farmhand, or maybe even the owner himself. But no matter what his role or position, you’re bound to get some great information from him if you simply engage him in conversation. Using this technique, I’ve gotten names, addresses, and even cell phone numbers of quality prospects. It may sound a bit weird or make you uncomfortable, but the tractor driver generally welcomes the company. He likely spends most of his day alone in that tractor cab. Give him the opportunity to talk, ask the right questions, and before you know it you’ll be listing that $10MM property that you got from the guy on the tractor.

There are millions of different tips and tricks to effective prospecting. I’ve written in the past on outsourcing your time and using good software to boost your prospecting efforts. But there is no substitute for getting on the phone or talking in person with people who own property. In my opinion, this is far and away the most directly effective method for listing and selling property. First, call the neighbors. Then, call EVERYBODY ELSE.

This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here.

mcdow, calebAbout the author: Caleb McDow, ALC, is a land specialist and vice president with Crosby & Associates, Inc. in Winter Haven, FL, with a Master of Science in Real Estate (MSRE) and is a licensed private pilot and drone operator. McDow joined the institute in 2014 as a Military Transition Program (MTP) member.  He serves on the Institute’s Future Leaders Committee and regularly blogs on real estate issues. Caleb McDow can be reached at 352-665-6648 or caleb@crosbydirt.com

Checklist for Success

How many of you are the backbone of your Company’s entire operation? In fact, you are probably your entire operation: a solo agent prospecting for new leads, writing offers, conducting listing appointments and buyer consultations, negotiating contracts, giving sellers marketing updates, ordering surveys, determining utility locations, marketing your listings, handling your social media and overall, handling the entire transaction from listing to closing. In fact, you probably have to make your own coffee and try to manage a database and a family. WHEW, it’s a lot!

Have you ever felt as if you’re juggling too much, perhaps, you’re even struggling to keep up? Ever wished that you were in a position to hire an assistant to support you with the never-ending stream of administrative tasks? Have you determined that you’re not quite ready for that next step but desperately need some help staying organized and efficient? I feel like this is an incredible place to start. Not only will it help you stay organized, it will create a workflow that can be duplicated and passed on. Now is a great time to consider implementing systems and processes that can later be handed off as you grow. In order to do so, you have to write down what has to be done before you can hire someone to do it.

In order to move from a solo agent to a team, you must build systems that will keep your company operational and functioning in a smooth, systematized and efficient manner. In addition, when you finally hit your breaking point and hire an admin, you can share these systems and train your team by simply going over your documented processes. If you’re a real champion and want to grow your business exponentially, I would personally recommend going through the utter discomfort of hiring a business coach. I would recommend someone like Mike Ferry Organization, Tom Hopkins International, or my personal favorite, Icenhower Coaching and Consulting.

A coach can help you organize your business, determine when to hire staff members and how to grow. It is uncomfortable; however, I want to illustrate the type of systems the discomfort introduces. Below you will find Ary Land and Home’s Listing to Contract Checklist. My team and I have developed this over time while working with our coach (Icenhower Coaching and Consulting). See below.

 

Date Completed Date Requested
Admin intro call to sellers – immediately after listing signed
Receive signed listing agreement
Create PROPERTY FILE CHECKLIST
Obtain all signed & completed sellers disclosures
Obtain showing instructions from agent/sellers, Gate Code? Combo?
Verify Aerial is accurate with salesperson
Put seller on MLS listing auto-alert email drip for LAND OR HOME to buy
Put seller on MLS auto-alert drip- MLS status changes 1 MILE RADIUS FROM LAND
Ask Seller for utility companies, call and get sizes of lines in front of prop
Order preliminary title report, HOA Documents & CCRs if HOME
Order Signs? Let Trish know what’s used for sign inventory
Add sellers to admin weekly update call list
Add sellers to agent’s weekly update call list
Ask to Enter listing into MLS as incomplete for agent to proof
Assign lock box to MLS listing
Add client to CRM database
Add new listing to Team Scoreboard
Submit listing contract/disclosures in to DotLoop for compliance
Get MLS listing edits/approval from Agent
Upload MLS Client Detail Report to property file
Email MLS Client Detail Report to all team members
Add/Enhance Listing on LandWatch LOA and LandBrokerMLS
Calendar Listing Expiration Date
Prepare property flyer
Create “Just Listed” Facebook & social media posts
“Just Listed” mailers/flyers created & ordered
Add clients as friends on Facebook/Social Media
Claim listing on Zillow/Trulia & set up reporting
Sign up at property
Flyers delivered to property
LISTING GOES LIVE ON MLS  
Send Thank You/Gift Card to Person who Referred Listing
“Just Listed” email to neighborhood & SOI
“Just Listed” posted on Facebook & social media
Call to sellers for PRICE REDUCTION APPOINTMENT?
Weekly Activity Report Call to sellers
Email Activity Report to sellers
ONCE OFFER(S) RECEIVED  
Prepare summary(s) of key offer terms to present to sellers
ONCE OFFER ACCEPTED – Start Property File Checklist  

 

*Please note that you need to go through the checklist, there are some things that will not apply to your situation.

Can you picture yourself using this checklist? Can you imagine what it would be like to know that all of your files are “where they need to be?” Fundamental organization and structure is essential.

The main goal in writing this Blog is to help novice agents understand that developing routines and establishing work flows is essential to running a successful real estate company. Even though you may feel like you are too far gone, YOU CAN turn chaos into order and whip things into shape. These processes will 1) make your life as an agent easier and less stressful, and 2) create and maintain seamless systems that can be duplicated to keep the business running so that you can focus on growing your business.

With that said, I urge you to sit down and go over the above Listing to Contract Checklist and make it yours. Don’t stop there, make a Contract to Close Checklist, a Seller Closing Checklist, and a Buyer Closing Checklist and just keep going. Don’t make the checklists just to make them, make sure you implement them and go over them weekly. Make a checklist of what needs to be done on every file and eventually you will be able to hire someone that can make sure the items are checked off for you. I know it will be painful and you will grow to the extent of pain you can handle!

On another note, if you are looking to hire someone and you are not sure exactly what they are supposed to do, keep reading. Below is a sample Listing Manager’s job description.

  • Oversee all aspects of Seller’s transactions from initial contact to executed purchase agreement.
  • Prepare all listing materials: pre-listing presentation, Listing Agreement, sellers’ disclosures, comparative market analysis, pull online property profile, research old multiple listing service (MLS) listings and etc.
  • Consult & coordinate with Seller’s all property photos, surveys, repairs, cleaning, signage, lockbox, access requirements & marketing activities.
  • Obtain all necessary signatures on listing agreement, disclosures and other necessary documentation
  • Take property phone calls and monitor Agent emails.
  • Coordinate Buyer showings & obtain feedback.
  • Provide proactive weekly feedback to sellers regarding all showings and marketing activities.
  • Coordinate all agent meetings and remind Agent of important dates.
  • Input all listing information into MLS and marketing websites and update as needed.
  • Submit all necessary documentation to office broker for file compliance.
  • Input all necessary information into client database and transaction management systems

Again, when I got into real estate, I knew how to sell Farms. I did not understand how to run a business. None of this comes natural to me, however; it has changed the way our business operates. In fact, I no longer say “only I can do it” or “no one will do it as good as me.” That is a scarcity mindset and you have to realize that if you are saying that right now, it’s because “how to do it is not written down,” as our great leader, Gary Keller, would say. It took me a long time to realize this and if it weren’t for Kasey Mock taking the time to explain how important a business foundation is, I sure wouldn’t be where I am at today. With that said, my challenge to you is to start to document the things you do and create checklists to make sure they are done on every file. Make it a priority! Call me if I can help!

This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here

About the Author: 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.

Gathering and Verifying Comparable Sales for Rural Land

As a rural land appraiser, comparable sales are the “life blood” of my business. Of the three common methods for appraising – cost, income, and market data – I tend to use the market data approach the most often both as an appraiser and as a real estate broker. This method allows me to gather reliable and verified comparable sales which are both vital for pricing and appraising properties.  Here are a few ideas on how to do this in your rural land markets:

Sources for Comparable Sales

Networking with Market Participants

Talking with local market participants has proven to be the best way I have found to locate sales. Whether you are at the local restaurant eating lunch or at an agricultural trade show, you should always keep your “ears to the ground” for recent land sales. You may hear these sales in conversations with farmers, foresters, buyers, sellers, bankers or other individuals.  When you hear mention of a sale that you do not have in your database, be sure to listen closely and ask questions if the timing is right always being courteous of others’ time and privacy. If someone seems as if they don’t want to talk about the sale, respect that and try to do further research elsewhere such as utilizing probate records or having conversations with other brokers or appraisers involved.

Company Sales

My best sales are by far the ones where one of our company’s representatives (myself or another broker) is involved.  These internal transactions can almost always ensure that great data will be gathered to verify a sale considering that we should have all of the maps, closing statements, contact information and other necessary data readily available.

Multiple Listing System (MLS)

MLS is a great tool to utilize in your search for comparable sales in more populated areas (considering I appraise and sell land in rural south Alabama, I do not have the opportunity to utilize it often).  Further detail verification of the transaction and property will be necessary since MLS’s are geared towards Residential Real Estate but it’s an excellent “starting point,” if available.

Other Appraisers and Brokers

It is imperative to keep a good working relationship with appraisers and brokers in your market area if you want good data on comparable sales. I have made many great friendships by sharing and receiving comparable sales with other appraisers. I met several of these appraisers at various American Society of Farm Managers and Rural Appraisers (ASFMRA) events. After meeting other appraisers in my area, I always try to follow up by phone call or email to remind them to let me know if I can ever help them with comparable sales in my area. Many of these appraisers have sent work to me when they were either too busy or had a conflict of interest. “Friendly Competition” in the appraisal world is something that we must continue to work towards.

Verifying Comparable Sales

It is always best to speak with someone directly related to the transaction to verify a comparable sale. Of course, if you live in a “disclosure state” you can find items like: purchaser, seller, closing date, legal description and purchase price on the deed at the local probate office. However, in most cases there are other items that make up the purchase price that must be researched further. When verifying comparable sales, I almost always start at the probate office to verify that the sale actually closed, print a copy of the deed so that I have it for my records, and look up the property on the county tax map to verify its location. I will then try to contact someone directly involved with the transaction to determine items such as: improvements located on the sale and their contributory value, timber value, long term leases and their contributory value, equipment or livestock included with the purchase, just to name a few. I find it is most beneficial to speak with buyers, sellers, and agents involved with the transaction. More times than not there will be two sides to the story which you must reconcile to determine the true makeup of the items involved with the sale.

Comparable sales research is something that will make you a better real estate broker or appraiser. I believe you never can know “too much” about your local land market. Knowing your market will help you competitively price land which is ultimately helps it sell quicker, this “hands on” approach of digging through sales will likely introduce you to valuable market participants with great lead potential that you otherwise might not have met in your everyday professional life.

This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here.

About the author: Calvin Perryman, ALC, is an Associate Broker and Appraiser with Great Southern Land. Calvin is an active member of RLI, serving on the 2018 Future Leaders Committee and as the 2018 President of the RLI Alabama Chapter. He graduated from Auburn University with a Bachelor Degree in Agricultural Business and Economics in May of 2011. Shortly after graduating from Auburn he obtained his real estate license and has been in the real estate business since 2011.

Adding Recreational Value to your Property

The majority of the buyers in my market are typically looking for properties with two characteristics: timberland for an investment and hunting for recreation. However, there aren’t many properties that ideally fit both characteristics. Sometimes I scratch my head, wondering why there aren’t more people willing to play the role of a developer and convert timber tracts into recreational retreats for profit. While it’s rare for an established hunting retreat to hit the open market, the properties that do, usually justify their price premium and get purchased quickly.

Timber real estate investment trusts (REITs) and investors are realizing that recreational value on many properties is now exceeding the timber value, which in turn justifies selling the property for a substantial profit. While there are many different ways to add recreational value to a property, I’ve decided to focus on one particular property, as it’s a great example. The main goal behind the property is continuing to operate a pine plantation for investment purposes, however, have the means to hunt, fish, and enjoy the property recreationally year-round. Here are some ways this property was able to achieve this goal:

1. Created Food Plots

While it does take some time and money to prepare a food plot, the end result will benefit wildlife and keep them on your property.  This requires cutting timber, removing the stumps, liming and fertilizing the soil, and figuring out what and when to plant. The majority of these food plots are on the edges of hardwoods. This one, in particular, has been low fenced to keep the hogs out.

2. Built A Dove Field

Having a great dove field is a great way to host guests, family, and friends for entertainment. It’s a fun social event you can put on several times a year. This dove field has all the makings for being successful including a fake power line and trees for the birds to roost, water to drink, sand/gravel, and approximately 12 acres to plant.

3. Created A Duck Impoundment

Since this property sits along the eastern flyway, this duck impoundment is ideal to attract passing ducks. This impoundment is planted in June and the water level is manually controlled through a flashboard riser. The owners are able to enjoy it from early teal season in September, all the way to the end of the season in February.

4. Created Quail Habitat

This required thinning the trees back to 35-50 trees per acre. A skid steer with a grinder ate up a lot of the long-abandoned understory before Garlon (Triclopyr) was sprayed to prevent hardwood growth. These fields were burned using prescriptive fire in late February. Continuing to burn every one or two years will keep this stand clean and provide great habitat for all wildlife.

5. Building A Fishing Pond

This pond was started almost a year ago. The owners were able to reach a mutual agreement with a local contractor and the Department of Transportation. The agreement allows the two parties to have free rights to the dirt in order to finish converting a nearby roadway from two lanes into four. Once completed the landowners will have a 17.5 acre stocked pond to enjoy year-round fishing.

6. Starting A Garden

Establishing a garden requires a lot of work. However, it is very enjoyable to be able to eat what you have grown. This garden contains a mixture of fruit trees including blueberries, blackberries, peaches, limes, nectarines, oranges, apples, pears, and grapes. It also has a seasonal section that is currently planted in corn, squash, cucumbers, peppers, okra, bush beans, cantaloupes and watermelons.

While there are certainly several other recreational aspects to add to a property, I thought this property did a great job of highlighting many of them and a great example of maintaining a timber investment and year-round recreational enjoyment.

Interested in becoming an expert in recreational land transactions? Check out the RLI’s Recreational Land Real Estate LANDU course.

This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here.

About the Author: Tommy Stroud Jr., ALC, is a broker with National Land Realty Tommy has served on the REALTORS© Land Institute Future Leaders Committee since 2016. He holds the esteemed Accredited Land Consultant Designation (ALC) and has an active real estate license in the states of Georgia, Florida, and South Carolina. Tommy lives in St. Simons Island, GA, with his wife and two children.

Hidden Talent: Property Value from Untapped Sources

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

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

1. Mineral Rights

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

2. Conservation Easements

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

3. Mulch

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

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

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

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

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

This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here.

mcdow, calebAbout the author: Caleb McDow is a land specialist and vice president with Crosby & Associates, Inc. in Winter Haven, FL, with a Master of Science in Real Estate (MSRE) and is a licensed private pilot and drone operator. McDow joined the institute in 2014 as a Military Transition Program (MTP) member.  He serves on the Institute’s Future Leaders Committee and regularly blogs on real estate issues. Caleb McDow can be reached at 352-665-6648 or caleb@crosbydirt.com

Conservation and Land Real Estate

Conservation is by no means a new concept, but in the last several decades it has increased substantially as farmers have become more conscious of their impact on the environment. There are many different conservation practices being utilized today, and they work in different ways to control different potential problems such as erosion, chemical runoff, and retaining excess soil nutrients.  These practices increase sustainability, overall soil health, and improve water quality in local watersheds. Some of the most common practices associated with commodity crops are grass waterways, buffer strips, cover crops and land enrolled in the Conservation Reserve Program (CRP).

Grass Waterways

Grass waterways are a site-specific control measure implemented throughout a field, primarily on steeper parts of the field where water flow concentrates. These waterways are seeded to perennial grasses and farmed around, providing water a place to flow with continuous vegetation to hold the soil in place eliminating erosion on sensitive areas of the field. Waterways can vary in length, width, and are typically placed in between two hills or areas in a field with a high concentration of water flow during rain events.

Buffer Strips

Buffer strips are vegetative swaths placed along the edge of a field or surrounding a ditch or body of water. Buffer strips provide a “catch strip” for nutrients and soil particles as water runs off the field and before it enters a body of water. The vegetation slows the runoff, allowing time for soil and nutrients to settle in the ground where they can then be utilized by the plants inhabiting the buffer strip instead of running off into a neighboring water source.

Cover Crops

Cover crops are typically a hardy winter small grain crop that is seeded into a standing crop or seeded after harvest to provide vegetative cover over the winter months. Cover crops also uptake and hold excess nitrogen further preventing them from exiting the soil and entering a body of water. The benefits of cover crops include reduced erosion, increased organic matter, and reduced nitrates/excess nutrients from exiting the soil. Cover crops also increase soil tilth with their extensive root systems that move throughout the soil, creating pores for water and carbon dioxide to move freely. Common cover crops include oats, wheat, barley, and tillage radishes. Cover crops that are not killed by the cold will be planted into and then sprayed in the spring, blanketing the soil and increasing water retention.

Conservation Reserve Program (CRP)

CRP is an incentive-based government program administered by the United States Farm Service Agency. This program establishes a rental rate based off region and soil types and pays farmers for taking environmentally sensitive acres out of production while still generating revenue on those acres via government compensation. The acres are taken out of crop production and enrolled in a pre-approved program that locks the land in a contract and ensures it will stay seeded for a number of years. There are many different options for implemented practices such as seeding switch grass, prairie strips, and native grasses that protect soil and filter pollutants by plant absorption. In addition to their stewardship characteristics, they also provide excellent habitat for upland game, pollinators, and other forms of wildlife.

Conservation continues to grow in popularity throughout the agricultural community and more advanced programs continue to be developed to reduce our impact. Conservation improves our local and national ecosystems, supports premium appreciation, and is our responsibility as farmers and stewards to protect the land for the next generation to prosper.

This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here.

About the Author: Molly Zaver is the Vice President for the Peoples Company. She is a member of RLI’s Future Leaders Committee as well as the American Society of Farm Managers and Rural Appraisers.

The Characteristics & Attributes of Land

Unlike homes in certain residential developments across the country, no two parcels of land are the same in my mind.  Sure they may have similar views or produce a similar crop, but there are likely many different attributes that each property might have that are not visible from just a site visit online or from studying a map of the property.  In order to completely grasp these attributes to their fullest extent, there are a number of important questions that must be asked prior to making an investment in land.

Conservation Easements

Is the land encumbered with a conservation easement?  This should be one of the first questions asked when looking at land in my mind.  While some landowners may be looking to permanently conserve the land while getting a healthy tax benefit, others may want to have the opportunity to develop it at some point down the road.  I’ve seen lots of common sense conservation easements over the years that do not hinder the use of the land in a significant way, but I’ve also seen some bizarre conservation easements that can greatly affect the overall market value of a property.  Consider the long-term effects of a conservation easement and if they’re right for you and your heirs.

While most parcels of land do not have conservation easements, some might have rules, restrictions, or covenants that the owners must abide by.  It’s imperative that this be investigated so that you know what can actually be done on the property.

Hunting Properties

Buyers of hunting properties, especially in the West, often look at proximity to public land.  While many landowners consider it a luxury to border National Forest, a lot of recreational buyers consider it a negative if there is a public trailhead nearby.  The last thing any outdoorsman wants is to purchase a gorgeous high-country elk hunting property bordering the National Forest, just to the have the public legally walking on the other side of the fence in blaze orange come hunting season.

In states where public land is more rare, it’s quite common for a hunting buyer to look at smaller properties that are adjacent to large cattle ranches or large farms full of crops, as these will typically hold and attract a significant amount of wildlife.  If the neighboring properties are all 80 – 160 acre parcels with homes, then there is a very good chance the hunting opportunities will be very limited compared to if the neighboring properties are a peanut field on one side and a cattle ranch on the other.

Waterfront Properties

Avid fly fisherman will often look for two types of properties.  Those with deep enough pockets strive for acquiring a long stretch of river, often at least half a mile, to hold enough holes where they can fish without feeling pressured from neighbors both upstream and downstream.  Those looking for more affordable options will often look in ranch communities or platted subdivisions that offer fishing easements for its members or property owners.  These fishing easements can range from 1 – 6 miles of premium fishing habitat with very little pressure, as most property owners in these types of communities are typically absentee owners who have a primary residence is another state.

When purchasing waterfront land it’s important to obtain a floodplain map.  These can often be found through FEMA, but I encourage you to have the land surveyed so that you have the most up to date accurate elevations.  If you’re ever planning on building, be sure to do your proper due diligence and investigate insurance options prior to your purchase.  Flood insurance certainly isn’t cheap and it must be considered prior to purchasing land in low-lying valleys or along waterways.

Farmland

If farming is the primary purpose for a land purchase, knowing the soil type and the annual precipitation is going to be imperative.  If water rights are applicable, details of the water rights and the method of delivery for those water rights will be imperative to understand.  The length of the growing season and cuttings per year must be considered as well with farm ground.

Access

Access is another key component when comparing different parcels of land on the market.  While most properties around the United States have decent year round access, it is not unheard of for there to be no year-round access.  I’ve seen properties that can’t be accessed in the winter unless it’s via snowmobile, and I’ve seen properties that can’t be accessed after a heavy rain due to all the clay.  Vegetation and soil type can vary from region to region, and it’s important to know how those can affect the access during the different seasons of the year.  Along with access must come the conversation of access easements.  It’s certainly not ideal to cross a neighbor’s property to get to yours, so this also must be investigated if it does not appear that the property has direct access off of a road.

Utilities

Location of utilities and infrastructure should be a given when it comes to looking at land, especially residential home sites, but I’ve seen several buyers purchase land over the years because of a fabulous view it offered and didn’t give any consideration to the costs of pulling utilities to the property.  While solar has certainly gotten much more popular over the past few years, the majority of the public still desires to be tied into the electric grid.

Domestic water should certainly be another characteristic that buyers consider if they plan on living on the land.  If purchasing land in a rural area, it’s wise to talk to the neighboring landowners with improvements and see what the depth, yield, and quality of their water wells are.  (Some states have this information posted online on their Division of Water Resources website).  If you see a water trailer or a pickup truck parked next to their house with a portable cistern, this should be a red flag as it likely means they are literally hauling water for domestic use.

Residential

When dealing with residential homesites it’s important to consider the direction in which the land lays.  For example, a prime home site in the Rocky Mountains will often have good southern exposure for generating great natural light in the cold winter months.  On the other hand, a home site in the Texas Hill Country would ideally be more east facing and have a lot of mature trees on its western boundary, providing a good amount of afternoon shade over the home in the hot summer months.

Another question one should consider when looking at land is the long-term potential of that land generating an income.  There are a variety of ways to generate income from vacant land.  A few examples include the following:

  • Income from leasing the mineral rights
  • Income from leasing the pasture for grazing
  • Income from leasing the land for crop production
  • Income from leasing the water rights
  • Income from leasing the land for storage (RV’s, boats, etc…)
  • Income from leasing RV or tiny home sites
  • Income from leasing the land for wind turbines
  • Income from a hunting or fishing lease
  • Income from recreational activities (mountain biking, ATV-ing, etc…)
  • Income from harvesting timber

Wildfires

With the wildfires that unfortunately spread across many states this year, another important factor to consider when purchasing land is the likelihood of the land burning and the long-term effect it could have on the property.  Is the land a healthy forest with little undergrowth vegetation, or is it full of dead timber that is likely to go up in flames?  What are the neighboring properties like that border it?

Despite what many folks might think, selling and purchasing land is not an easy task.  I encourage you to do your proper due diligence and think about one of the most important attributes of all, and that is the family memories that land can offer for generations to come.  Whether it’s eating a meal from the family garden, watching a child harvest their first Thanksgiving turkey, or building a cabin next to the river, the right parcel of land can offer the opportunity to bring families together in a way that unfortunately far too few of people are truly experiencing these days.

This post is part of the 2018 Future Leaders Committee content generation initiative. The initiative is directed at further establishing RLI as “The Voice of Land” in the land real estate industry for land professionals and landowners. For more posts like this, click here.

Justin Osborn is a licensed associate real estate broker with The Wells Group. He is a member of RLI’s Future Leaders Committee.