Looking for the perfect equestrian, agricultural, recreational or other land property to invest in? Here’s are some valuable realtor tips to buying and selling ranch property or other land investments.
Pro Realtor Tips for Buying and Selling Ranch Property, Farmland and Other Land Investments
Deciding to invest in land property is very exciting. Taking in the beautiful countryside, barns, and a lovely homestead can gets your imagination going. But before you decide you should do your homework to know what you’re signing up for.
At First Glance
All the sunsets and fence posts of your dream equestrian or farmland estate will not make up for hidden property problems. While you may be absolutely in love, you should use facts when making your investment decisions. You will be repaying loans for many years, and you want to ensure your ranch property will return on that investment with interest.
Do Your Research
Off the bat, there are a few things about buying and selling land you absolutely should know about. You need to know about the local ordinances, land usage, zoning, whether there are any BLM or other agricultural leases that are in effect. Find out whether the land has oil wells, water, and any ecological concerns such as the presence of an endangered species of plant or animal. These may severely interfere with your plans and, without appropriate knowledge, you could be biting off more than you can chew.
Checklist
- Property tax information – how is the property is assessed (recreational, agricultural, timber, wildlife, etc.)
- Zoning information
- Local utilities
- Water rights, water usage, well logs
- Mineral ownership production
- BLM leases or other agricultural leases
- Conservation/environmental easements
- Government programs, CRP, Grassland Reserve, etc
- Income and expense statements (Commercial, Industrial Properties)
Dig Deaper
If at this point you’re still interested in the land property then you need to dig a little deeper. That’s where a experienced ranch and land property realtor can help.
Taxes –When selling a large parcel of land, a ranch, or equestrian estate, you may be subject to Federal Ordinary Income Tax ranging up to 39.6%. Buying such a piece of land may be taxed in terms of either an investment or as a residence. There are ways to minimize certain taxes by forming corporations or charitable foundations, and if you are buying land, you may want to bring in your local accountant to help you find the best way to ensure you pay the least amount. Land is an investment, and while it comes with expenses, you will still have to be ahead of the tax curve if you want to come out on top.
Maps: Water, Neighbors, and Zoning
Map Source – California Department of Conservation
Know your/neighbor fence boundaries or if there are cross fences. Know the land use, how much is wooded, used for crop production or pasture use, pasture capacity. Are there stream, rivers, ponds or lakes, and if so, how big are they, how deep are they, are they seasonal or permanent?
Check water rights & usage. What if the the parcel is on dry land? If so what water usage is available? Also check flood maps. It’s good idea to contact the National Weather Service to help you follow up on the actual climate for the area so you know what to expect when you move in. (Make an informed decision and avoid a bad investment.)
Hunting, fishing & recreation. For sellers, get wildlife photos, trail photos. Nothing communicates to potential buyers then photos or video. Aerial drone video is highly recommended. For buyers, it’s important to know how many tags a land owner gets, licensing, season dates, or if outside hunting is permitted. If the land is business recreational, request financials. (Also important for agricultural or commercial business.)
Happy Hunting
Hunting for the perfect ranch property, farmland or other land investment is an excellent investment. By having a knowledgeable partner, you can avoid your investment becoming a nightmare. Being informed and knowing what is at stake will help you make a decision you will not regret. Contact Home Ranch Properties for the best ranch, recreational property, and land advice and deals in the California and surrounding states.
