Buying Land. Explain It Like I'm 5.

[BayouCat]

Some great advice already given. Having water, electricity, and an ag exemption already in place will save you a ton of money in the long run. I personally would not buy anything in a flood zone if you're planning to build or have anything of value on the place. Been there, done that.

With that being said, the fun part starts adding up when you realize you need all the toys required to maintain your land, like a tractor. Or you want to build a tank or a barn or a new fence. You might have to clear some trees and bring in some loads of gravel to build a new road. It's a lot of fun, but you can slip into debt really fast. Make sure you have the funds for that before purchasing any place. Think out everything and create a budget for it.

[squirrel]

You should speak to a realtor/broker to help you with your questions, there are really too many variables to really go into it all. They are commission based and get paid at closing, and can help/guide you a good amount.

Look at capital farm credit, they will have much more favorable loan terms versus a traditional bank for Ag land.

YES! you can build in the flood plain. Keep in mind there is a floodway, 100 year and 500 year flood plain. In theory a floodway is designed to flood regularly, 100 year every 100 years and 500 every 500 years. And these change. You also got wetlands and WOTUS. If you are financing a home, the bank isnt going to want you to build in the flood to protect their investment. High level here - The finished floor of the home needs to be out of the flood, you can do this with dirt (this is regulated though digging onsite or brining dirt in) or shimming this home up off of the ground, like a beach house.

Ag is going to be county specific. And it will be much easier if the property is already in Ag or wildlife as I want to say it takes about 5 years to get into Ag.

Utilities - you need to reach out to the provider and I am pretty sure it isnt the county. It could be a city, MUD, PUD or many other entities. You should be able to look at the county appraisal district and see what taxes are being charged to help see who could be providing utilities. In some cases they will extend utilities on their dollar, but again it is going to be deal specific. Keep in mind you will need a water line, that has the capacity to serve new developments, and a water plant that also has capacity. Also realize water doesnt tend to want to go uphill. Most of this holds true for sanitary/septic.

Access would be something else I would add, especially if you will be looking to grant easements for utilities.

[camoclad]

One of my favorite movie moments was in There Will Be Blood. The father and son, preparing to offer on a piece of land they found oil on are discussing how to proposition to the landowner. The boy ask how much is land with oil worth? The dad says it doesn't matter because they aren't offering oil prices. They are offering quail hunting prices...

I guess my advice concerning land purchases is simple. Have a vision for the piece you pursue. That's how YOU base your value. If you can't get it for that price, walk. The particulars and technicalities can be answered by the professionals you hire for that purpose. Dont skip any part of the process.

USDA offers really great options for beginners:

https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/index

GL. Land can be a great investment and a huge blessing.

[TKRanch]

Make certain of the AG rules for the county especially as it pertains to number of acres to qualify. The reason I say this is this. If you own 20 acres and it is under AG and the county changes the rules in the county to not allow properties under 25 acres to have ag, they will not take it away from you as you own it, but, when it is sold, the new owner has to apply for AG again, no matter if they do the exact same thing that is done on it when they buy it and because of the ownership change, it might give the county reason to not allow AG going forward. That happens and is a real surprise when it does, so speak with the CAD before you buy to be certain!

[Atfulldraw]

1. Find yourself a great rural realtor.... one that is willing to teach you what you need to know and is wiling to spend time with you.
2. Don't get in a hurry. I wouldn't be borrowing money to buy land right now anyway with interest rates where they are.
3. We used Capital Farm Credit for our loan - it's basically paid off now, but they were great to work with.
We refinanced or bought down our rate to 5.5% and still got the patronage dividend every year.

4. It's cool when it finally works out....aside from loving and enjoying the land, our land value has just about quadrupled in the last six years - we aren't selling, but it's nice to know we made a good buy at the time.

On top of all that, yes....water, power and ag exemption are probably at the top of the list of importance, right after location.

[Chance Love]

I've seen a few mention interest rates. My advice on that is if you find the RIGHT place you need to be ready to go ahead and buy it. You "marry the land, not the rate". You can refinance later.

And hire a Realtor that specializes in land. Don't hire a residential agent that thinks it will be fun to look at land.

1. Find yourself a great rural realtor.... one that is willing to teach you what you need to know and is wiling to spend time with you.
2. Don't get in a hurry. I wouldn't be borrowing money to buy land right now anyway with interest rates where they are.
3. We used Capital Farm Credit for our loan - it's basically paid off now, but they were great to work with.
We refinanced or bought down our rate to 5.5% and still got the patronage dividend every year.

4. It's cool when it finally works out....aside from loving and enjoying the land, our land value has just about quadrupled in the last six years - we aren't selling, but it's nice to know we made a good buy at the time.

On top of all that, yes....water, power and ag exemption are probably at the top of the list of importance, right after location.

Ya y'all got a really cool place!

[Farmdog]

If ur land is paid off, buy more. Even at 8.25, at least another 100 acres. Don’t stop playing or you will sit dead in the water and grow old quickly when interest is at 4 everyone wants to play. Quadruppled ??? This isn’t a spelling contest

[Atfulldraw]

I've seen a few mention interest rates. My advice on that is if you find the RIGHT place you need to be ready to go ahead and buy it. You "marry the land, not the rate". You can refinance later.

And hire a Realtor that specializes in land. Don't hire a residential agent that thinks it will be fun to look at land.




Ya y'all got a really cool place!

you should see it now…..a dozer, a high fence, and a house

let me clarify….we are not looking to borrow money right now, but I’m still looking to buy