Published on Wednesday, January 06, 2016 by Land Century
Here are some tips on where to look for the best deals:
Look in Unexpected Places
If you want to find a bargain, dont go looking in the most obvious places. Farmland in the Corn Belt, for example, will never be available at bargain prices. Here, youll find flat, deep soils and square fields in other words, premium farmland. These properties pay for themselves very quickly.
To find real bargains, you need to go off the beaten path to class B and C soils. You may find these properties are completely flat, and the topsoil may be very shallow. You may need to give the land and soil TLC in order to farm it. Try looking for properties in Louisiana, Arkansas and Mississippi along the Mississippi River. Farmland prices are reasonable here, and the climate is more favorable than Texas or states west of it.
Just keep in mind that youll need to do some extra work in order to get the soil up to par, but if you have the knowledge and experience, your property will easily pay for itself.
Check with the USDA
The USDA-RD/FSA lists farms and ranches that are for sale by the U.S. government. These are properties that were previously owned and are now for sale by public auction or another method, depending on the property. Anyone can purchase a farm or ranch thats for sale by the U.S. government, but youll need to work with a broker, real estate agent or a servicing representative to submit a bid.
The USDA has a simple tool to find listings (found here). But its important to keep in mind that listings are scarce, and youll need to be willing to purchase property in any state in the country. Right now, there are only 13 government-owned properties for sale, so theres a good chance you will find land in the state that you had in mind.
Another simple way to find great deals on farms and ranches is to search online. There are several property portals online that can help you search and compare listings anywhere in the country.
Searching online will allow you to get a feel for what prices are like in the areas youre considering. This way, you can better determine what a bargain deal is. Cheap land in Idaho may be astronomical in Arkansas.
Check with Industry Insiders
One of the best ways to get a great farmland or ranches is to find the property before it even goes in the market. The best way to do this is to develop a network of people who were in the industry, like farm insurance representatives, rural praises, farm managers, and even farm credit lenders. These professionals are insiders in the business, and may be able to provide you with information on farmland opportunities before they even hit the market.
Work with a Farm Realtor
A real estate agent that specializes in farmland or rural real estate can help you find great deals on farms and ranches. These professionals specialize in the buying and selling of farmland, and have a greater understanding of the local market. He or she will be able to tell you whether or not a property is worth the asking price. Agents may also have connections with local farmers and ranchers, and may be informed of potential listings before they reach the market.
Go For Smaller Acreage
When people consider buying farmland or ranches, they often do so with the assumption that they have to purchase hundreds of acres. But theres increasing demand for small-scale farms and local food. This provides you with an opportunity to purchase a smaller lot of land for a cheaper price.
Consider thinking outside the box, and purchasing a piece of land that isn't necessarily farmland, but could be with a little bit of work. There are many people out there who are leading a fulfilling farmland life and making a living on a small acreage farm. Even just 5 acres can be profitable if you use the land properly. And there are other added benefits of buying a small-scale farming, such as not having to invest in large, expensive machinery.
Talk to Neighbors
If you live in a rural area, try talking with your neighbors and local farmers to find out if any of them would be interested in selling their property. And you may be able to negotiate a better deal with a local neighbor or farmer, especially if you know the seller personally.
Know What Youre Getting Into
While its not impossible to find a great deal on farms and ranches, it is a rarity. After all, farms and ranches produce income sometimes a significant amount of income. For this reason, you should be wary of deals that seem too good to be true because they often are. Before committing to purchasing farmland, make sure that you understand exactly what youre getting. This means understanding the soils condition and ensuring that the property has an adequate water supply and drainage.
Even at bargain prices, farms and ranches still require a rather hefty investment. Make sure that you know exactly what repairs youll have to make, so you can incorporate this into your budget. Its highly recommended that you work with a real estate agent who specializes in farms and ranches. This will minimize your risk of purchasing a property that will cost more than its worth.
Of course, youll also need to ensure that you understand the income-producing capabilities of the farm or ranch before you buy. That farm down the street may be on the market for dirt cheap, but it may not produce enough income to support itself or provide you with a return.