Buying Land

[Straight Arrow]

looking to get my feet wet with a smaller property and hold onto it for awhile

In 1980 that's how I looked at a small mountain property with a little stream, thinking I'd sell it for college money for our kids. 'Never did need more college money, so built a rustic hunting cabin on it. Real estate price has jumped ginormously since ... but grandkids say, "Don't you ever sell it!" The property's family fun and love value is PRICELESS!

 

[cookchris]

If you’re planning to manage leases or develop the property further, it might be a good idea to consider forming an LLC or a land-holding company. It can help streamline management and significantly limit liability. We went down a similar path—got our land about three years ago, and now the house is almost ready. It’s been a long journey, but we’re finally at the stage where I get to focus on the fun stuff—right now, I’m checking out bath essentials from quince. Let me tell you, picking out towels and accessories is so much more enjoyable than choosing building materials and dealing with permits

 

[ElkCameraMan]

You can look into tax delinquency land and be able to get it for $2000 an acre for prime land. Message me as I do this as a business but slightly different

 

[Ballistic]

There are a quite a few states where this does pencil out to be be profitable. I've ran the numbers on a NM property that I almost bought last December. We put an offer in on that one and just couldn't come to an agreement on the elk tags (go figure). The seller wanted to keep them for the next 10 years as part of the deal because that is what the terms of their arrangement was with an outfitter and unfortunately that was what made the property have the selling price it did. We countered and offered them 100k less to have them keep the tags for 10 years and they thought we were joking. 1 Bull tag at 5k and 1 cow tag at 2k per year is 7k x 10 is 70k. Add in 10 years of interest and likelihood of those prices going up. Apparently they couldn't do math.

The property also was leased out for grazing. We didn't get a real value for this specific property but figured we could get a couple thousand a year for that especially since the property had year round water on it.

I also ran some numbers to do it on a parcel here in WI and it absolutely does work out. People are crazy here for their whitetails

How? Middle of the road deer land in Wisco is $6k an acre in a decent county. For only 120 acres that's $8,359/mo. plus property taxes etc. So not including taxes and other management costs you can pull over $100k/yr. in deer leasing on 120 Acres a year? No way.

If you have the cash there are better ways to make money in real estate, like all of them.

 

[Steiny77]

The only way to get significant income out of raw land that I've found is to develop it or high production farming and that requires good soils and adequate moisture.
I've purchased a lot of land over my lifetime and it is a big part of our net worth. The only way I was able to do so is because I had a high paying job. The income from the ground itself only covers a portion of the cost.

Having said that, once you get it paid off it's all gravy. Farm ground typically can generate enough income via cash rent or CRP programs to cover the taxes and provide some nice supplemental income forever. They're also not making any more of it so it should continue to increase in value considerably. Bought our first 100 acres for $750 / acre in 1989, it's easily worth 10X that now and has long since been paid for.

Land is a good investment and a good place to hold and protect your money long term but don't kid yourself into thinking it will pay for itself without drastically altering it.