Choosing to purchase farmland can mean a lot of value for a minimal investment. Even better, former cropland that is developed into an excellent residential or forested property can increase in value quickly compared to a similarly-priced urban purchase.
Still, one of the biggest mistakes you can make when investing in farmland is not doing your research into the property. This is true no matter what you plan to use the land for. Before you commit to any purchases, make sure you’ve considered the 3 points below.
The Health of the Land
What are you planning to do on your property? The health of the property you’re looking at matters more than any other factor. This means no matter if you’re looking for land to invest in, manage as a hunting property, farm, or build on. Consider the following health-related factors before committing to any property.
- Water Sources and Quality
- Past Uses
- Neighbors’ Farming Practices
- Plant Life
If you are planning to farm on the property, or even have a garden, you may want to get the soil tested. This is sometimes offered as a free service from the county or a local university.
Zoning and Restrictions
First and foremost, you should know what the land you’re looking at is designated for. Is it a residential property? Set-aside and not meant to be farmed for a certain number of years? Conservation land? Unlike buying a house or lot in an urban setting, rural properties have many more designations, and some may be split into several different zones. It’s not uncommon for a single property to have a few acres for farming and a home while most of the property is placed in a forest reserve or a conservation contract.
Aside from official zones and designations, there are also natural zones to consider. Does the property exist on a flood plain? Is there a nearby river, and has that river had the same course over the last 40 or 50 years?
In addition to this, you should also know if the property has a legal access road. If other privately-owned parcels surround the property, an easement or additional agreement may have been established. However, this may not have been found “legally” and may only be a word-of-mouth agreement. Always make sure any easement or other covenant is in writing- just in case your current neighbors move on.
Though a farm can be a somewhat isolated place, it’s also a place of business for many. If you’re looking to buy a lot to live on, the practices of your soon-to-be neighbors can significantly affect your quality of life.
Further, while there may be no developments while you’re looking at a property, there may be some in the time it takes for you to apply for a building permit, etc. The last thing you want is to end up building a house downwind of a brand-new hog confinement.
Talking to your neighbors is a great way to get a feel for the area and learn about any property. You may even find that particular neighbors offer advantages over others. If you’re looking at small farms in Michigan, for example, some neighbors may allow you to hunt on their property or allow you to graze goats on their fields after harvest or on an off-year.