Buying farmland works a lot differently than buying a home. In other words, there is a lot more you need to consider. Before you jump in and buy your first piece of farmland, learn the things you should consider.
Get Matched with a Lender, Click Here.
Look Into the Taxes
First, you must understand the taxes. Luckily, today it’s easy to do your own research to find out what you need to know. You’ll need to know the
land’s zoning type as well as the amount of taxes owners paid in the past. While it won’t help you predict the future, seeing the historical pattern of taxes will help you determine what you might expect in the future.
A few things you should look for when reading the county documents include:
- The amount of taxes and their average change from year to year
- The type of zoning and if it fits within your needs for the land
- Will the zoning type make it easier or harder for you to obtain financing?
This should be your first step because if a piece of land doesn’t have the zoning you need, you’ll quickly move onto another piece of land. Why waste your time on land you cannot use? Of course, knowing the taxes and their historical patterns will help you determine if you can afford the taxes moving forward or if it’s a piece of land that would constantly keep you in financial distress.
Look Into the County Requirements
You won’t be buying land within the city limits, but that doesn’t mean there are not rules you must follow. Talk with the county officials to determine what rules you will have to follow. For example, if you plan to build a farm building on the land, is it going to be allowed? Will you need a building permit? Are there any other regulations that could affect the
type of business you plan to do on the land? These are all answers you need before you consider buying a piece of farmland.
Pay for an Inspection
If there are any outbuildings or equipment that will remain on the farmland, you should pay for a professional inspection of them. The inspection will help you determine if the cost of the land is worth what the seller is asking. It will also help you understand any work the property may need that will eat into your profits down the road.
Click to See the Latest Mortgage Rates.
If the outbuilding has mold growth or needs a new roof, this may not be something you want to take on at this time. If you have just enough to
buy the land and start your business, you won’t want to be bothered with work that needs to be done that you didn’t budget for yet.
Talk to the Neighbors
Buying farmland may mean you don’t have neighbors for at least 10 miles, but they are still your neighbors. If they own land that butts up next to your land, you’ll want to know what they plan to do with it and how well they care for it.
You’ll also want to know if any of their land or yours, for that matter, is protected because it’s wetlands or any type of protected land. Knowing these things ahead of time will help you make the right decision. What if the way you planned to build the farm suddenly doesn’t work because of the plans your neighbor has or because part of their land is protected?
Talk to an Insurance Agent
If you have any type of outbuildings, farm, or home on the farmland, you’ll need homeowner’s insurance. It pays to know the cost of that insurance before making a decision to buy it. What if the premiums are excessive? You might want to consider a different property. Talk with several agents to find out the cost and the reason if there is any type of increase in the premiums.
Protecting yourself before you buy farmland is crucial. You cannot ask too many questions! This is a very large investment that will hopefully bring you profits in the future. Talk with as many professionals as possible and ask as many questions as you can to make sure that you know exactly how to proceed.
Click Here to Get Matched With a Lender.