Let’s say that you have a growing interest in making a land investment. Good. I think that it’s a great idea. It’s a great investment, if done properly, and it’s a whole new way of life. You’ll be changed by it.
There are several basic considerations to keep in mind, regardless of what type of investment you want to make, at least in my mind.
First, let’s assume that, after you make a purchase, you will want to visit the property at least periodically. Unless there is some overriding reason to do otherwise, try to find a property that’s no more than one or two hours’ drive (three hours can seem like a lifetime, driving home on a Sunday night) from either your home (if you live in a small town or a small-sized to medium-sized city) or at least from the outer boundaries of your metro area (if you live in Atlanta or Nashville, for instance).
Second, let’s face it, some rural areas are “nicer” than others. As you begin identifying parcels that interest you, spend some time in the areas around the parcels. Observe the condition of the land and, particularly, homes and home sites near the parcels. No homes nearby would be considerably better than a significant number of poorly-maintained homes/home sites. You’re observing the neighborhood, as you would when considering the purchase or rental of a home for yourself. I would say that a five-mile radius around the parcel is sufficient, but you’ll have to satisfy yourself, as far as that goes.
Third, make sure that there is really good, convenient access to the property from a public road – a county road or a state/federal highway. This can be obtained either by actual frontage on a public road or by a deeded easement or right of way through an adjoining landowner. With respect to deeded easements and rights of way, there are varying levels of convenience and security associated with them.
In some cases, you may need to pass through one or more locked gates on the way to your property. Is that a bad thing? Not necessarily. If you have to pass through locked gates to get to your property, then so do others who may have no business on your property. It’s a trade-off.
For me, the ideal setup is frontage on a public road with a gate you can secure either with a manual padlock or combination lock or with an electric gate. I’ve installed a number of electric gates on various properties, They are somewhat expensive, but there’s nothing like pulling up and clicking that clicker or just punching in a code to get through the gate.
Fourth, and the electric gate thing brings this to mind, check for the availability of utilities on your target parcels. Obviously, having electricity available nearby or already on the property is a big benefit. But, it may be that you don’t plan to ever need electricity on your investment tract(s). In that case, the electricity thing is obviously moot. If, however, you think you may want to someday build a lodge or a barn or a shed or something of that nature, electricity is a big deal, indeed.
Fifth, soils are an important consideration.
An example is in the Black Belt region of Alabama. There, many tracts have prairie soil that, when it gets wet, my become very gummy and soft. Or, it may stay firm and very slippery. Either way, it’s just no fun at all. You may sink to your axles in it. Or, you may sit perfectly still while your wheels spin trying to gain traction and finding none. I’ve experienced each of these dilemmas, several times.
Forest and farm contractors do a good job of dealing with prairie soils, when they build roads. It’s not a deal breaker at all. It does illustrate the need to understand what you are buying.
In many place, more sandy or rocky type soils provide excellent travelling conditions even in wet weather. Just know that it’s something you need to consider.
If you are purchasing timberland as an investment, be sure to check on the timber markets available (within a MAXIMUM of 100 miles, 50 miles is better) to the property. The availability of timber markets can vary wildly from one region the next, and that will make a huge difference in the amount of returns you can expect from growing timber on your land.
You can call me for help on that.
So, after these prime considerations (and I may think of a few more to add later), there are a number of variables that will weigh more or less heavily in your mind – your personal preferences. Do you want access to shopping, restaurants, grocery stores, convenience stores, etc.? What about water for fishing and other recreation? Stuff like that. Are you making this investment purely for growing wealth? Is it a mix between recreation and investment potential that interests you? Are you considering farming and/or a CSA-type of operation on the property?
Identify which of these types of attributes of land investment tracts are important to you before you start looking.
This next bit is going to sound a bit strange to a lot of you. I suggest that you do not immediately contact an agent or broker with a laundry list. First, look at some of the land sales websites such as Lands of American, LandFlip, LandWatch and even Zillow (click here to see links), where land listed by several brokers are shown for a given region. Most of these sites also offer excellent filters. With those filters, you can, to a degree, zero-in on what you are looking for. I’ll be glad to “look over your shoulder” with suggestions, as you jump into this adventure. Even if it’s the first time you’ve looked at land listings, you’ll be a pro in no time.
The variety of property types, amenities, prices and everything else can be staggering. But, that makes it fun. After you have hopefully identified some parcels that pique your interest, we can investigate them. I can help you further evaluate various properties and, eventually, enter into negotiations with the seller and his/her representative.
In thirty years in the business, I don’t recall knowing anyone who regretted becoming a landowner. I’ve seen family members who inherited land sell it when they had no real connection to the land. Or, they sold when it was too geographically removed from their homes for them to enjoy. But, the ones I know who decided to become a landowner and bought-in have greatly enjoyed it. Sure, some of them have acquired, sold and then re-acquired new property. But, they tend to stay in the game. Land ownership has become a part of them. It’s an investment, yes. But, it’s also a way of life – and a good one for you and future generations.
We operate in the following Alabama Counties