How to justify buying a little piece of property?

[shooterdon]

I have known more unsuccessful cattle owners than successful ones. If you do not know enough about that business to work the numbers you will regret buying it.

Cattle need work. How does your wife feel about that?

 

[4570Man]

I have known more unsuccessful cattle owners than successful ones. If you do not know enough about that business to work the numbers you will regret buying it.

Cattle need work. How does your wife feel about that?

Running cattle on $35k an acre land doesn’t sound very profitable to me.

 

[dodge man]

I live in Western Illinois and we have sone of the best farm ground in the world. It’s selling now for over $10k an acre, no where near $35k an acre. Unless it has future development potential, like a Walmart or a high end subdivision, maybe gold or oil, it’s never going to pencil out as a good buy. It’s a good buy if you have the money burning a hole in your pocket and want it badly. It’s overpriced, I’d pass.

 

[plowhog]

I still don't understand why you want the land. If you need the land to make money in order to justify its cost, and there is no viable way that can happen, your decision is already made.

But if you want to lock it up because it is an adjacent parcel, for perceived value or to prevent encroachment, there are possible options. It is very difficult to finance or obtain a loan on raw land. And not a lot of folks willing to pony up cash. So you might consider making an offer with a small downpayment and seller financing. Lock it up with little out of pocket. Or, offer $$ for a future right of first refusal with an agreement recorded onto the deed. It's worth paying something for that. Suppose the owner got in a bind and was willing to accept half what it is worth to raise some quick cash. If you had that option in place (and recorded) you would have the chance to be the buyer under those circumstances.

btw I am still kicking myself I did not buy an adjacent parcel about 5 years ago. Someone else did and has made numerous very objectionable improvements (RV, etc.) plus run it into the ground with trash, clutter, etc. Sawed an incredible amount of trees down so his tiny solar panel could keep up with the battery needs of folks living in an RV. Really regret not locking it up when I could have.

 

[2manyrocks]

Having control over adjacent land as a buffer can sometimes be important. Sometimes you get a new neighbor that's good. Sometimes not.

But in this instance the price of $35k an acre for 10 acres seems to be the sticking point. Don't know anything about those 10 acres or the local real estate market to be able to say if the asking price is in line with other property in the OP's area.

The other thing I don't know is the extent to which prices are just high because the dollar's value is so low. Or is the seller fishing with the OP to see if the OP will pay this much? Or is the seller looking to hit a home run if the seller can luck into someone paying that much?

 

[CloverKnollFarms]

I was told I overpaid for 8 acres at $6k per acre. I like to make the land pay for itself, even if only over time. Currently looking for acreage in the Bluegrass region of KY, which is quite expensive… even so, $35k per acre is a no go. That land will never pay, until it’s sold years later.
I'm much more comfortable at $10k per acre... and it's out there, it just takes time. I don't know what makes 10 acres worth $350k

 

[JJT]

Many years ago I built on a 30 acre parcel. When the adjoining 10 acre lot came up for sale I snatched it up. Same thing for another 10 acre parcel one lot over. I like the buffer. 20 years later, no regrets. I've had several good offers to buy the vacant lots over the years, the answer is always no.

Would I buy another adjoining 10 acre parcel for $350,000?, no frigging way. If that's the going rate and you have the spare cash just sitting around, go for it. It all depends on your personal situation.

 

[EddieWalker]

$35,000 an acre sounds like land that's really close to a big city. I have 40 acres that's less then an hour from DFW with city water that might sell for $10,000 an acre, but I think $8,000 an acre is more realistic with it being so overgrown. My long term goal is to clean it up, maybe turn it into a hay pasture, and wait for it's to increase in value to something truly absurd. I'd take $35,000 an acre for it today if that was possible!!!!

The 68 acres that I live on has gone up in value, but not like the land closer to DFW. Not far from me, some commercial land just sold and they where asking $14,000 an acre, but I don't know what it sold for. They are putting a new County Road through it and dividing it up into small pieces that are for sale now. I saw that one of them is asking $15,000 an acre.

If you are really thinking about buying that 10 acres, I would check the comps in your area to see if it's a realistic price, or if it's just a listing for somebody dumb enough to pay that, then they can have it, type of listing. I've seen some of those out there that have been for sale for over a decade.

I'm also a believer in low balling on a price just to see what happens. It makes the realtors angry, but who cares? It's how I bought my land, and I know of other guys that have also gotten good prices on land that was listed for absurd amounts. A solid offer will sometimes be enough to make it happen.

Another consideration that might affect the price of land is the economy. Is it going to get better or worse. Will the Stock Market crash and land values increase, or will banking crash and lending will dry up and land will decline in value? Will the seller need cash for other things and take a lower price, or do they care, and they will let it sit regardless of what's going on?

 

[big bubba]

OP: sympathize with the sky high prices of that acreage. hard to justify the price. hope at some point something comes up in your favor.
being of later life stage, i'll probably sell my 128 acre mt top farm in 5 yrs or so: 25 acres cleared, 103 in timber (last logged in the 50's) w/4 spring fed ponds. purchased in '77 for $210/acre. going to be hard to let it go, guess we have to learn to let go @ each life stage.
good luck in whatever you choose, regards.

 

[EddieWalker]

Big Bubba, are you near the Buffalo River area where the elk are? Every now and them, my wife and I talk about moving to a place with a mountain top view and where there are elk that we can see from time to time. Arkansas has come up as one of those places we've talked about. I doubt it will ever happen, but it's still fun to talk about around the fire on our back porch.