More land

[dave1949]

Ay-uh. I grew up in Somerset co. Maine. High out flux of younger folks is an understatment. I made 18 summers and hit the road, never looked back. No jobs, VERY high taxes and no prospects. The hunting and fishing were great, but few can build a career on catching brook trout.
My parents tell me the real estate/land market is dismal. They also tell me if I want to buy a camp on a lake then now is the time!

I live near the Franklin-Somerset county line, about 30 min. drive into Skowhegan. I sure don't blame you for taking off for better opportunities. The taxes are high but, assuming one doesn't have a lot to tax , they aren't all that different than other states. We enjoy the solitude and natural surroundings.

There are some real bargains for camps/homes with a bit of acreage. They are selling well below what it would cost to recreate them starting with raw land. For lake front, the few around here seem to be not selling and not getting much cheaper either. If they aren't getting offers, it won't matter what price they ask - within reason. I guess unless the owners really fall on hard times, they can afford to keep it until the market gets better. Must be some bargains somewhere though.

Come back home Slacker where even the black flies miss you
Dave.

 

[buckeyefarmer]

So, it's not getting any cheaper is it?

Land in my area isn't getting cheaper, not really climbing right now, but not going down.

 

[dooleysm]

We paid $2500/acre for our 10 acres 5 years ago. There 4 40-65 acre tillable/wooded tracts for sale a couple miles down the road. They want $6000 - $6500/acre for them (more for the tillable). Of course, they've been for sale for about 9 months now. They are all on state or county roads though, whereas our land is on a shared gravel road.

Our county is a bit of an anomoly for the area though. We have the largest city within an hour and are consistently have among the top 5 lowest unemployment rates in the state. Lots of large industry in our county and good schools all around. You can buy all the land you want in surrounding counties for $2000/acre. You can find it well under that if you look a little bit.

 

[Charlton John]

I only own 3 acres but am young (35) and have 3 kids and another on the way. I would love to buy 10 to 20 acres but in my area land goes for 12-25 k and acre We just built our house about 4 yrs. ago. I love the house but want the land I have been trying to convince my wife to move again so I can get my land (this would be the 4th house in 14 yrs.) so she is not at all thrilled w/ the idea, having the more land is also of no real importance to her so I am in a tuff spot but keep nagging her everyday till hopefully she will crack one of these days

 

[jinman]

18 years ago, I bought a tract of land by mistake. It was shown in a catalog of land tracts up for a bid sale by the Texas Veterans Land Board. The description of the property was correct, but they put the wrong tract map in their catalog. I thought it was the tract next to two other tracts I own, thus giving me 33 contiguous acres. It turns out that I bought this land at a minimum bid price because nobody else bid on it. Surely, they all thought the tract was the one next to me with a big gully, and that left this beautiful tract orphaned in the sale. I bought 11 acres for $18,850, financed for 30 years with the TX VLB with only a $375 administrative fee. My payments were $152 per month.

While I've owned the property for 18 years, I never improved it with fences, but I have done extensive cleanup of undergrowth to restore native grasses and wildflowers. I've also done erosion control and drainage projects, but everything I've done has been with my tractor. The land is multilevel and has a gorgeous view to the horizon. It's only .8 miles down a county road from a major 4-lane US highway.

I just sold that land this last year for $65,000. I could have got a little more for it, but I like the couple who bought it and reduced it from the $72k asking price I had on it.

All things considered, I made about $25k on my sale after adjusting the cost basis for interest paid and closing costs of the recent sale. I have deducted the property taxes each year from my income taxes, so I haven't entered them into the equation. I have to claim the property as a long term capital gain on a business investment on my taxes. I still have enough other deductions to offset any taxes though.

So, if you look at this sale on the surface, it seems like I paid $18,850 for some property and sold it for $65k, a great profit. The truth is that undeveloped real estate is not a good investment. Had I put that money in a good IRA over the years, I'd probably be better off because it would have grown tax free. Even though the price of land has skyrocketed, it is still not the best thing to do with your money unless you can keep it for a short period of time (at least one year) and sell it for a big gain. I feel lucky to have made out as well as I did on this sale.

 

[keegs]

18 years ago, I bought a tract of land by mistake. It was shown in a catalog of land tracts up for a bid sale by the Texas Veterans Land Board. The description of the property was correct, but they put the wrong tract map in their catalog. I thought it was the tract next to two other tracts I own, thus giving me 33 contiguous acres. It turns out that I bought this land at a minimum bid price because nobody else bid on it. Surely, they all thought the tract was the one next to me with a big gully, and that left this beautiful tract orphaned in the sale. I bought 11 acres for $18,850, financed for 30 years with the TX VLB with only a $375 administrative fee. My payments were $152 per month.

While I've owned the property for 18 years, I never improved it with fences, but I have done extensive cleanup of undergrowth to restore native grasses and wildflowers. I've also done erosion control and drainage projects, but everything I've done has been with my tractor. The land is multilevel and has a gorgeous view to the horizon. It's only .8 miles down a county road from a major 4-lane US highway.

I just sold that land this last year for $65,000. I could have got a little more for it, but I like the couple who bought it and reduced it from the $72k asking price I had on it.

All things considered, I made about $25k on my sale after adjusting the cost basis for interest paid and closing costs of the recent sale. I have deducted the property taxes each year from my income taxes, so I haven't entered them into the equation. I have to claim the property as a long term capital gain on a business investment on my taxes. I still have enough other deductions to offset any taxes though.

So, if you look at this sale on the surface, it seems like I paid $18,850 for some property and sold it for $65k, a great profit. The truth is that undeveloped real estate is not a good investment. Had I put that money in a good IRA over the years, I'd probably be better off because it would have grown tax free. Even though the price of land has skyrocketed, it is still not the best thing to do with your money unless you can keep it for a short period of time (at least one year) and sell it for a big gain. I feel lucky to have made out as well as I did on this sale.

Jin...if you look at the performance of the DOW since 1992, you didn't do too bad.

 

[kevindsingleton]

I only own 3 acres but am young (35) and have 3 kids and another on the way. I would love to buy 10 to 20 acres but in my area land goes for 12-25 k and acre We just built our house about 4 yrs. ago. I love the house but want the land I have been trying to convince my wife to move again so I can get my land (this would be the 4th house in 14 yrs.) so she is not at all thrilled w/ the idea, having the more land is also of no real importance to her so I am in a tuff spot but keep nagging her everyday till hopefully she will crack one of these days

She'll crack, for sure! Probably your noggin', if you keep naggin'!

We have about 25 acres, mostly wooded, and I plan to keep it that way. I'll put in some improvements, and some trails, but I'm not looking to get into farming, at all. We're bordered by a state highway, a railway, and our road, so the two neighbors on either side are all I have to worry about, and they're no problem, at all.

I'll buy the ~10 acres to the south, if it ever comes up, but I don't need to. My little plot is plenty for what I want to do, for the rest of my life.

 

[Richard]

If you can buy it and are open to it, then I'd say go for it for many of the reasons above.

I would also suggest that you NOT contemplate splitting the purchase with your sister, brother, cousin if at all possible (not that you suggested you would do that).

My father in law once bought 500 acres. Being somewhat of a cheapskate, he decided he wanted the land but didn't want to pay for it all so he offered his mother & sister a third each.

Long story short... TVA took half the farm years ago for a local lake so now we're talking about 250 acres but....

His mother passed and left her 1/3'rd to her three children (my father in law, his two sisters) so one sister owned an original 1/3'rd and now inherets 1/9th. My FIL owned 1/3'rd and inheereted 1/9'th and so on.

Last sister inherets 1/9'th and never owned more. She's now passed and her 5 kids own essentially, 1/45'th as her 1/9'th is split 5 ways.

When the my father in laws (who is 86) brother in law passes (90, the sister has already passed) then their 1/3'rd plus 1/9'th will go to their three children and when my father in law passes.... his goes to 5 kids....

You start to see the problem.

If you get the land, get it for yourself BUT.... perhaps, get it as a possible inheritance for your children in the future. They might take it over in 45 years from now and have a huge asset because of your foresight. If not, they'll have a nice place to visit.

 

[Charlton John]

She'll crack, for sure! Probably your noggin', if you keep naggin'!

Funny Stuff! Oh dont worry I will keep naggin, I have a high tolerance for pain so I should be fine. If I had your sized parcel I wouldnt need to nag

 

[bdeboer]

One thing to consider on land at least in our area is to get an ag. exemption. In our case a neighbor cuts it for hay. The tax savings vs. a building lot on 9 acres we converted back to ag. was around $1800.

 

[riptides]

... The truth is that undeveloped real estate is not a good investment. Had I put that money in a good IRA over the years, I'd probably be better off because it would have grown tax free.

Don't fret, over the years I bet that land gave you some happy dreams/goals and thoughts...

IRA's don't do that.

 

[polo1665]

One thing to consider on land at least in our area is to get an ag. exemption. In our case a neighbor cuts it for hay. The tax savings vs. a building lot on 9 acres we converted back to ag. was around $1800.

You've got to do your homework in regards agricultural exemptions. In our area its called CAUV (current agricultural use value) and it can save you a little money on your property taxes each year, but you have to actively farm 10 acres in order to qualify. Beware of buying parcels of land that have been split off of larger plots, this is why.
We bought our propery at auction. The owner had split his 160 acres into 5 parcels to auction off, we bought 33 acres and the house. About 4 acres of the 33 we purchased was being farmed, with about 3 additional acres of open land that could be farmed, the rest was wooded and unsuitable for farming. I visited the county tax office to inquire about the CAUV tax reduction and was informed that unless I was able to actively farm 10 acres of the 33, I would not qualify for the tax reduction. "No big deal" I thought, I will just have to pay a little more property tax. I was then informed that if I was unable to qualify for CAUV that the county would recoup the last three years worth of savings from us (myself and the two buyers of the other four parcels). Ended up costing me a little over $1,200 in extra property tax this year. No idea how much the others had to pay.
In hindsight, if I would've known it would not have changed my purchase decision, but it sure made me feel kinda stupid that I had not done my homework before hand. I made darn sure that this tax had already been recouped from the previous owners of the adjoining land we bought in December.


Mark

 

[blunosr]

Interesting discussion. I'm one of the "young" ones who abandonned Nova Scotia for better opportunities in the West. I work in Northern BC and have a house here in town. I will return to Nova Scotia when I retire, and have recently bought an old run-down farm (40ac). The prices there are ridiculously low! Sad really. I love my home, and hate to see such low values there. I paid $38k for 40 acres with 2500' of beautiful river front, two nice ponds, about 30ac tillable, an old tractor shed, and a huge old barn (which I have since torn down). I'm mowing the hay fields and have built a nice cottage on the river.
I really don't see that real estate prices will ever increase there. No jobs/industry and a huge outflow of young, motivated people and that has a negative affect on the local economy. But, as we baby-boomers, who have gone elsewhere to make our stake in the world, retire, now is a good opportunity to buy back home and hopefully have a very happy retirement (10 more years to go...). I intend to farm my land in retirement. I hope lots of us (displaced Maritimers) return home and bring the old abandonned farms back to some form of production. It would be good to see a renaissance in Nova Scotia!

Bye for now,

Troy Boyd

 

[warhammer]

My wife and I bought 38 acres a couple of years back. 29 of those acres had been row cropped for at least the last 60 years. The other 9 were so overgrown that walking through them was tough and there were some gullies that had been allowed to erode and become very deep. There is also an old metal barn that was built in 1950 that is structurally sound but needed work on the doors, paint etc.
I found pretty early on that it makes more sense to hire out some stuff as it is actually cheaper AND faster to get someone in that knows exactly how to square something away and has appropriate sized equipment to do so than to do it myself. So far that has meant getting lots of estimates and hiring out the land clearing, sprigging a few acres in coastal and repairing and rehanging 60 year old large barn doors.
All other work has been done by me and my tractor as my wife and kids are not interested in farming. Strangely enough neither was I until we got the farm.
I think the acreage we have is enough to keep me busy now. My plan is that by the time I am of retirement age(I am 53 now) all the heavy lifting to fix things, establish pastures, build fence, utilities, small cabin etc. will be done and the upkeep will be manageable.
That being said in a perfect world I'd love to buy the land all around me to ensure that it stayed rural.

Warhammer

We have 6 acres and have a good sized house. We have two horses and can target shoot do all the rule living things we want to do. All we wanted to do when we moved out here 11 years ago was to plant trees, ride horses, tractor around. I really don't need more land but part of me wants to buy the land that is for sale next to me.

My question is for people that have lived for years on 10-20 acres and are getting older. Do you wish that you had a smaller place to keep up or are you still grad you have that size of a place?

 

[Obed]

We bought 30 acres and are currently building a house on it. The adjacent 15 acres were for sale on the MLS. When we looked at the 15 acres, we asked the realtor about the 30 acres beside it. The realtor said the 30 acre tract was owned by the brother of the man who was selling the 15 acres. We decided we would rather have the 30 acres instead of the 15 acres and were able to purchase the 30 acre tract from the brother. We later made an offer on the 15 acres but asked the owner for a lease with the option to purchase because we didn't want to go in debt. The offer was denied because the owner wanted to sell outright. Then my wife got pregnant and we lost her income when the baby came. In hindsight, we're glad our offer for the 15 additional acres was rejected.

Mffarmall, in your case, since the bigger tract will unlikely generate income enough to pay for itself, it is a luxury and should only be purchased after all your non-luxuries have been provided for. People who are smart with money pay cash for luxuries. People who pay for luxuries using debt end up needing Obama to bail them out. If you have no debt but your current house, your current house payment is no more than 25% of your take home pay, you are able to fund the larger tract with cash without going deeper in debt for the purchase, are putting 15% of your income into retirement, have adequate amount of life insurance, and have your kid's college funds fully funded, then go ahead and go for the upgrade.

 

[schmism]

like i said earlyer... we are trying to aquire the ground behind us and across the road is another small 5-7 acre hay feild that they dont till becuase its such a weird shaped plot on a hill...

but it would be perfect hay for my alpaca

im trying to stay under $3K an acre, $2000/acre is were im starting.

 

[Tororider]

Mffarmall, in your case, since the bigger tract will unlikely generate income enough to pay for itself, it is a luxury and should only be purchased after all your non-luxuries have been provided for. People who are smart with money pay cash for luxuries. People who pay for luxuries using debt end up needing Obama to bail them out. If you have no debt but your current house, your current house payment is no more than 25% of your take home pay, you are able to fund the larger tract with cash without going deeper in debt for the purchase, are putting 15% of your income into retirement, have adequate amount of life insurance, and have your kid's college funds fully funded, then go ahead and go for the upgrade.

Obed, are you sure this isn't Dave Ramsey? Good advice. If more people took personal responsibility and took that advice we wouldn't be in this mess. Well I guess if the government took some responsibilty, both parties, we wouldn't be here, anyways, good advice.

Hope you can get the property, as someone else said, they aren't making any more of it.

 

[bdeboer]

You've got to do your homework in regards agricultural exemptions. In our area its called CAUV (current agricultural use value) and it can save you a little money on your property taxes each year, but you have to actively farm 10 acres in order to qualify. Beware of buying parcels of land that have been split off of larger plots, this is why.

My understanding is that the ten acres only has to do with ownership, not actual acres farmed. If I sell the land or develop it, then the 3 years have to paid back. They (the county) do not make it easy to convert or keep CAUV here either.

 

[polo1665]

My understanding is that the ten acres only has to do with ownership, not actual acres farmed. If I sell the land or develop it, then the 3 years have to paid back. They (the county) do not make it easy to convert or keep CAUV here either.

Check with your county office if you haven't already. I was specifically told that 10 acres of the land had to be actively farmed. I have read that the acreage can also be considered if it has "layed dormant or falllow for up to one year" under certain cicumstances. The guy in the office even checked aerial photos to see if another open field that exists would get me to the ten acres, it did not, so I am paying the recoupment this year. The people who bought the adjoining parcels are also having to pony up the recoupment penalty also, one did last year, and the other will have to pay up next year. Here is a link to some info on the CAUV program in Ohio

Current Agricultural Use Value Assessment in Ohio, CDFS-1267-99

 

[MarkV]

We recently put 30 acres into a conservation land program, basically agreeing not to harvest trees for 10 years, and it is the same situation. If we were to sell during the 10 year period we would be responsible to refund the tax savings if the new owners decided to log the property. As I recall you had to have at least 10 acres of woodland to qualify.

MarkV