Pros and Cons of owning large acreage.

crown · Apr 30, 2004

I may have an opprotunity to purchase a 60.65 acre building lot in a rural subdivision. I currently own a 6.5 acre lot that I was planning on building on soon, a large custom home builder purchased the entire 34 lot subdivision consisting of home sites ranging form 5 to 20 acres with the one 60.65 acre site. He would like my lot and has expressed a willingness to swap the large lot is only that big because it does not perk well and 4 lots had to be combined to get a good perc. I currently live on 6 acres and very much enjoy the country life. My question how much work is involved in maintaining such a peice of property, I know nothing about livestock (cows, horses, etc) but they are allowed in the developement alpacas too. There is a small spring that runs through the property it looks as though I could build the house close to it or build a driveway over it and build further back. The land is a rolling pasture very few tress, and a small pond. I think I could get a neighbor friend of mine to cut the bulk of it in hay. This is a huge peice of land for me but I really like it /forums/images/graemlins/laugh.gifI just don't want to get in over my head. My better half really likes the smaller lot much better, but concedes that the house is her major contention and if I really wanted the large peice she would give her blessings, you get the picture I don't want to hear "I told you so" /forums/images/graemlins/blush.gif

Please give me your thoughts especially those of you have in excess of 50 acres.

Thanks in advance..

Junkman · Apr 30, 2004

I wouldn't want to be in a position where the property taxes are going to drive me out. A larger lot is nice, but the town might just consider all that land valuable and put a large assessment onto it. Unless you have a ton of money, I wouldn't even consider the swap. If it is such a great deal, why doesn't the developer put a house on it and sell it? He realizes the problems with huge lots... high taxes that limit the available buyers. I have 15 acres according to my land survey, and the town has my lot as 12 acres from the old description, on the tax rolls. If they knew about the other 3 acres of swamp land, it would be taxed as all the rest of the land. That would increase my assessment by about $30,000 and they tax that at $25.00 per thousand dollars of value. This would increase my tax bill by $750!! /forums/images/graemlins/frown.gif

MossRoad · May 1, 2004

Look into the zoning possibilities. Here, it is possible to have one acre set aside for your home and anything over 15 acres zoned as a classified wildlife habitat. You only pay $1.00 taxes on the wildlife part. A great deal for anyone with 15+ acres in a residential area.

There are also classified forests, highly errodable soil, wet land, etc... designations that can be used to lower your taxes. It is always worth looking into. Property rarely goes down in value. Our 20 acres doubled in value in 5 years.

As for maintaining it, what do you mean? Are you going to mow 60 acres like a lawn. Just maintain the part that you like and let the rest go back to nature. There is little to maintain, as ma nature is a very good caretaker.

Watch out for neighborhood covenants, restrictions, etc... those can bite you in the rear end.

DocHeb · May 1, 2004

I considered several lots with similiar properties when we were out looking. One was a 40 acre parcel surrounded by 2 acre homesites. All the 2 acre homesites viewed the 40 acres as "theirs" and used it for recreation/dirtbiking/snowmobiling etc., etc., etc. Trying to change that mindset would be difficult, and immediately pit neighbor-against-neighbor.

JimR · May 1, 2004

Make sure that the builder hasn't subdivided the 60 acres into lots with the town. He can still sell it as one lot. But the town will tax you as ? house lots. The taxes will kill you that way.

Airedale · May 1, 2004

Unless you have plenty of free time and are willing to do a lot of work starting up even a small farm from scratch is a daunting task. Take my word for it, I have been at it for twenty years and still have a ways to go. If I had it to do all over again I would wait and buy an existing farm in a good ag area and move in physical operating condition. More money yes but way less headaches. With everything there you can enjoy some actual farming and the country lifestyle right from the getgo. Larger the farm the more work and more taxes but also more versatile and fun in my opinion and the best setting there is to raise a large clan. All depends on how serious you want to get.

SnowRidge · May 1, 2004

I agree with what Moss Road said. The first thing you should do, if you haven't already done it, is to look at the property tax structure in that area. What kinds of exemptions may be available, and what do you have to do to qualify. Every state is different, but most have such things as ag, greenbelt, forestry, etc.

After you discover what the possibilities and requirements are, you can figure out what you would have to do with that property to qualify, and how much it might cost you in time and money versus what the savings would be.

Usually, the County Assessor's office is a good place to start. If they don't know the answers, they can tell you who does.

SnowRidge

riptides · May 1, 2004

Crown,

Oh man, like I am so excited for you, I cannot type. ARE YOU KIDDING.... do it. Land in VA is approaching the outrageous. Go for it. You can explore setting aside, or subdividing later for protection against easements and taxes.
Time is one thing on your side, because you will have it, the lot, and others will want it.
You will be creative in your financial plans, everyone is. Man, land is one thing you just cannot get enough of.

I gotta go calm down.....
-Mike Z. /forums/images/graemlins/grin.gif

cowboydoc · May 1, 2004

I believe in buying as much land as you can afford. Buying good land will outperform most other investments. As far as the work goes to me there is nothing better than working the land.

txdon · May 1, 2004

If you can afford the extra land and the yearly taxes go for it! The enjoyment of the extra land will outweigh the cons. Start planting trees now.

Jimbrown · May 1, 2004

Well I would check the tax situation and if bearable i would trade. I have 80 ac and wish I had 800. You do not have to maintain it all. Let it grow. I do not mow trim or do anything to most of mine I just let it grow. Does not bother me or any one else.

40Kchicks · May 1, 2004

If you like the property do it. Over time it will be a great investment.

Having land opens up a world of opportunities. You could lease it out to a farmer and do nothing with it but collect the checks or try raising different types of animals and see if you enjoy that or hay it or plant a forest or let it go natural. The list goes on and on. The property is only as much work as you want it to be. Maintaining 60 acres of pasture is less work than mowing and landscaping 6.5 acres. I would set aside about 1/3 of an acre for the house and landscape it nicely that way I don’t have to spend all my time mowing a monster yard.

The other thing you have to consider is that this can be a new business for you which gives you the ability to depreciate many things for the farm and write off supplies used for the farm. I don’t know about you but many of the things I wanted anyways can be wrote off my taxes because they are used on the farm, for example my tractor and implements, ATV’s, welder, shop tools, ect.

I have 40 acres and really enjoy it and my family enjoys it also. My wife and I just got our first horses and are enjoying the trails I made with the tractor. The kids don’t have friends that close so we run them around a lot but we also have a constant flow of friends bringing their kids out to visit and play on the farm.

As far as taxes go my property taxes are less that a lot in town. The land is in farm deferral which means I don’t pay taxes on it until it is taken out of deferral which will never happen and so just the house is taxed. I paid about $1500 for my property taxes last year. When I was living out in the country with 3 acres I paid about $2400. Check out your local taxes because they may be totally different.

I would carefully consider it and as long as there isn’t to be some problem with the property go for it.

Eric

dmccarty · May 1, 2004

crown,

I have done what you are asking. /forums/images/graemlins/grin.gif We have 54 acres. The land is divided into 10 lots and is part of a subdivision. The catch is that the land does not perc on most of the acerage.

The land is a lot of work. I have worked almost every Saturday for the last four years doing one thing or another. Once we get our house built alot of this work will go away. When we bought the land I figured it would take five years to get most of the work done that we wanted. This has pretty much worked out as planned. I have 1600 feet of road that I maintain and mow. I am slowing clearing a trail all around the property boundries for our use as well as making it easier to post. We have one five acre lot up for sale to generate some cash and will sell another lot to family so the plan is to end up with 45 acres or there abouts.

In NC to get an agriculture or timber tax valuation you have to live on the land or own it for four years. In January of 2005 we will qualify for the lower taxes. Even at the current tax rate its still not alot of money but we want to get the tax reduced to set a line in the sand for the future tax values.

Most of the work load on the property will decrease over time. There are only some many spetic fields to find/clear, driveways to build, trails to open and house sites to find/clear. I will have to continue to mow here and there but I figure that most of my work/tractor hours will be in the first 5-10 years. After that I just don't see putting that many hours into the land. I'll be able to enjoy it more. /forums/images/graemlins/grin.gif

My two cents, look into the tax issue, make sure there are no other issues with the land, and if everything is ok, buy it. My nearest neighbors on our land are at least 1,000 feet away. Which it was farther but I its much better than what we have now. /forums/images/graemlins/grin.gif

Good Luck.
Dan McCarty

California · May 1, 2004

( does not perk well and 4 lots had to be combined to get a good perc )

Like the others, if you can afford the future taxes then I would go for it.

The bad perc result should be researched carefully. Soil *that* bad might be so rocky that trees can't penetrate, or it might indicate a potential for flooding. Or some other unimagined problem.

Aside from this, I can't think of any other reason to decline this opportunity.

Poppa · May 2, 2004

Sure the taxes need to be checked out but lets get back to the 'Bad Perc". Those two items are actually pretty well tied togather. Having more land seems great unless you have more "Bad land". Some here have talked about splitting parts off for cash later on. Doesn't sound like you would be able to do this. I guess I would check into the Perc results very closely along with the Tax consequences to make sure you aren't buying one of those pieces of land that nobody wants.

I have never known a developer who wasn't trying to make money. /forums/images/graemlins/crazy.gif

Mike

riptides · May 2, 2004

Ya but on the perc...... all that is is money. /forums/images/graemlins/grin.gif Seriously. A lot up the corner, well a few miles away, "doesn't perk". This was market speak. Some guy get a good deal. Hey doesn't perk, right?
Brings in loaders and dirt. Lots of equipment. Lots of earth moving. Guess what?
Yup... perks.... on that lot now sits a million dollar +++ home.

Make mental note....

Mike Z. /forums/images/graemlins/grin.gif

Ricky_TX · May 2, 2004

They say there are no stupid questions, so here goes... What is a perc? /forums/images/graemlins/confused.gif

Bird · May 2, 2004

( What is a perc? )

Short for percolate, but this time instead of coffee, we're talking about how fast water will soak into the ground; i.e, how porous the soil is. /forums/images/graemlins/wink.gif

Bird · May 2, 2004

I don't understand the problem with ground that doesn't perc well. If it doesn't perc, you just install an aerobic system instead of the old septic system, and I'd much rather have the aerobic system anyway. In fact, that's what I would want even if I were building on land that had the best perc tests you can get.