For some people, buying a farm can be a huge part of the American dream. Not only do you instantly have your own business, but you get the chance to work with your hands and physically produce something.
If you're considering buying farmland and want to make sure you're making the right decision, these are some of the most important things you should consider first.
What’s the Market Looking Like?
Although you might not think the market is going to be affecting the far-out rural areas: these are the spaces that are being affected the most. Many people are investing in farmland and rural areas because they think it'll be an easy flip, and this has driven property costs through the roof.
Look at the history of property prices in the area you’re looking at, and consider if it would be worth waiting six months to a year until the market has cooled down to something more affordable.
What Are the Local Codes and Regulations?
Are the local codes and regulations on your side? Some areas are automatically set up to be developed into housing property, and buying them for farmland won't work. Check with local cities or municipalities on what the rules for the land are, what you can grow or build on it, and any other information you need.
Where Are Your Water Sources?
As large of a decision as whether you’re getting a cesspool vs. septic tank: you need to know where your water is coming from. Will you be using groundwater from wells? Surface water? Drainage ponds and rain? Or will you be using municipal water? A clean source of water is vital, and you need to be able to store it safely. Safe water storage means keeping it away from sunlight, sealed, and checking on it to ensure it’s not growing anything before you use it on your crops or animals. Get to know the water sources of any property you look at before you decide whether or not to buy it.
What's Your Ten-Year Plan?
As your property is used, what do you want to happen within the next ten years? Are you looking at barndominium floor plans and planning on building a rentable community? Or are you hoping to expand your livestock space to the land around your property by then? Set a realistic goal for yourself and the property, and then work backward and decide what you need to do within the next ten years to make that a reality.
How Much Land Do You Need?
How many acres of land do you really need? It's a good rule of thumb to get more land than your initial needs to ensure you have room to grow. Beyond that, it depends on what you're going to use your property for. For instance, for every cow you have, you'll want to own around 1.8 acres of land that they can roam. If you're growing crops, land buyers usually look for at least two acres to be self-sufficient: and hundreds of times that, if you're planning on selling the produce, you grow.
Should the Property Be Irrigated?
Are you going to need an irrigation system? This is a good idea to consider if you're growing crops or think you might want to in the future. Water is vital to all life, and with how the droughts look in 2022: if you're planning on farming, you will need a watering system. Look at how the land is laid out and how close the water source is, and think about whether this would work for your needs.
Will You Need Employees to Help Maintain It?
Are you going to hire people to help manage and maintain your land? If so, they should be considered in the budget. Although you may be able to afford a huge amount upfront, if you’re going to be paying employees to help with the work: you don’t want to risk failing to have the budget to pay them. Place their wages into your budget before you buy any property.
Will You Want to Live on the Land?
Living on your farmland isn’t a terrible idea if you’re running it mostly on your own. Not only does living on it give you the chance to take time and work the land whenever it needs it: but it also encourages you to consider what other building construction type your property could handle. Whether you're building a small farmhouse for yourself, or you're setting up a barndominium you only plan to live in for the first year, you'll need to have the property that can handle that.
A Farm Can Be a Good Investment in the Right Market
Although real estate prices have been going wild for the last couple of years: it’s not a bad time to consider buying a farm. Ask yourself some of these questions, and be prepared before your purchase.
Todd Gillman is the content director for the Innovative Building Materials blog and a content writer for the building materials industry. He is focused on helping fellow homeowners, contractors, and architects discover materials and methods of construction that save money, improve energy efficiency, and increase property value.