Think you are ready to settle down and buy a farm? Settling down is probably the least of the tasks you’ll be doing if you own a farm but the reward can definitely be great. Here are some tips for buying farmland and how to go about it.
#1. Talk with an agent that understands how to buy farm land.
Buying farmland is not like traditional residential homes. There is a lot more involved and using an agent that is very new to either real estate or the agricultural field may mean you lose out on getting the property you really want or and up paying too much. Use an agent that is very well-versed in buying land, farm land, and the acreage that goes with a property including any outbuildings, barns, or structures.
#2. Be clear and realistic about your budget.
How much will you need to buy in order to support yourself and your farm? Make sure you understand how much income you need if you’re buying a working farm that will supply your income.
#3. The timetables for buying land might take longer.
Buying farm land will be different than a residential house and may take 2 to 3 times longer than a traditional residential transaction. Be patient, diligent, and be ready to go with the flow.
#4. Understand that applying for a home loan or land loan is different than a residential property.
You’ll need to talk to specific lenders about what you’ll need is a borrower in order to get the right loan. You may need a larger down payment and you may need to supply information on how the farm will sustain itself.
#5. What about a farm for rent?
Buying farm land may not be the right option for you. Leasing may be the next best choice. You want to reach a fair agreement for both sides of the deal to make it work successfully and be a win-win for all. You want to get everything in writing even if it might seem awkward at times. This can break down any unnecessary issues that might arise in the future and everyone has a clear understanding of their responsibilities.
Leasing can be tricky because the landlord could ask for cash rent, flexible rent, crop sharing, or other options so make sure you understand all of these different ways that the landlord can obtain the rent and that you agree to the terms.
#6. What about investing in farm land?
Farm land acres can be one of the best returns on a real estate investment. With lower commodity prices American farmers are not the only ones buying up this type of land. Chinese companies have been buying up farmland for several decades so investing in farming doesn’t necessarily have to be a large corporation decision. You can invest in farmland with a few simple tricks. Be sure to call me on how to invest in farm land in Snohomish County.