RE: borrowing money to buy land
 

My land is in Richland County, Illinois. I got it just in time because good hunting woods are probably up to around 2000 an acre by now. I am paid once a month, so just send in one payment. However, I try to add extra to each payment to equal at least one months payment by the end of the year. I understand that will cut down the principle somewhat.

RE: borrowing money to buy land
 

I've bought 180 acres in north central KS. in the last 3 years, first 100 acres then the attached 80. My wife and I have excellent credit and were able to put down 15%. My brother farms the land for me at the above mentioned 1/3 mine, 2/3 his rate. The average price I paid for the two pieces is right at $540/acre. I just sold my share of soybeans and with this income, plus my milo and wheat, and government payments, my land is going to fall justa mere $420 short of paying for itself this year. I have just over $7000 of income and just over that for all expences including property tax, fertilizer, herbicide, monthly payment, etc. Seems like a great deal, huh! BUT, in farming there is no gaurantee of income, CRP payments come close to it for the life of the program that the CRP is signed up for, SO take that into concideration. The land may make money one year, or several years, BUT make sure that you don't get yourself in the situation that you are relying on the land to make an income. Just like buying a house, only bite off what you can chew and make sure you leave enough financial squiggle room incase hard times fall your way!
They ain't making any more land, IMO, it's a great investment! I can remember when my dad bought his last 1/4 section of land and paid $315/acre and he thought that price was rediculous! There is a 1/4 section that was recently for sale in that area that didn't have near the income potential as my land does, and it sold for $800/acre! It's not getting any cheaper!

RE: borrowing money to buy land
 

Howler, you're absolutely right, there is no guarantee of income for a farmer, but that's part of the thrill, isn't it?

ParrotHead, didn't mean to ruffle any feathers. You're doing very well for yourself obviously. Different stages in life and I obviously didn't think before I typed.

I'm looking at an 80 in southern mo. It's 1400/acre and is about 50-60% timber and hilled where the surrounding five miles is flat. I'm going to sit the stand in the adjoining property Thanksgiving morning with my buddy. I haven't seen the portion of property that is currently pasture but I'm not sure how viable it would be to cash rent maybe 20-25 acres. I'm having trouble justifying a hunting property (even as solid as this is) that doesn't have the potential of paying for a good portion of itself in cash rent. Other than putting it in CRP or turning it to cropland (if it's even feasible at that remote end of the 80), thinning out the hardwoods (one time deal)... I'm not seeing much other income potential other than maybe getting a few dozen bales off the pasture. I sure as heck don't want to run cattle on it.

RE: borrowing money to buy land
 

Hey man no hard feeling I not that kind of guy. It is different strokes for different folks. I keep telling people they need to buy their own land. I believe it will get to the point where if you dont have your own land you wont be able to hunt. It may be 20 years down the line, but look where things have gone in the past 15. 15 years ago no one leased land in IN. Now it is very common,

RE: borrowing money to buy land
 

Howler, my jaw is on the floor at those land prices. $315 an acre. There was a piece of land 90 acres that just sold down by me in SE Indiana. All hills and valleys, all woods no openings or building sites. $340,000. Another farm by where I live which was 190 acres and they already logged the snot out of it and 100 acres was prime farm ground, last year the guy got 240 bushel an acre in corn. It went for $590,000. A farmer bought it.

RE: borrowing money to buy land
 

Yep, that part of Kansas sounds like heaven in terms of land prices. In my part of Illinois, wooded hilly land went for $350 an acre 25 yeas ago, often with few takers. The price hadsince increasedfour or fivefold. good farmland is now up around 3000 to 3500 an acre. Its even worse in some of the really hot deer hunting areas. Over around Pikecounty and points north, I believe that tracts of mostly woods are way over $3000 an acre. My motto is buy your own land even if you have to sellall your "toys" to do so.

RE: borrowing money to buy land
 

Another good source of income is hay. I have six acres of alfalfa hay. It goes for 3.50 per square bale. Farmer charges me $1 per bale and that covers from cutting to the bale. I got 5 cuttings this year. Seed can be written off. I would highly recommend Round Up Ready alfalfa. It cost more but it is worth it.

RE: borrowing money to buy land
 

Interesting thread. Just so I understand, in some areas you can get government contracts (WHIP program maybe?) to pay you to grow crops and leave standing? Or you can get local farmers to lease the fields from you to grow their crops and you get a percentage of the sale of them?

I purchased a little over 40 acres in southern Colorado last year. I am so happy that I did. We actually havested 2 cows and a bull near my property this year. It's a 9,000 feet with timber and canyons so no chance for agriculture there but that's ok.

Good luck finding some land to call your own . . . Rob

RE: borrowing money to buy land
 

here in ohio if you can find land for around 1500 an acre your doing great. there is some land cheeper but its real hilly. wont be long tho and ill have some land

Owner Financing Via Land Installment Contracts
 

I know some sellers, including my company, Rural Retreats (www.RurRet.com),offer owner financing for vacant land. This is usually accomplished via a "Land Installment Contract" by which you agree to pay a certain amount down (I usually require 20%)and then monthly payments over a period of time (usually 10-20 years) together with all other costs of the property (taxes, insurance, etc.). This contract is then recorded in the county's official records to give the buyer proof of his interest in the land. Upon completion of the contract (i.e. full repayment of the purchase price), the seller gives the buyer a deed for the land. One thing to be wary of, however, is that many sellers who use Land InstallmentContracts do not allow for prepayment/early payoff of the principal without a penalty because they want to be sure they get their interest. I never charge a penaltyfor prepayment- make sure this is in writing in any contract you sign!

Thebenefits of Land Installment Contracts are (i) that it provides an alternative for those with creditthata bank would not find sufficient and (ii) the closing can occur quickly and costs are usuallyminimal (we usually only charge $100 for closing costs, which covers document preparation and recording fees). The negatives are (i) that the interest rates are usually higher thanbanks charge (we typically charge 12.5% - but this is offset by low closing costs and our allowance for early payoff without penalty - if you can get financing from a bank after awhile because your credit improves/you gain equity in the property/you come into some money then you can pay it off early and avoid most ofthe interest) because sellers are taking on extra risk (if you have really good credit you'll just go to a bank)and typically have high costs of capital themselves and (ii) you have to read the contracts closely and ensure that thecontract is recorded in the Official Recordsto be sure you're not getting ripped off (i.e. prepayment penalties, tricky interest calculations).

I hope this information is helpful to anyone who is thinking about buying vacant land and is considering going with owner financing!

If you are looking for rural land in Southern Ohio/WV, please take a look at what we have to offer at www.RurRet.com or give me an email at [email protected].