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Anyone have a clue on how to evaluate it as an investment?

IP
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Anyone have a clue on how to evaluate it as an investment?

As far as buying individual properties, no. But I bypassed that aspect and invested in LAND, a farmland REIT.

JLC
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Short term value trends to be tied to anticipated income especially grain prices. Adjusted for crops raised in the area and typical yield.

There must be national indexes and ways to adjust to local prices.
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Anyone have a clue on how to evaluate it as an investment?

There's at least 3 possible ways to make money.
1> "farm" it yourself - hire people to come do the planting, etc.
2> rent the land to a local farmer
3> sell it at an appreciated value (whether selling still as farmland or selling as lots for houses, or selling for other development)

The first is the most difficult to evaluate IMO. You have a lot of risks - crop yields, price for crops, price of people coming in to do work going up, etc.

The second requires a local farmer who is interested in renting the land - but can't (or doesn't want to) buy it. If it's that they can't - how do you know you'll get your rent money from them? If it's that they don't want to buy it - they probably think it's overpriced for what the land is worth.

The third may be a long time before you get money out of it. (but hopefully you can at least pay the taxes using income from the first 2 items in the meantime)
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So this is a 100+ acre farm with about 2000' frontage on a wonderful body of water that we love. We are not farmers, but the idea would be to buy and hold it, possibly renting out parcels to farmers, with an eye to possible subdivision down the road for vacation homes. The cabin part I understand. Farming fall back position, not so much. How do you even know if the soil is decent for farming? Farm has been around a while but I don't even know what questions to ask or who to google for help.

IP,
off to google the taxes
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Hire someone to do a soil test. Then hire or ask a professor at local community college with Ag dept to explain the results of soil test.

Subdividing farm land sounds easier than it is....one must consider local ordinances and if they would allow rezoning to residential. You should also look at flood plains and ensure not in a FEMA flood zone as that would make it more difficult to build (and more costly).

Personally I would base your decision on return on renting out land to a farmer. If you then in future develop the land, it's bonus return for you.
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Check out Web Soil Survey
https://websoilsurvey.sc.egov.usda.gov/App/HomePage.htm

Ditto the suggestion on soil testing - probably composite samples from appropriate depths in each of the main soil types. Not usually expensive at all, and can give an idea of crop yields.

Check particularly if it is classed by USDA as "Prime Farm Land Soils"

If the site is currently being farmed, does it use traditional fertilizers or is it organic?
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How do you even know if the soil is decent for farming?

Past history.

A 100+ acre farm is/was probably a small family farm.
The seller (or the people who have been leasing the land) would be able to tell you what they've been able to get for crops on it.

Knowing what you've said about your other properties, I suspect there's also some woodland along the waterfront. Which possibly means hunting - and that could be worth something as well. I have family that has farmland that is about half woodland/swampland and I'm sure there would be hunting parties that would love to rent out that land for deer season for a large sum. So I'd probably ask the neighbors if they're hunters, and if they know if they know if hunting has been done on the land, and if so if they know how the hunting has gone.

If the farm has been in production for a while they may have information from crop insurance that they've taken out on the crops in the past. (People have been known to lie to the government however - so...)
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Thanks everyone for your suggestions. The current owner seems to have inherited the land but doesn't work it. We have a university within an hour with an Agricultural department. I will call them to see if there is someone I can pay to advise me if we decide to go forward. Right now am just figuring out what I need to consider. That soil survey website looks interesting.

Yes, it would be great for hunting, hiking, kayaking, fishing. Not excessively far from a highway, and only about an hour from a large city, so great for vacation homes. In the pandemic, the trend I have seen on this waterfront has been from shacks to very nice homes. I know at least one farmer up there who would like it to plant hay, but that's tough on the soil and super cheap rent, so I think that would be a negative. He would also be a good historical reference, having a large farm farm in the family for years and being a good acquaintance.

Honestly, if the soil is bad, which would stun me, I am intrigued with regenerative agriculture. Just need to know to be able to figure out a good offer. Taxes are crazy cheap and we would pay cash, so letting it sit for the family to enjoy is not a bad option from a carrying cost POV. We have not kayaked that section of the water and it's just too cold to do so now. If we knew it were a good section, we probably wouldn't hesitate.

Thanks!

IP
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We have not kayaked that section of the water and it's just too cold to do so now. If we knew it were a good section, we probably wouldn't hesitate.

I would guess the cost of winter kayaking gear is a tiny fraction of what you would spend doing your due diligence on the property. And then you can kayak year round even if you don't buy the land!
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would like it to plant hay, but that's tough on the soil and super cheap rent, so I think that would be a negative.

Alfalfa and clover are reallly good crops for the soil.
Fixes nitrogen. Prevents erosion.
If the farmer is going to haul manure onto the land as well, that's going to be really good for the soil.
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I would guess the cost of winter kayaking gear is a tiny fraction of what you would spend doing your due diligence on the property. And then you can kayak year round even if you don't buy the land!

Probably so, but why would I want to torture myself that way?

IP,
not a fan of the cold and even less so of cold and wet!
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Your local agricultural extension service can be worth a chat. They are a govt agency under USDA working through your states ag university.

They know your area and should know what crops do well and what yields to expect.

They also do soil tests. And have extensive literature on crops or various farm issues and how to address them.

You used to find them listed in the blue pages of your phone book. Now it might take a Google search.
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