A 10-Step Checklist for Buying Rural Property

People invest in homes. They buy investment properties and most people already know this. But when it comes to buying a rural property, questions are raised, and people ask the reason why. To answer this question, we have prepared a 10-step checklist for buying.  

The very first and the most important of all points is low-interest rates.  

As per Texas A&M University's Dr Charles Gilliland, “Lack of lucrative investment alternatives make the decision to acquire land less costly than when stock market is booming.”  

It also seems that even higher oil prices and the threat of interest rate hike have done a little in these months to slow the process. In fact, the enthusiasm is getting translated into high prices.   

Farming is pretty much a status quo and most people buy rural land to be used as a hobby. Other than this, using rural land as recreational land is another main driver of buying rural property.   

Today, people even wish to relocate to peaceful areas or places that have a larger acreage base. For that, buying rural property can be the decision.   

But just like buying investment property, or residential houses, the buyer will have to make a smart choice based on facts and information.  

Conduct Market Research  

This may sound cliché but conducting market research is important. You should know when the prices rise and when is the right time to make a purchase. Just like any other property type, you must keep track of market prices. Also, check the possible extended territorial jurisdiction through the process and who can also help you in making a smart investment. To employ a real estate agent, contact Raine and Horne.  

The purpose of conducting market research is to understand the property market needs, the pricing policy, the rural real estate laws and changes in the policies, if any.   

If you hire a real estate professional, the entire process from conducting research and finalizing the deal will be taken care of by them. An experienced local realtor who knows the marketplace will make your journey of buying rural property easy and comfortable. In case of any doubt, you will be able to ask your realtor about recent comparable sales in the area before finalizing the offer. Also check with the county appraisal district for their valuation on properties being considered.  

Check the Infrastructure 

Here, infrastructure does not mean furniture, bathroom, and other facilities. But rural properties include the facility of water, sewer service, electricity, phone, cable connection, or internet services. Other than this, look for   road maintenance, school bus routes, and trash pickup facility.  

Make Improvements, If Needed 

Do not underestimate the value of existing campsites, barns, and other improvements that can become expensive. Most counties may need permits for installing septic systems, wells or other water facility systems. Before purchasing a tract without water or sewer in place, get an estimate from your local contractors and also talk to the neighbors to find out the actual depth and number of septic systems required for the soil conditions.  

Know the Codes and Restrictions 

If you buy rural property with the intent to subdivide, check county subdivision laws. Also, check the possible extended territorial jurisdiction of the nearby municipalities that may govern the area. Check if there is any restriction on the property that you are considering. Take time to consider how the restrictions, if any, could affect you. Also, consider how the restrictions will be viewed by the buyers in the near future.    

Take Advantage of the Property Tax Advantage 

The good news is that every state offers some type of agricultural property tax relief. All are geared at lowering the taxable value of agricultural production land, and reducing the property taxes on that land. Just check with your local tax assessor to know if your potential purchase may qualify for the tax credit, direct exemption or special appraisal. If it has existing ag-use tax exemptions, then learn the steps for keeping up with those exemptions. Beware that some commercial lenders need the buyer to rescind the exemption before taking up a rural home loan.  

Shop Insurance Rates! 

Many insurance carriers will not write down the homeowner's coverage outside the city limits. Farm credit lenders and the local realtors can definitely recommend insurers who offer rural property insurance. 

Understand Your Surroundings 

Pay attention to the use of land and also do not ignore restrictions, if any. Ask yourself questions like are there any intensive livestock operations next door? Is there a noisy highway or a proposed highway? Are you allowed to have any commercial development on the neighboring tracts and so on? If you buy a piece of rural property and discover that there is a nuisance next door, it will be problematic for you to sell in the near future.  

Environmental Factors Are Important Too 

Two primary potential environmental concerns are the presence of endangered species, and environmental contamination from the actions of previous owners of the land.  

Areas that are designated for endangered species can get really restrictive in the use of your property, potentially impacting your ability to clear the brush, add buildings and also fully enjoy your rural property. 

If you think that there is a lot of timber value on the property, but if an endangered species has been identified there, you may not be able to harvest timber.  

In addition to that, the federal law holds landowners responsible for cleaning up the environment’s contamination, even if that occurred before the landowner owned the property.   

Buyers can even get some protection from liability for cleaning up the environment by taking steps to determine any environmental hazards before making any purchase.   

Setting a Realistic Budget to Buy Rural Property 

There is much more than just the purchase price. A lot of hidden costs involved in buying a rural property. So, understand the types of costs involved, plan the budget accordingly and then make a final decision.

    

Consider some of the following costs such as fencing, ponds, new appliances, landscaping, outbuildings, new appliances, landscaping, general repairs and furnishings. Also, be prepared for the cash needs for the property after your purchase. It will be best if you plan ahead with the improvements needed. If the property you buy is not as improved as you would like it to be, just consider what it is going to cost you in order to make the improvements that you want. Do not ignore real estate taxes and the upkeep of the roads.   

Contact Local Rural Real Estate Experts 

When it comes to buying and financing rural property, go to the local real estate experts. The local realtors understand the market in and out. They are able to compare sales and the history of area properties. The local lenders will be able to understand the nuances of rural lending and structure loan programs especially for the rural property owners.  

 

Contact Raine and Horne real estate agents to help you get what you want. The experienced realtors will review all the considerations for their clients and work in their interests. If you are considering buying a rural property, then do it with professionals by your side. To know how a real estate professional will help you in the process, read this blog Working with Real Estate Agents to Buy/ Sell Land in Victoria

Also, the real estate professionals who deal in rural land in Victoria day in, day out will be able to assist you from scratch. Their level of local knowledge will be invaluable to the buyer. 

At Raine and Horne, we strive to save our customers’ interest, money and time. Apart from that, we offer advice, give your expert input and go above and beyond to help you make a profitable decision.