What to Consider When Buying Recreational Land

Written by: Pam Zinda, VP Home Loan Officer

Owning recreational land is a goal for many people, whether it is camping, hunting, fishing, or looking for a long-term investment. Finding good recreational or hunting land opportunities can be a competitive and challenging task. Having the right information and being prepared are critical for when the situation presents itself. AgCountry is here to help at every stage of the experience. Consider the following if you see a recreational or hunting land purchase in your future.

Develop a Plan

Having a plan is important anytime you enter a competitive environment—especially with real estate. Identify desired property locations and characteristics, funds available for a down payment, monthly payment capacity, and maximum amounts you are willing to spend. Also, consider short- and long-term plans for the property. Ask yourself:

1. Do I plan on keeping this property for generations to come?

2. Is this an investment I would be willing to part with for the right price?

3. Would I see myself building a shed or home on the property and turning it into my primary home?

We all know plans can change, but considering these items can help you develop your initial recreational and hunting land purchase strategy.

Identify Restrictions & Opportunities

Hunting land parcels are often placed in environmental or public access programs, which can be beneficial or restrictive depending on how these programs are utilized. Some of these programs can be terminated with the transfer of ownership, others may carry 100-year easements or even perpetuity agreements. Additionally, these conservation programs can seriously limit what you can do on the property and can lessen the resale value. Planting crops or food plots, building homes, and even building placement can be affected. Easements for access to neighboring parcels, mineral rights, utilities, and road right-ofway tend to come into play with these types of land parcel purchases as well.

These programs can also be good cost-saving measures if used appropriately. Conservation programs range from annual to one-time lump sum payments, which can make owning land more cost-effective and provide flexibility if needed.

Financing Options

Most financing options require a cash down payment typically starting around 20% to 35% of the property’s appraised value or additional available collateral like houses or another parcel of land. The property’s appraised value may differ from your purchase price depending on what other market data suggests the property would sell for in the open market. Knowing what you have available for a down payment can help you establish the limits of your purchase price when a property comes up for sale.

Traditionally, loans for these types of properties tend to be written on adjustable-rate structures, balloon payments, or fixed-rate financing. This type of financing will affect your budgetary allocations if payments and rates change before your land is paid off. At AgCountry, we have fully fixed, fully amortized lending, which give you consistent payments and mitigate risk in a volatile rate market.

Getting Started

Buying real estate is an experience that typically only takes place no more than a couple of times throughout a lifetime. It is important to work with someone who has your best interests in mind and is well-versed in market conditions, regulations, and the constant changes of real estate. Our team will walk you through the process and customize a plan that fits your goals and budget.

Today’s land purchasing environment can be an intimidating adventure that sometimes feels financially unattainable. AgCountry specializes in these situations and our experienced staff helps people daily with customized plans to ease worries and fulfill dreams. Get the solutions you need to turn your dreams into reality whether it’s using a property as is, developing a hobby farm, building a shed, or constructing your dream home.

Visit AgCountry.com/HomeLoans to learn more.