How To Make Money With Vacant Land Part 1 â€“ Rural Leases
This coveted land post is part one of How to Make Money with Your vacant land. All right, so you're looking to buy some vacant land or perhaps you own some land and you're not doing anything with it. The question is how do you make money with that land. Well, you can make money with vacant land in a number of ways and a way to cover some of those in this article. From a high-level overview here a few of the ways you can do it. You can do it by leasing the property; you can do it by easements for the property. You can do it with mineral rights and you can do it by working on the land yourself. In this article, I'm going to talk mostly about leasing. Leasing is a great way to get income with your vacant land. Normally people look at vacant land and they think it's a terrible investment. And the reason they think that is because they hear stories about land speculators that pay too much for land and then end up in trouble or they hear people that buy land have to pay taxes on that land forever. Well, you can make your land a cash flow positive asset and you can do that by leasing it. There are many types of land you can lease. Some types of land can be leased to multiple people in different seasons of the year. So most common types of leases are livestock leases.
Livestock Lease So a lot of times people will own cattle sheep goats or other livestock that need to graze and they fence in their property but they still have to buy a lot of feed for these animals and they would much rather have these animals graze freely over a larger territory. Sometimes they're willing to even take some of the animals out of the herd or the group and put them on another plot of land. And this is where livestock grazing leases come into play. You can lease your land to a rancher and allow them to graze their animals on your property. Their property doesn't have to be immediately adjacent to yours. Like I said sometimes they're willing to take a few animals to your property and put
them there. You want to know how much vegetation your property produces for those animals to eat. There are some metrics for this called indwelling units or grazing animal units that will basically tell you how many animals can be supported per acre in the area. But generally most ranchers already know about what it takes and they can look at it and if you get a few ranchers to bid for your property chances are you'll end up with a relatively competitive bid and when you lease the property for livestock for grazing you'll typically get enough to cover the cost of taxes. Maybe a little bit extra so you get a little bit of cash flow and then you can just sit on your property and let your property appreciate in value as nearby towns grow closer to the property or if you just hold it over time you know it'll be a good hedge against inflation. So yeah that's one option. Sometimes you can get livestock leases that are seasonal and they can often be kind of counter-seasonal to hunting leases.
Hunting Lease Hunting is another great lease you can do so there are some parts of the country where there is not a lot of public lands. I'm sorry for those who live in the western United States. But out west, there is a lot of public land. And you can often get hunting licenses to go out on public land but if you're anywhere in the Midwest, the South the east the northeast the mid-Atlantic. There's not a lot of hunting land available and you can often charge leases for hunting the land. In fact, there are a number of Web sites where you can post your land as available for hunting you can go to Craigslist.org you can just Google hunting land lease and you'll come up with a bunch of for-profit sites that allow you to post your property. But the small fee typically and they'll pair you off with people that are interested in hunting and you can lease your property sometimes you can leave your property for short periods typically the leases are yearlong leases. And again with the hunting lease, you'll typically cover the costs of taxes with your hunting lease maybe a little bit more. It varies quite a bit by region. But as a rule of thumb, it will prevent your asset from being an asset that is cash flow negative to an asset that's neutral the cash flow positive agriculture is a third option for leasing. There are a lot of areas in the country where farming is standard and the land is good for you to know killing and growing crops and you'll typically have to pay more per acre in these areas.These days, the cap rate which is basically the interest rate you earn on your land for farming is pretty low and it changes over time and it changes by region. So be sure to look around. But you know I can be as low as 2 percent meaning you're only earning a 2 percent return on your land or people are willing to pay enough for land that it only earns 2 percent based on the agricultural leases available. Some areas offer more and obviously, some properties that are really great for certain types of crops may offer substantially more than that. But generally speaking, you'll get a little bit of a cash positive cash flow on your land. And again you can hold that land is a great inflation hedge. Wow. Earning a little bit of cash flow and you know agriculture tends to be great as does grazing lease because it prevents a lot of overgrowth on the property it kind of keeps the property under control. So if there is a future use for it to be residential or something like that it will be less work to clear out the property with livestock or grazing leases. The trees are typically left intact so that way there's still some nice foliage in some nice trees on the property. But there is a fair amount of grazing land that's kept without trees.
Those are the main leasing options that have historically been out there. There are also some new leasing options that are becoming more common and those I will cover in a separate article. There are also many other ways to make money with your land. As I mentioned easements minerals and improvements and just operating income you can earn with your land. So with that hopefully you've enjoyed this post and look forward to future posts on this topic.
How To Make Money with Vacant Land Series How To Make Money With Vacant Land Part 1 – Rural Leases How To Make Money With Vacant Land Part 2 – Infill Land Leases How to make money with vacant land Part 3 – Residential Rentals How to make money with vacant land Part 4 – Green Energy Part 5 – How To Make Money With Vacant Land – Easements
Part 6 How to Make Money with Vacant land â€“ Minerals Part 7 How to Make Money with Vacant Land â€“ Plants
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