United County Real Estate 1st Edition 2024

THE BENEFITS OF INVE $ TING IN LAND

A central facet of the American dream is the ownership of property. While many consider this to simply be a house or building, the vision behind manifest destiny was about more than four walls and a roof. It was about land. Land ownership has been and continues to be a benchmark for many as a way to insulate against fi nancial struggles, diversify your income streams, and maintain self-suf fi ciency if needed.

So what benefits are there from having a back 40 or a small farm? Agricultural land already used for food production can continue to provide jobs and revenue with the right plan and leadership. In addition to growing food, these lands often serve as a permanent or temporary home for sought-after game animals, leading to an additional revenue stream. Today’s landowners have sportsmen and out fi tters draw up a contract involving insurance to hunt or lease privately owned land. By legitimizing the transaction, out fi tters, and landowners can negotiate prices for exclusive access to the property and create a secondary seasonal business. This hunting agreement also bene fi ts the landowner by reducing crop and animal losses for varmint species like prairie dogs, coyotes, and feral hogs. On the surface, land ownership can seem cost-prohibitive as many jurisdictions tax land based on “highest and best use.” Unfortunately, agricultural or undeveloped land is not viewed as the “best” use, which is often for commercial or residential use. However, this doesn’t mean that property holders in these areas are paying the total value in taxes. A Differential Assessment is conducted for agricultural land and generally allows the land to be taxed at a rate equal to its “production value” instead of its total value. A bene fi t to this program is that it does not affect the property’s value for sales or appraisal. For property that is already in use, landowners can sell a portion of their land into a Conservation Easement. A Conservation Easement is a fairly complex process that includes multiple legal steps. The reduced tax burden is a topic that should be a focus for all investors regardless of the portfolio type.

Self-Sufficiency Increased self-suf fi ciency has always been a focus for land owners; with the uncertainty surrounding food and even jobs during the beginning of this decade, the concept of self-suf fi ciency has been brought to the forefront of our collective minds again. By owning land, especially land with adequate access to water, a land owner begins to insulate themselves from the strains their fellow urbanites have. From sewer main breaks to power failures, the grid that many Americans live on is imperfect. Having adequate resources at hand, such as solar panels, private wells, and even the farm itself, drastically cuts down on the challenges caused by a breakdown in utilities. Even outside of the failure of infrastructure, the investment in land affords assets that can be liquidated or borrowed against if the need arises. Are there benefits to investing in land? Absolutely, with a diversi fi ed revenue stream, reduced tax burden, and improved self-suf fi ciency, are just a few other examples of why land ownership and investment is a sound decision. With the ability to own tangible assets that can be used for fi nancial gain and enjoyed as green space, hunting land, or a family gathering spot for generations, it

becomes clear why American settlers drove west for their own land.