5 Considerations When Buying a Rural Property
Rural property is one of the most underrated investments you make. When it comes to real estate, many people opt for homes or commercial buildings that have a larger market and more potential buyers.
But, rural property can often sell just as quickly, and without as much of the hassle and upkeep. Buying rural property is a relatively straightforward and simple process, though it’s not without its own unique considerations.
In case you’re looking for a low-risk, high-reward investment, let’s take a look at what you should keep in mind before you sign the dotted line on a rural property.
- How Will You Use the Land?
The first thing to consider before you buy a rural property is how you’re going to use the land. One thing you could do would be to develop it. This, of course, will require permits and incur many expenses on your part. Land is a finite resource so if you want to develop it, there are many hoops you’ll have to jump through.
- How Will You Finance the Purchase?
The best thing about buying rural property is that it’s usually cheaper than suburban or urban property, by a large margin. With around 5-10 thousand dollars, you could buy one in cash, right on the spot. For larger plots, this may be enough for the down-payment as well.
Banks are unlikely to finance land buyers for a rural property because they have a hard time determining the potential worth of rural land, but there are plenty of independent companies who specialize in financing the purchase of rural land for low down payments.
- Are there Special Restrictions Pertaining to the Property?
Oftentimes rural land for sale may be located in a conservation area or have restrictions relating to its groundwater. This can hamper your attempts to develop it or even drill a well on the property, so be sure to research local regulations pertaining to any type of alteration of the land before you buy it.
- Tax Exemptions
If you’re going to use your rural property for farming or agriculture, there’s a good chance you can write off many of your expenses as deductibles. Equipment expenses, as well as interest on loans are often tax-deductible, which should influence the decision of land buyers who plan to profit off it right away.
- How Long Will You Keep It?
Undeveloped land on its own is very cheap to maintain. You’ll only have to pay a basic property tax and maybe get it insured if you’re worried about flooding or wildfires. By holding your land, it will likely only appreciate over time and you can use it for your own recreation in the meantime.
This option is perfect for hunters, fishers, off-roaders, and the like, who can get a ton of use out of their land and still make a profit on it when it comes time to sell. Although it’s never been easier to sell rural properties thanks to technology, you could also pass a piece of land down through the family as well.
Don’t Overlook These Considerations Before Buying a Rural Property
Investing in rural property is an underutilized strategy and one that can provide value in non-typical ways. Before you purchase a plot of rural land, though, make sure to keep the 5 considerations we listed in mind. Doing so will help you maximize your profits, and minimize the chances of running into any roadblocks.