You see the stories on TV. Real estate investors buy a ramshackle house for $200,000, gut it, refurbish it and then sell it for $400,000 six months later. That’s not how the hunting land market works, but buying raw land is a great way to maximize investment dollars.
Have a Clear Strategy
Land will often appreciate in value if you simply do nothing, but owning land for the purpose earning larger than normal returns often means making improvements. That could be turning a deer property with heavy timber, agricultural fields, etc. into a duck hunting paradise, by say, selectively cutting timber to open holes and natural breaks, adding ponds, and installing a levee system (depending on the area, land suited for deer hunting can be cheaper than land suited for duck hunting). Or maybe it’s turning raw land into a big buck paradise, which will practically sell itself thanks to its track record. Regardless, you need a plan for how you are going to add value. This greatly helps in the search phase of buying the right property for what you want to do with it.
Be Ready to Act
Have all your ducks in a row as you wait for a property that fits your needs to hit the market. Great deals, (like this one) won’t stay on the market long. Have your down payment saved and get pre-approved for financing if that is the route you are taking to purchase the land.
With that said, don’t rush into anything foolishly. Make sure the property does in fact meet your criteria for the plans you have. Also, be sure you are ready for the work. In the examples we used above, most of the return on investment is going to come from sweat equity. You have to love working the land.
Be Patient
Once you have the land, it’s going to take time for your work to pay off. Just because you planted some food plots or flooded some fields does not mean you will be growing above-average bucks or limiting out on ducks immediately. Land improvement is a long-term play for patient investors. The good news is, you have the land to enjoy as it appreciates in value.
Keep Emotions Out of It
With the blood, sweat and tears you poured into the land, you will have an emotional attachment to it. At some point, you may say, “hell with it” and decide to keep the land. That’s fine. Or, you may be ready to move on to another property and start over again. Either way, be honest with yourself. It’s easier said than done, but buyers do not care that your son shot his first buck on the property or that your tractor’s transmission went out twice while planting food plots. Once you decide you are committed to getting it sold, you have to put that aside and look at the land as an asset in a business transaction. Otherwise, you end up pricing it too high, which leads to lowball offers and “death on the market.”
Look For the Next Opportunity
If you made a chunk of change on the sale, you will have to pay capital gains taxes to the federal government unless you declare the sale as a 1031 exchange – meaning that any profits will be reinvested into another property. This delays the government from taking it’s cut. The 1031 exchanges are complicated, but our Land Specialists have the tools to help. In fact, a land specialist will be with you every step of the way if you hire us because we are just like you. We love to hunt. We love the land. We strive to make smart investments that benefit our families and cement financial stability.
