1. Determine your ownership goals
There are several great reasons to purchase farmland. Adding to a current farming operation, an investment, for recreation, or a future rural residence are all possible reasons. Often there is more than one reason. Knowing what you are looking for in your purchase is an important step to making a good purchase.
Are there bad reasons to buy farmland? Maybe. Paying too much for a farm you already farm can be a mistake. Buying a farm for nostalgic reasons can also be costly. There are too many dollars at stake to make an emotional decision.
2. Location, Location, Location
Determine where you want your farm. For a farm or rural residence, location is likely the most important factor. Recreational land may have a wider acceptable area. Investment opportunities may be more easily found by expanding possible ownership locations. Rates of return can vary greatly in different parts of the Midwest.
3. Line up financing
Unless you are investing with all cash, talk to a lender to determine what amount you can afford. Having financing in order will allow you to take advantage of buying opportunities that arise. Lenders may also know of land that may be for sale in your area.
4. Be Patient
Waiting is the hardest part. Just because you’re ready to buy doesn’t mean the right property will be for sale today. However, if the perfect farm does come available don’t lose out trying to get a bargain. Sometimes a property will have more value to you than others. If you are going to risk paying a bit too much, make it the one you want.
5. Consult a professional
Surprise, surprise - We recommend consulting a professional and we just happen to be farmland brokers. This one’s a no brainer, however, as we can provide information and have access to numerous properties for sale. The good part is we only get paid if the sale occurs. The best part is the seller is the one that pays us. It’s a win-win for you as a farm buyer.
In addition to finding a farm to buy, we can help you through the entire process through to closing. Real estate closings can be complex. We can explain the procedures and help you determine who will be responsible for certain expenses of the transaction. Some of these fees include closing fees, document preparation, real estate tax liabilities and recording fees. Let our expertise provide you peace of mind.