If you’re buying farmland, there are certain basics you need to consider.
Will the property be self-supporting from an agricultural standpoint, or will you have to supplement it with your non-farming income? The answer to that question will affect the terms of any financing you want to obtain for the purchase. The greater the productive potential of the land, the less you will need to come up with as a down payment. And you have to be realistic about how much of your own money you can afford to invest on an ongoing basis.
If you do require purchase financing, make sure you choose a lender that has a clear understanding of both the ups and downs of the farming business and rural property in general. It probably won’t be any of the same ones that financed your home, car or boat or even your business. They’re not likely to have the specialized knowledge it takes to evaluate farmland. And, they will be of little use later when you need to borrow money for other farm-related purchases.
Questions unique to farmland for sale have to do with the viability of the soil. What type is it? Are there enough nutrients in it to make it tillable? And how much tillable soil is there relative to the overall total on the property? A soil test will provide you with the answers you need, whether there’s been one recently or you have to order your own.
For soil that’s not tillable, how much work and expense would be involved in bringing it back to the level of nutrients required for successful farming?
Check for proper drainage, which will greatly impact your potential farming income. There should be no erosion damage or surface water.
It’s important that you not go into the purchase of farmland for sale blindly. Unless you’re an expert, take advantage of the advice and knowledge a lender has to offer. If the seller is using a Realtor, you’ll find that person to be very motivated to complete the transaction and willing to supply a lot of the information you’ll need to make a sound decision.
In any event, everyone involved must be clear regarding what’s included in the purchase price. All details should be spelled out, as with any other major contract.
If you’re new to farm living, here are some vital connections you need to make once you’re settled in:
1. Your county’s USDA Farm Service Agency
2. Your farming needs supplier
3. A good mechanic, for when things break down (and they will)
4. Your nearest neighbors, for help when you need it
When deciding on farmland for sale, remember to factor in not only the ongoing expenses such as insurance and utilities but smaller investments you will need to make. These can include such routine but vital items as tools, a mower, utility vehicles and maybe even an additional small building or two for storage.
The total number of farms in the United States is around 2.2 million. Farming is hard work, but there’s no shortage of people who feel the need to escape the city get back to basics and work the land. And despite what you may have heard about “factory farms”, over 96% of farms in the United States that produce crops are owned by families.