If you’re flipping through the pages of Texas LAND magazine, chances are you’re dreaming of a place to call your own.
Maybe you want a spot to hunt and fish. You might be ready for a second home now and a retirement home later. Or you’ve seen land hold its value, making it a stable long-term investment.
Whatever your reasons, it’s wise to work with professionals who can help you find, purchase and manage your place in the country. That’s especially true if you’re new to the rural way of life.
A Real Estate Agent
Brokers and agents specializing in rural property are experts in their local markets.
“A good Realtor is worth every penny,” says Travis McKinney, chief credit officer for Central Texas Farm Credit in Early. “They do a lot of research, and will have information for you on the property’s history, title, easements, mineral rights, flood zones and more before you ever set foot there.”
One way to find a local agent is through professional organizations such as the Realtors Land Institute or the Texas Alliance of Land Brokers.
A Rural Lender
Look for local lenders that understand the nuances of structuring loans for rural property. For example, Farm Credit lenders have expertise in rural lending and agriculture, and can guide borrowers through the process of purchasing and owning land.
“Education is key,” says Trae’ Ottmers, senior vice president of lending at Capital Farm Credit’s Fredericksburg office. “My family has ranched for generations, but many landowners today don’t have a rural background. We can finance their property and talk about how best to manage it.”
Farm Credit—a nationwide network of borrower-owned lending cooperatives—has other advantages, too. The co-ops distribute a portion of their earnings to customers each year in the form of patronage dividends, effectively lowering borrowing costs. They also offer a variety of competitive financing options for land, country homes and ag operations.
A Rural Appraiser
The appraisal will tell you whether property is worth the asking price—and a whole lot more.
“Often, buyers who aren’t local want to make an educated offer but are not familiar with the market,” says Dave Cullins, senior vice president of administration at AgTexas Farm Credit Services in Lubbock. “Or they may learn important information from the appraiser, like availability of water or some restriction they weren’t aware of. This could lead to a price renegotiation in which the buyer could save some money.”
Farm Credit lenders with in-house appraisers tend to have fast turnaround times, too.
“Sometimes speed is more important than cost,” Cullins says. “In some markets, you want to close as fast as possible.”
Look for a state-certified, accredited rural appraiser who specializes in your type of rural property. Those with professional designations from the American Society of Farm Managers and Rural Appraisers (ASFMRA) or the Appraisal Institute have added expertise.
An Ag Expert
Once you own land, seek advice on what to do with it. Your lender, broker and county Extension agent are all good resources.
Texas A&M AgriLife Extension agents offer information and special programs on raising cattle and managing for wildlife, for example. Such activities can help you earn income off the land while getting property tax relief in the form of an open space valuation—also called an ag exemption.
“A lot of times people who are buying land for recreational purposes want to lease it to a local person to run livestock,” McKinney says. “A lender, Realtor or Extension agent can put you in contact with local people who will be good operators and take care of things.”
A Financial Expert
Before you buy, it’s smart to work with a financial advisor and figure out your budget. After closing, you’ll also need an accountant who understands the tax advantages of farming, ranching and owning rural land.
Agricultural enterprises enable you to deduct or depreciate the cost of many assets, such as barns and equipment. You can even write off the interest on your loan.
“A good question to ask accountants is do they file many Schedule Fs for their clients,” Ottmers says. “Schedule F is for farm and ranch income. If they say they don’t know much about it, then your lender or ranch broker likely knows someone who does.”