Why should I own land?
Standing on land that you own gives you a certain satisfaction that can’t be found any other way. Owning land has practical, tangible benefits as well as intangible benefits:
- A place to call home. The pride of ownership helps build strong communities.
- A sense of belonging and connection. It can be your a place of solace and peace.
- Financial benefits and wealth building. Appreciation, timber management, 1031 tax deferred exchange opportunities, long-term capital gain, agricultural and timber production. See Land Enjoying in our Toolbox for ways to maintain and enhance your land’s value.
- Environmental stewardship. Protecting unique resources and wetland preservation.
- A legacy. A place for your family to make memories throughout generations, or a way to provide public benefits through the Trust for Public Lands, The Nature Conservancy, The Audobon Society, or other conservation organizations.
How do I determine the value of land?
Every parcel of land is unique and has objective and subjective variables.
- Objective variables are those that are facts about the land, such as location, topography, access, zoning, tree coverage, amount of wetland, drainage and soil type(s), utility availability.
- Subjective variables are those that may or may not be important to you or others, such as landscape views, historical significance, surrounding land use, neighborhood characteristics.
Land is subject to market forces as well. Supply and demand, any income-generating capabilities the land might have, and terms of financing can all affect land value.
We can access sales data from the Multiple Listing Service (MLS), utilize county records, and apply our knowledge of properties on the market to help you understand the current market situation and value of land. You can also contact an appraiser or the county assessor for actual sales data from Certificates of Real Estate Value.
Ultimately, a property’s true value is a personal matter of what it is worth to a specific individual. Buyers need to know that unique properties may never become available again so they need to determine how much they are willing to pay to secure opportunities for them and their families.
What I can do with land?
Several factors will affect what you can do with land.
- Zoning classification and regulations may allow only certain uses or have building or subdivision restrictions.
- Waterfront may be subject to shoreland ordinances and Department of Natural Resources regulations.
- Properties that front a river or lake controlled by a dam may be subject to Corps of Engineers regulations.
- Properties within a special-use district (such as a sanitary or water service district) or a flood zone may also have certain restrictions.
- Easements or other encumbrances (such as power lines) may impact the property.
- Covenants or deed restrictions that were recorded on the property may have additional regulations for building or subdividing.
The governing county or city planning and zoning department(s) can tell you what a property’s current zoning is, what is allowed under the current zoning, and answer a myriad of other questions you might have.
You should also review an abstract, title opinion, or some other form of evidence that would identify reservations or restrictions on the land.
A local land surveyor will have expert knowledge of land characteristics and features that impact how land can be used or developed, and they can provide services that will identify the unique characteristics and features of a particular property land and how to maximize its potential.
A qualified real estate professional can analyze a property and provide valuable insight into market trends, sales data, and what prospective buyers are seeking.
Is land a good investment?
Deciding whether investing in land is right for you depends on your personal situation and what is important to you.
- Financial commitment and emotional factors. Are you wanting to make a financial profit from the land or enjoy it and/or leave a legacy for your family?
- Using it and improving it. Can you use the property as is? If you want to add value and/or need to make changes to use the property as you wish, do you have the finances to do so?
- Long-term investment vs liquidity. Land does not convert to cash as readily as other assets do.
- Property characteristics. Location, condition, price and terms, and market conditions all factor in to a property’s current and future value. Be sure to research and consult professionals to determine if a property fits with your investment goals.
- Highest and best use. Changing a property’s current approved use to a higher level can favorably impact value and make it a better investment for you, but this may take time and money.
Check out some of the resources in Land Enjoying in our Toolbox for ways to maintain and enhance the value of a piece of land.
What about access to land?
You cannot enjoy a property if you cannot access it, and you may not be able to sell the property in the future (if that is what you intend to do) without access.
- Public road frontage – Frontage on a public roadway provides access to a property, but does not ensure that it is maintained on a regular basis. Check with the local governing body (city, township, or county) to determine who maintains the road and how often.
- Easement road/drive – Be sure that there is a recorded easement for any road or drive that is needed to access a property. You will want to know whether the easement is private or shared with others and/or how it is maintained, how snow plowing or spring thawing will affect its use, and whether the easement is wide enough for the vehicles that will be using it.
- No public road or easement – Not all properties have access. If a property does not have access, you can try to get private easement(s) from adjoining neighbor(s), a public easement from a governmental agency (such as the county or state), or an “easement by prescription” which is a court-ordered easement providing access to the property when a landowner was not able to secure an easement from neighbor(s). Refer to title documents for details about access and consult your legal advisor about any questions you have.
Where can I find a reputable builder or contractor?
Can I finance a land purchase or improvements?
If your preferred banker/lender is not knowledgeable in or willing to make loans on/for land, you can find a list of lenders who will finance land purchases in the Land Financing section of our Toolbox, and they may also finance land improvements as well.
You will want to visit with your preferred banker/lender to discuss the purchase or improvements you want to make, collateral or downpayment you have available, interest rates and terms, and your creditworthiness.
Do I need a survey?
For your convenience, listings on LandRadar.com may include GPS coordinates to approximate corners and points of properties based on county GIS mapping. Many buyers find this sufficient for their use of a property. However, a survey done by a licensed land surveyor is the only way to know exact corner and boundary locations, which can be peace of mind to a buyer and could result in a better price and faster sale for a seller.
The need to have land surveyed, and the level of survey information needed, depends on several factors, including:
- Location of the property – Is it near a city or developed area, or is it remote with difficult access and surrounded by land that may have never been surveyed?
- Intended use of the property – Different levels of survey information may be needed if you planning to build structure(s), develop or improve the property, or just use it for hunting and recreation.
- Plans to improve the property – Will you be planting trees or harvesting/thinning the timber? Do you plan to build a home or other structure(s)? Does a road or drive need to be put in?
Land surveying services can range from simply locating and marking property corners and boundaries on a property to providing a certified survey drawing depicting topography, improvements, wetlands and other special features, and ALTA/ACSM land title specifications. Costs are related to location of the property, availability of other survey data in the area, and the scope of services and information needed. Consult a licensed land surveyor, the county surveyor, and the local governing body to determine what information you may need for your intended purpose and associated costs.
What utilities are available?
The availability of utilities may or may not be important to your use today, but it may be important to the next owner if you plan to resell the property in the future. For example, if your property is located in a city or sanitary district, you (or a future owner) may be required to connect to sanitary sewer and/or water for any structures being built.
For your convenience, you will see that listings on LandRadar.com may include the name and toll-free phone number for the electric provider that services the area in which each property is located. To find out what utilities may be available or costs associated with getting service to a property, you will need to contact utility providers directly.
Can a property be developed?
You may be able to develop or subdivide a property, but there are several factors you will want to consider.
- Suitability – Characteristics of the property, such as location, amount of high ground, and topography, as well as proximity of amenities.
- Access – Be sure that the current access would adequately meet the needs and requirements of your development.
- Utilities and improvements – Know what road standards will need to be met, what utilities are available, and any cost(s) associated with providing access and utilities to any newly-created tracts or lots.
- Zoning – Ensure that current zoning will allow the development you are planning, or seek to have the property re-zoned to a one that will.
- Highest and best use – To optimize your value you will want to use the property in its optimal way, which may be as a larger tract or smaller subdivided tracts.
- Market conditions and timing – Before you invest time and money into developing a property, consult a real estate professional for any insight they might have on pricing and marketability of the developed land.
- Financing available – You will want to be sure that you have or can secure the finances needed for the development and that prospective buyers will be able to secure any finances necessary to purchase.
- Tax consequences – Consult an accountant or tax adviser on how proceeds from selling tracts will affect your personal tax situation.
What is QDM?
Quality Deer Management (QDM) is a management philosophy/practice that unites landowners, hunters, and managers in a common goal of producing biologically and socially balanced deer herds within existing environmental, social, and legal constraints. This approach typically involves the protection of young bucks (yearlings and some 2.5 year-olds) combined with an adequate harvest of female deer to maintain a healthy population in balance with existing habitat conditions and landowner desires. This level of deer management involves the production of quality deer (bucks, does, and fawns), quality habitat, quality hunting experiences, and, most importantly, quality hunters.
By creating quality habitat for deer and other wildlife, you can increase your property value and benefit the environment!
The Land Enjoying section of our Toolbox lists the QDMA and several other organizations that can help you preserve and improve your land and its value.
How can I manage the timber on my property?
Implementing good forestry practices can ensure forest sustainability, benefit wildlife, and provide financial benefits.
The My Minnesota Woods website, which is a service of the University of Minnesota Forest Resources Extension, is a great source for woodland stewardship advice. They have an Ask an Expert link where you can ask a question get expert answers as well as information on the Woodland Stewardship program.
You can find several other organizations that can help you manage your timberland in the Land Enjoying section of our Toolbox.
Should I try to re-zone my property?
The decision to re-zone or gain any other entitlement for your property depends on what you want or plan to do with the property and/or if a different zoning than its current zoning is needed to actualize the property’s highest and best use.
For instance, if your land is currently zoned “Agricultural” (for which the minimum tract size may be 35 acres) and you believe it could be subdivided and sold as 2.5 acre tracts, you may want to pursue having your property re-zoned to a zoning classification that allows tracts of that size. Although a different zoning “entitles” the land to what you may see as a higher and better use, understand that your neighbors and others may not agree and may object to the re-zoning attempt.
You will want to talk with your county planning and zoning department, a land surveyor or other land expert, and a real estate professional to explore the feasibility of re-zoning, understand the process and expenses involved, and assure you that a re-zoning entitlement would indeed allow for a higher and better use of your property and give it more value.
What are the tax benefits of owning land?
Depending on how much land you own and how you use it, owning land could give you an investment interest deduction, government payments (such as you would get if your land was enrolled in the Conservation Reserve Program (CRP) administered by the Farm Service Agency (FSA)), or tax credits for forestry and agriculture.
Visit the Land Enjoying section in our Toolbox for links to the FSA and other organizations and programs that could help you realize tax benefits and consult with an accountant or tax adviser who could provide insight from an accounting perspective.
What is the market like today?
The real estate market is influenced by a variety of elements, including economic conditions, supply and demand, and expectations of buyers and sellers.
The market may be good but oversupplied in some categories. There might be a lot of property on the market but little that meets the desires and requirements of consumers. Sellers may be wanting or needing a price or conditions that buyers are unwilling or unable to meet.
A qualified real estate professional can let you know current market trends and conditions, what buyers want and can get, and what sellers can do to make a property more attractive and have it optimally marketed.
Should I have my timber logged?
It is always good to clean up dead and dying trees and deadfall to allow live timber to flourish and be featured. Selective cutting can also sometimes be beneficial and enhance a property’s value as well as provide some income for you. However, once timber is cut, it is gone, so it is generally best to err on the side of not cutting (or cutting less).
Minnesota Forest Industries provides a wealth of information on best management practices, sources of forestry assistance, how to choose a quality logger, and more. The Land Enjoying section of our Toolbox lists other organizations and programs that may assist you in determining whether to have timber logged or thinned, or other options and incentives available to owners (or buyers) of timberland.
How can I add value to my land?
Although the value of your land depends on a variety of subjective and objective variables and market forces, there are a variety of value enhancements that you could explore.
- Entitlements – Rezoning, variances, special use permits, and other such approvals may give you or a future landowner the right to achieve a property’s highest and best use or develop a property in provisional ways.
- Development plans – Exploring the subdivision potential for your property, and perhaps even having concept plans created and/or obtaining necessary approval(s), will give reveal options for utilizing your property and/or could make your property more attractive to prospective buyers who are looking for developable property.
- Physical changes and management – Practicing sustainable forestry and stewardship, enriching wildlife habitat, improving accesses and trails, preserving natural features, creating appealing views, having your land surveyed to identify corners and boundaries and unique features of your land, and other ways of caring for and improving land will all contribute to its current and future value. We have links to some great resources in the Land Enjoying section of our Toolbox.