City living

Fatjay · Feb 15, 2017

I live in the same neighborhood I grew up in. It was rural, filled with farm land and pastures. I loved it so much I bought a house a block away. The schools were great, things were local, but not congested.

In the past 15 years though, this has changed dramatically. Developments replaced nearly all the farms. Traffic has gotten so bad what used to take 5 minutes now takes 30. A 2 story single family home has gone from 120-200k to 500k+, and you get a quarter acre with that.

The schools are still good, among the best in the state, so I'm happy with that until my girls are off to college. Once that happens, though, I'm not sure I want to stay here. And I never thought I'd say that.

So that got me thinking of buying a plot an hour away, 10 acres for $35k, which I could sit on until retirement comes, then sell the house, and use the money to build something on that empty land. Being an hour away, I was thinking I could farm it to hopefully pay itself off over the next 5 years or so. The more I look into it, the less and less possible that sounds, being able to only go up on the weekends.

So that got me thinking, is it worth renting out to neighboring farmers? What sort of headaches might accompany that? The land is surrounded by farms, so I'd imagine it wouldn't be impossible to find a renter. What sort of rent would one charge for something like that?

I'm in eastern PA, if that helps at all. I appreciate the advice on this.

rrlund · Feb 15, 2017

You can probably rent it for enough to pay the taxes. I had a phone call a few years ago from a guy who's son wanted to buy some ground here in the neighborhood. He asked me out of curiosity what I paid for rent. When I told him,he asked if that was a month? He said they needed a lot more than that to make the payments. I asked him why I would give him enough to make the payments instead of buying it myself if I wanted to pay for it?

I don't think your situation is unique though. Some neighbors used to go to Yuma Arizona for the winter. They had a trailer in a park. They said when they started going,it was all rural where they were and they could ride their bikes anywhere they wanted to go. Wal Mart built a store across the road,the fast food joints came in and it got noisy and about impossible to go anywhere. They sold the place and quit going.

Fatjay · Feb 15, 2017

Fortunately I don't think land is going to get any cheaper. My house should be worth double what i paid for it by the time I'm ready to sell, if not more. You could fit an entire development of these new houses on my current plot, and they'd make millions off it. Sadly, that's happened to 2 plots in my neighborhood already. The owner died, house went for auction, sold high, bulldozed, split into 4 lots, house were sold before htey were built. whole house came in on 4 flatbed trailers, and put up in a day. Finishing touches in two weeks. 560k each, advertised as "quiet, rustic neighborhood". Not for long, at this rate.

jCarroll · Feb 15, 2017

Is your wife (or whatever) a farm oriented person?

I grew up on a small farm - went to the city for fame and fortune.

At 72 we bought 40 acres outside a farming community - I won't say WHY - would not be politically correct.

My wife does not understand why "the work" is never done.

I'm happy as a clam ...........

Fatjay · Feb 15, 2017

My wife and I have a good relationship agreement. She does takes care of everything inside, I take care of everything outside. She's happy she doesn't have to go out in the heat/cold/rain/snow, and if I never have to fold a shirt or match a pair of socks again, it'll be to soon. She knows where to find me if she needs me, and I can come in any time to a home cooked meal. She doesn't care where we live as long as it has a big kitchen.

tomturkey · Feb 15, 2017

Fatjay; Figure out your timeline, Girls graduation high school/college and go from there. Why sell out to someone who will immediately split it. Do it yourself or partner with a home builder/developer for a percentage of the bare lot or developed lot. It will net you more for you retirement hide away. Cash rent for your 10 acres may pay your taxes, won't make a mortgage payment. If you wait to buy that acreage til graduations, price will definitely go up. You may then have to go an hour and a half or two away. Get it bought and figure the rest out later. gobble btw the country is a great place to have Grandchildren come visit and stay a while.

Ole Ringneck · Feb 15, 2017

You could always rent it to Larry The Corner Guy to raise turnips on .Ya know , you can never have to many turnips.

Fatjay · Feb 15, 2017

Sounds like renting is the way to go, will cover taxes. Can do 20k down and take a 15k personal loan and it'll be the same as a car payment. Any idea how I would get in contact with potential renters? I'm guessing door to door isn't the best solution. I'm guessing rent is by the year. Any ideas what 10 acres would go for ballpark?

JOCCO · Feb 15, 2017

Jay not sure I can answer the rent question. But what I have seen is what your describing and its like a domino effect!!! Places that was a country type town got bigger (fast foods, walmart etc) Then every one moved 1/2 hour or so away to "get away from it" Yep you guessed it cylcle started over again motels, walmart, fast food etc. On the rent for farm land I have noticed a lack of interest in very small parcels. good luck

Fatjay · Feb 15, 2017

I know effect quite well. The location I'm looking at should take at least a couple generations for that to happen though, and with the land, my neighbors will be far enough away. 10 acres here would cost me 2m+, I'd never be able to retire so I'd never be able to avoid the traffic.

K Effective · Feb 15, 2017

Here in SW MI, small parcels may rent for $80-100 per acre per year. I farm from five neighbors, very small plots of 3,3,4,4 and 6 acres- too small even for the neighbors who farm part-time to mess with. Four of the spots are side by side, so the fields are actually 6 and ten acres total. I don't pay any rent at all, they are just satisfied keeping the fields clear. I bale grass hay from the fields, but am very wary of doing any more than the minimum, from experience. IF they want more, like tillage or fertilizer, or something else, I would want some kind of guarantee lease to get my money back from their land.

The neighbor next over has about 17 acres open ground, was farmed by the BTO, but I heard this Winter they gave it up- could no longer get their equipment into the field without major tree surgery the owner was not interested in. A clear, 10 acre field would be farmed for sure around here. I'm not sure what the taxes would be on non-homestead, 100% ag land without a house, isn't NY some of the highest taxes in the US?

dpendzic · Feb 15, 2017

I live in the town i was born in on Long Island--all of my Grandpas and uncles potato farms got bought up and are now developments--so 20 years ago I bought 100 acres upstate about 4 hours away in a rural area.Bit a house there bit by bit over 10 years and now have a really nice place to get away to, planted food,plots,cut atv and snowmobile trails, logging a lot of the tees and just enjoying it.

glennster · Feb 15, 2017

head over to the county extension office in the county the land is at. lots of info there, they can tell you the average rent for the area, and what crop yields are. they can probably direct you to several good farmers in the area. the do a drive by of their farming operations. if it looks like the haney place on green acres, keep going. if its well kept, stop in for a chat. you can get a feel for the personality. also, head over to the local coffee shops for the early morning secret farmer meetings and listen to the conversation.

mtny · Feb 15, 2017

I rent about 50 acres out for 50 bucks an acre . Could maybe get a little more but we
work back and forth on some other things . He has a large operation so f I need a
dumptruck or backhoe or whatever I just go get it. I work the rest . Rents run regional
so that area might be higher. Some areas cash rents are much higher but 10 acres isn't a
lot of ground to bother with unless you got another piece close by.

Dave H (MI) · Feb 15, 2017

10 acres around here I would only do for hay. I have a couple of those too. Not worth hauling a big tractor and equipment to till and plant and then again in fall with the combine. No money there. I do take those on for hay. I do not generally pay rent, though. People ask if I will mow it and haul off the residue. Spray the weeds, leave the grass...bale it and sell it to folks who have old horses or wether goats. Not great money, but it is better than grain!

Understand, if you are buying this land in farm country you are just perpetuating a cycle that you have stated you dislike. The subdivisions will be the next to arrive. Maybe before you can retire and move out there. I would not be surprised.

Bob Bancroft · Feb 15, 2017

Believe it or not, ag tax exemption in NY is quite generous. From some of the horror stories I read on here about taxes and regulations in the Midwest, NY is really no worse.

larry@stinescorner · Feb 15, 2017

what county in eastern PA? We are in Lehigh county

Traditional Farmer · Feb 15, 2017

I would advise against buying land to use years out for you to retire to as things can and will change over time,I've seen it happen a lot really.As far as renting the 10 acres
depends on where you're located in my surbanized area that used to be all farms I turn down pieces of land to cut hay off of all the time for free and since I'm making about 2X what
I need I'm going to cut a couple more places loose this year.Trying to move equipment on the roads around here is a real challenge anymore.

larry@stinescorner · Feb 15, 2017

na ,,we got enough,,,lol

paul · Feb 15, 2017

'Here' an 80 or even a 40 of ag land you could rent for near $300 an acre.

A small parcel like 10 acres, would be a lot less. Someone nearby would have to be interested, not worth driving very far for 10 acres. Since a
lot of that will be end rows, and short rows, it will be worth less.

Any trees (you probably want some trees by a house site?) would drastically lower the rent value. Trees don't fit well with farming, they shade
and cool and take water away. They kill off 6-12 rows all the way around them. On a small plot like 10 acres, any trees would just be a mess.

A rectangle is easy to farm, any odd angles makes it tougher. Because it's only 10 acres, if you add any angles it makes the land even less
useable.

So, what might be $300 an acre land here, could quickly turn into $75 an acre land if there are some issues with such a small plot.

I don't know what land rent is there, but you will run into the same discounts.

Paul

ss55 · Feb 15, 2017

If you have the cash in-hand to buy the ten acres without borrowing, it could work for you. If you need borrow money to buy it, I would hold-off buying until you are ready to retire.

Ten acres will require more time and money to keep it maintained than you will expect. It may not generate enough income to cover the maintenance, much less pay for itself in five years. It may be about the same as buying a second home for your retirement and then maintaining two homes until you reach retirement.

Traditional Farmer · Feb 16, 2017

Plus if he saved the what the taxes and interest on the loan would be for say 10 years he'd have a good down payment when he was ready to retire.

Texasmark1 · Feb 16, 2017

Couple of points here:

If currently ag. tax exempt status, keep it there. That means you read the law and abide. There are numerous reasons one can claim the
exemption here in my county. One is "Improved Pasture". On that, keep obvious signs that you are doing something to keep the pasture
improved so that when the annual appraiser passes by he checks off on your exemption. Otherwise taxes could make a dent in the economy of
your plan.

On the lease it out, most leasers here are interested in making money for themselves.....read between the lines!

WI Dan · Feb 17, 2017

I don't have an opinion for you, but it was very interesting to read the responses. I'm glad you asked the question. It drew out some good insight here.

YT is great for this stuff. I'm a young guy, always lurking and learning from you guys.

fixerupper · Feb 17, 2017

If you buy the land the ideal situation would be to take the fences out and rent it to the adjoining neighbor. He would incorporate your land into his and farm straight through the whole works. Make sure survey marks are left very visible for when you want to separate your ten acres some day.

The drawback to this Is it could get messy if the neighboring land changes renters or owners and the survey marks you left standing are questioned. Having it re surveyed can cost thousands.

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