00:00 Speaker 1: Hey, I'm Nathan Winstead
with Lone Star Ag Credit in the Georgetown credit office. We're part of the nationwide Farm Credit System. We provide lending solutions to farmers, ranchers,
rural homeowners, agribusinesses and the like. I'm gonna talk to you today about the top
10 factors in buying rural land. 00:16 S1: The first thing to consider when
buying land is property use. It is important for somebody to have an objective
and know exactly what they're gonna do with their property so they can identify the right
type of property to buy. You may be looking to buy land in the country
and build a country home on it to enjoy your retirement or a weekend retreat. A lot of folks want to buy property for farming
and ranching. It is important to know whether the soils
are great for farming and conducive for a great crop. To ranching where you're gonna run cattle,
have access to water, fencing. If you're looking for a hunting track, you
want to have excellent topography, tree cover, water resources for the livestock. 00:58 S1: If you're buying five acres in the
country, it may be conducive for a rural home site, but if you're going to be farming or
ranching you may need 100 to 1,000 acres. It is important to consider the topography
of the land, in that if your intended use of the property is for a country home, you
may wanna be on the hill looking out overseeing the sunset, as opposed to if you are farming
you want a pretty flat piece of property that drains very, very well and does not have flood
plain to it. 01:30 S1: Identifying easements on a property
are important because they can affect the value of the property. It is important to understand the difference
between fee simple title, and having an easement which provides legal access to the property. You can access your property from a county
road and that is called fee simple title. If you have to go down a private road that
is maintained by the private neighbors or owners, then you would have a deeded easement
to the property connecting the property to the public road. 02:00 S1: The amenities on a property are
important and add value to the property, fencing, a stock tank, existing barns that can be conducive
for storing equipment or livestock are key variables, key things to consider in buying
property. Property values can vary from one extent of
the spectrum, being commercial development type of sales price, to your every day residential
or agricultural use of the property. 02:24 S1: When a buyer calls in, the first
thing that I am asking is, "What are you gonna use the property for? And if you've identified that piece of property,
how much are they selling it for? That will tell me immediately whether they
are being sold more of a commercial development sales price or that price is pretty much in
line with their intended use for the property. Aesthetics to a piece of property that can
add value, make them more valuable are access to water, topography, tree cover, other utilities
that are close by and in place already, that property will naturally sell for more than
one that has no utilities, no access to anything, and is more on the outskirts of the country. 03:13 S1: Sometimes folks who live in the
city, we flush our toilets, turn on our lights, and run our faucet water every day, and those
amenities are not necessarily there on a rural piece of property. Therefore, you have to consider asking all
the right questions, are they accessible? How much is it gonna cost to bring these utilities
to the property? Is there a water line at the County Road,
or do you need to drill a water well? Is there a septic already on site or will
you have to install one? Electricity to the property is obviously important. I've seen it cost as much as $30,000 to bring
electricity to a rural piece of property. If your rural property does not have all of
the utilities in place, we would encourage you to get together with a builder, and those
costs can be rolled into your land and construction loan with Farm Credit. 04:10 S1: There are all different types of
deed restrictions. Basic deed restrictions are no feed lots,
no subdividing, maybe no poultry or swine. If you're a potential buyer that is wanting
to buy 20 acres in the country, for example, and you've already picked out the most amazing
mobile home that you wanna put on there, you have to consider the deed restrictions on
the property and consult with your listing agent because if mobile homes are not allowed
on that property then your dream is eliminated right out of the gate. It is important to speak with a Farm Credit
representative, a farm and ranch realtor, and/or the appraisal district to educate yourself
on everything that is acceptable for the property that you're buying. 04:56 S1: There are many different ways that
you can secure an agricultural property tax exemption. The most common are putting your own cattle
out on the property, leasing it to a local farmer for row crop, putting bees out there
for honey, as well as wild life, agricultural exemption. The appraisal district basically lowers the
property taxes on that piece of property based on your intended use. You want to take advantage of paying less
over the course of a 15, 20 or 30-year mortgage note; it can add up to thousands of dollars
and you have to apply for an agricultural property tax exemption for five years before
you can secure it if you're purchasing a piece of property that does not have an agricultural
property tax exemption. Some already have an agricultural property
tax exemption and when you purchase that property you are grandfathered in to have that agricultural
property tax exemption, but you do still have to apply with the appraisal district and explain
to them your intended use for the property. 06:02 S1: Environmental regulations. It is another variable to consider, especially
if you were going to be buying the property and putting a structure on it or subdividing
it because there may be endangered species on the property; otherwise you will be paying
hefty fines. It's very common on farm and ranch properties
that there may be buried trash piles, hazardous chemicals, old fuel tanks, those types of
things that we need to recognize how they can impact the value of the property and your
intended use for the property. It could be a very big deal if it's identified
that there are hazardous chemicals on the property; extraction of those hazardous chemicals
could really be costly to the borrower because it's regulated by EPA and other environmental
agencies. 06:47 S1: Here at Lone Star we know about
buying land in the country; we live and breath it every day. If you'd like more tips or information, please
click on the link below or give us a call, we'd be happy to help you.
