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ATB
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# Posted: 12 Apr 2012 11:00am
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I have been looking for acreage for 6 years, I have been very disciplined in what I was going to spend and it has been fortunate because values have dropped. I have made had 2 offers that were accepted 1) title work came back no legal easement and access deal died 2) I found out 45 out of 60 acres were in the Federal Wetland protection and would have had a ton of restrictions. Guy wouldnt drop price deal dead. Anyhow it looks the only people with remaining 40 acre plus pieces are holding out hoping for prices of 6 years ago! The comparables are of actual sales over the last 18 months are in the 1300 to 1800 range which I have offered to folks and they are insisting on 2000 to 2200 per acre is their bottom. Explain to me their rationale, in my opinion paying 2000 per year in taxes and any interest on loans would be and what if prices drop more would b3 worth taking the going rate of sales! One piece I made a offer on has been for sale for 5 years and the guy wont budge on price!
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MtnDon
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# Posted: 12 Apr 2012 11:31am
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When they won't budge on price after a long time it means they are not "motivated" to sell or delusional. Nothing much you can do about either unfortunately. G/L
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Rifraf
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# Posted: 12 Apr 2012 11:43am - Edited by: Rifraf
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I dont think 2200 per acre is all that crazy , there are some folks paying that, so why wouldnt a seller wait for those folks to come around. That is if the seller has time to wait.
Most higher prices are present in owner financed scenarios, not cash deals, at least thats been what I have seen the last year looking for my land.
You cannot really blame somebody for selling high, if not selling doesnt bother them, then they might as well hold on to it until it does sell.
I got mine for 800 per acre, by walking literally up to farmers doors and asking if they wanted to part with a few acres so my wife and I could build a cabin. Alot of them said no, but they were always very nice to me. Granted, the survey and such added another 1000.00 to the grand total.
I hope your luck turns around.. where are you willing to get your land. what state(s) ?? I know you are currently in Texas, im guessing you want to stay there .. but just so you know
I have made a few contacts in Missouri and know a few sellers at about 1200 - 1800 per acre.
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Martian
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# Posted: 12 Apr 2012 11:54am
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You are caught in the real estate conudrum; both the seller and the buyer have a value in their respective minds, and the deal can only be done when those two values coincide.
You have gone landless for 6 years. What have your opportunity cost been? You have no land. You haven't started your project. And the money you are holding is worth less by at least 12% (2% inflation/year for 6 years)
The seller has paid the taxes, true, but they also still have the land; which they are not making any more of! If you are talking about 40 acres, that means a loss, for them, of approximately $20,000 if they sell to you for $500/acre less than they are asking. That means they can hold out for 10 years before their taxes equate to selling at your offered price. Chances are, it would take even longer if they deduct the property taxes off their income tax.
You obviously think the property is going to go up in value over the next ten years; they do, too.
At some point, the two of you will decide to compromise or one of you will walk away. Don't stand on principle too long or you may find yourself only having principle to stand on because somebody else was willing to come closer to their asking price. I can tell you from personal experience, its better to stand on your land than to stand on your principles.
Tom
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toyota_mdt_tech
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# Posted: 12 Apr 2012 12:12pm
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I paid 37K for 20 acres. I paid it off in 3 yrs and now have a cabin I built on it, paid in cash. I wish I would of started sooner, but I bought shorly after the idea hit. Glad I didnt wait. I have been enjoying working on it more than anything.
Nice quote "martian"
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optimistic
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# Posted: 12 Apr 2012 12:17pm
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Try to go the the county/state/city/whatever property records and literally sift through it for potential land - in terms of location and size that you want. Obviously only look at ones that are vacant land. Many will have the owner's name and address listed there and a quick google sometimes finds a phone number. Call them or mail them that you are interested in their land or if they will be interested in selling.
You might be surprised
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Seto
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# Posted: 12 Apr 2012 12:56pm
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i bought a 6 acre lot for 7000, paid cash i had saved up so i owned it free and clear. the place was small but i have enought trees on all sides to give me privacy and the neighboring lots are cow pasture and corn fields. i got it cheap since it was once used as a DOT landfill, and the rock piles prevent any large construction, i saw it as an advantage since i could get a starage building delivered onto it as a cabin and not need a foundation other than setting it on the rocks directly. the guy was trying to sell for years and when i showed interest and was the only person who wanted it despite the problems to typical housing he dropped the price significantly.
my reccomendation is to look for smaller tracts than a 40 and up, a 10 to 15 will be a lot easier to find (at least in the northeast) at a reasonable price. if its not enough land you can always buy additional lots nearby later. i would also reccomend looking at tax auctions (i bought an old house with an acre of land for $4000 back in 2000, and a relative got a 10 acre lot adjacent to a state forest for $800), my last suggestion is to look for "junk" land, places that are not high value, the wetland you described might be in that catagory but they guy had a high price, i have seen 25 and 30 acre lots in my area sell for as little as $9000, half may be wetland but if a spot on it is not then you build a cabin on the ok spot and only use the wetland area as a hunting, fishing area. junk land is the places that no one else would really want due to restricted use, a sall cabin is easier to build in such places because of lower impact on soils. the one sale might not have worked but if you will utilize land most others will not (junk land) you can haggle a seller down most times since they are not as easily going to find another buyer.
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ATB
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# Posted: 12 Apr 2012 12:57pm
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Thanks for the feedback a few additional items of info:
I am in Michigan and am looking "up north" to me over 2 hours from my house.
My holding out really has only cost me the enjoyment of putzing around on the land and delaying the build of the small cabin because I have been using leases only a hour away for hunting that are cheaper than the property taxes owned land up north.
Martian some good points but I am not really sure all real estate is going to be that great of an investment in 10 years. In Michigan most northern acreage pieces were hunting camps and farms both of those numbers are in decline, add no jobs (so no need for residential) mix in over $4 gallon gas tie in folks with kids and all the activies they have equals less time to drive up north. All these will limit demand.
Looking at actual ROR rate of return in real estate my house for example I have owned for 13 years and put 20% down when I bought it I tried to refinance 3 years ago and they said I would have to come out of pocket to get back to 20%! Values have come up to where I am positive now but just price paid versus market, ignoring interest cost, renovation cost, taxes, maintence cost. Add those in and my home is a big loser of money in over 13 years of being in it.
A recreational property will not have fancy bathroom or kitchen remodels like my wife has wanted on the house but still will have taxes, interest and maintence costs.
You are right on the standing on principal we are $6,000 off on what we can agree on and in the grand scheme not a big deal. But I feel if I go up he's only dropped $2,000 and I came up $6,000 so I lose, which is ridiculous when I show him and I dont have a property!
Interested on your thoughts on rural acreage as an investment. Not to make a ton of money but not to lose after 20 years!
Thanks for listening
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toyota_mdt_tech
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# Posted: 12 Apr 2012 02:16pm - Edited by: toyota_mdt_tech
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Does Michigan have a special tax status for timber land, pasture land, agriculture land etc? I know my 20 acres was minimal, ie $32 a year. Check in your area, you may have the same deal. Then just owning the land before building anyting on it wont cost you a bunch. It was a huge selling feature when I bought mine, in fact, it closed the deal. With my tiber, I am an agricultural, ie timber farmer.
In other words, be cheaper to keep till you are ready to build.
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spicyacres
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# Posted: 12 Apr 2012 02:26pm
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my 2cents:
The global financial crisis over the last 4 years has seen both declines and increases in certain asset groups. Investors are either positioning themselves for deflation (ie. buying treasuries) or for inflation (ie. buying gold, silver, and other hard assets). The question of what land is worth and if it's a good investment boils down to how you see the future. IMO, land is a hard asset, and good quality land will appreciate in price. But land is not a generic commodity, just like one house is not the same as another house. I paid $2000/acre for 80acres of fertile farmland. That amount would not buy me the smallest shoebox sized condo in my area. Which asset has more value?
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ATB
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# Posted: 12 Apr 2012 02:37pm
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Quoting: toyota_mdt_tech Does Michigan have a special tax status for timber land, pasture land, agriculture land etc?
They dont which is a rip. Aggricultural, Residential Commerical, If not 50% tilable you are residential.
40 acres of swamp is is residential and non homestead to boot and if bought for $60k would have about $1500 in tax.
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Martian
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# Posted: 12 Apr 2012 03:54pm
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I guess there is a difference in how we think of our land. I was very fortunate in 1999 to buy what, for me, is the perfect piece of property. While it is now worth at least 10 times what we paid for it, I wouldn't sell it if offered 100 times what I paid for it! It is my perfect spot; not an investment.
Is rural land a good investment? My parents bought their original 220+ acres for $50/acre in 1948. They thought that was high! In the 80's, they were offered $10,000/acre but turned it down. In 2005, the land was sold for $5000/acre. Over the years, we ate food raised on it, played on it, and worked our butts off on it. I'm glad they scrimped and saved to get it. Does that mean all land is a good investment? No. But, if you want a piece of land, you've got to bite the bullet and jump in. Worst case, you'll have a place that is yours. Best case, you'll have a place that is yours, and its worth a lot more than you paid for it.
Tom
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MtnDon
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# Posted: 12 Apr 2012 04:03pm - Edited by: MtnDon
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Recreation properties are the first to get hit in any economic crisis. So in my opinion the only investment value our mountain acres have is their physical and mental therapeutic value to myself and my wife. Hopefully the value will not drop, but if it does we have also had years of enjoyment alrerady and hopefully many more. It is paid for.
Land at 2000-2200 an acre is actually a bargain as far as we are concerned. martian reminded us,"it's not being made anymore." Here in the Jemez Mountains a 1.02 acre lot just sold; flat lot, corner by dirt/gravel road, telephone and electric grid nearby, no water, no septic. Asking was $29,900; not sure what it actually sold for. It was on the market from late summer, early fall.
We paid $19K an acre in 2006. No power, no nothing but trees, trees, trees. Probably worth more today just because it is very difficult to find vacant mountain land for sale within an hour and a half or so of the big city. Look at some of the other vacant land prices in the area we're in. It'll blow your socks off.
So, if I wanted what I'd been looking at and had to reach a little deeper, I think it's a bargain. As long as it's paid cash or with a very low interest loan. And of course, as long as it's money that will not cramp your life in any huge manner if you can't readily regain the purchase price.
It's an investment in your sanity, not an investment to return cash flow. IMO.
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ATB
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# Posted: 12 Apr 2012 04:24pm
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Quoting: MtnDon It's an investment in your sanity, not an investment to return cash flow. IMO.
Yep, Thanks everyone for your feedback.
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ErinsMom
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# Posted: 12 Apr 2012 09:52pm
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I found out yesterday that a MD my sister-in-law works for just bought 170 acres (3/4 pasture) for $240,000. This is in one of the most beautiful counties in East TN. Why can't I find 5 - 10 acres.
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Rob_O
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# Posted: 12 Apr 2012 10:07pm
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If you have been looking for 6 years, and comparable properties have sold at the prices you want to pay within that time frame, why did you not buy one of those properties? If they were unsuitable for your needs, can you really say they are comparable?
Does it really matter in the long run if you pay a few grand more for the property that suits you?
Good luck!
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Rob_O
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# Posted: 12 Apr 2012 10:34pm
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Quoting: ErinsMom Why can't I find 5 - 10 acres.
Because everyone wants to buy 5-10 acres. I was ready and wiling to pay the going rate of $75k for 10 acres and instead got 27 acres for 100K
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Anonymous
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# Posted: 15 Apr 2012 06:19pm
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I think there is a publication, that sells vacant land, for repro, and basic property in somewhat isolated locations. Cheaper land, but allows for leverage if you find something via private sale.
Its under auctions, and or organizations/company that buys, or promotes land sales. usually due to unpaid taxes, or alike, try that.
Gives folks a reflection point, to really understand the value and need of their "land" purchase, or midlife crisis!
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hakalugi
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# Posted: 12 May 2012 09:02am
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i think martian is 'on' in his analysis. and as far as $2k a year in taxes on something that sells for $2k/acre (roughly) - the that was corroborated by another poster in your state - man, what a ripoff.
i'm in VA and have 40 ac valued at > $2k an acre (less than 1.5 hrs from DC) and my taxes are about $240/yr total. No permanent improvement on it, yet, but based on speaking with my neighbors, it's not in a different 'bracket' just that there are no additional value added from any improvements (structures) not yet on it. even if it doubles in value with several strucures added, it'd still be < $500 yr.
2k a year for 40ac in taxes? ... sheesh.
but, the overall sentiment is: it's worth what the market is willing to bear. if the sellers either can afford to wait and see other sales at those levels or are willing to wait, it's their prerogative. good luck.
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DaJTCHA
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# Posted: 12 May 2012 02:55pm - Edited by: DaJTCHA
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Although I know we paid top dollar for our little "frontage" property of 1.25acres, having it located on a private dead-end road at the top of the mountain, heavily forested, two sides adjacent to 550K acres or national forest and being located in the heart of NW Pa.'s trout fishing treasure chest...made what we paid=worth it. We could have easily purchased a lot in the 3-5 acre range for just a few thousand more than our investment, but the locations killed them for us. Many factors play a roll in what works for you and sometimes you just have to say "Oh well!" and realize you're not taking any of it with you when the Reaper comes a knockin'.
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Borrego
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# Posted: 12 May 2012 03:57pm
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We paid $3000 per acre for ours and would have happily paid more. If you find a place that talks to your soul, it is priceless. ATB, you must not have found 'the place' or 'the area' yet, because the numbers you're discussing are not insurmountable. I would swallow pride and get the place if it talks to ya. I like this saying:
"money is a renewable resource, time is not"
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PA_Bound
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# Posted: 12 May 2012 08:31pm
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At about $3K per acre, I know I paid more for my land than what everyone "in the know" said it was worth. But it was love at first site when I walked it the first time and, like Borego, would have paid more if necessary. And every day it becomes more priceless to me.
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cabingal3
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# Posted: 12 May 2012 09:31pm
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we paid 10,000$ for an acre and a quarter but it was 100$ down and 100$ a month.we got it paid off finally.then we bought the adjoining property to it for 7000$.and it is 100$ down and 100$ a month.it had a well on it.we are so happy cause things are so high right now.then too-this is sort of the going price out where we got our woods.its a good deal cause it is out in the boonies,tons of trees for building and heat and a well on it.good luck on your search.
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iammyowntroublemaker
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# Posted: 24 Jan 2013 02:08pm - Edited by: iammyowntroublemaker
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we have 5.9 acres, with a dug well and mostly all bush, 225ft frontage on 4 season road, near wineries, paid $85K.
to spicyacres:
we have property in the county as well and would love to chat regarding plans / permits/ etc. and your experiences in the county (besides drinking wine, barley days, or cider) with the zoning and building departments if any...
cheers
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Purplerules
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# Posted: 24 Jan 2013 04:38pm
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We paid 20K for 3 acres near the lake with a private road. (we do have a view of the lake through the trees). But the half acre lots on the lake were going anywhere 50k to 100k. Ours did have water well hook-up so that was one expense we did not have to take on.
The first property was 30K with less acreage, but someone beat us to making and offer and it was really raw, no electic or water. no water view. So I think we really won out.
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sparky1
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# Posted: 24 Jan 2013 06:00pm
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55 acres near me 150K?,, 2 lane rural road on East side,land slopes gently to creek on west side---I HAVE NO INTEREST in this land, saw the sign,this is in southern Va,charlotte county,definitely Rural.
sparky1 in southern Va.
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UpstateNYADK
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# Posted: 25 Jan 2013 01:41pm
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paid $82k for 25 acres. $3300/acre in the Adirondacks.
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Anonymous
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# Posted: 21 Feb 2013 04:25pm
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1972,220 acres with 1 1/4 miles of lake frontage $35,000. Back than that was the going rate and there was a lot to choose from. Try finding a piece of land like that now. Ours is worth 1 million but we would never sell. We've been contacted many times to sell. We love our land and it would be like a death to sell.
Land in the UP or N of Detroit will go up in value and become harder to find because the baby boomers are retireing and they want to do it up north.
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littlesalmon4
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# Posted: 21 Feb 2013 04:47pm
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I paid about 13000/acre but this is out the front door.
07_L_S_and_sled_pics.jpg
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toyota_mdt_tech
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# Posted: 21 Feb 2013 08:52pm - Edited by: toyota_mdt_tech
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Hey, if you want water front 5 acres, about $10K, or 5K no water front if you dont mind buying in Alaska. Buy it online with your VISA card even. I have a buddy who bought 2 5 acre water front lots.
http://dnr.alaska.gov/mlw/landsale/otc/index.cfm
Hey, look on ebay too, crazy as it may sound, but they do sell land on ebay.
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