Top Factors to Consider When Buying Farm Land for Sale

Some upfront research can help prevent costly mistakes when buying acreage and farms. Especially when it comes to ensuring the land is registered adequately before a sale begins.

This ensures that new ownership meets expectations and legal disputes do not arise in the future. It also protects the buyer from any financial liabilities.

Soil

Soil is one of the most essential natural resources. It contains the minerals and dead and living organic matter from which plants grow. It also enables crops to obtain the nutrients they need. People rely on soil for many vital functions, and good farmland requires a quality of soil that is high enough to meet the demands of the crops it will grow.

A significant property of soil is the ratio of its sand, silt, and clay particles to each other. This mixture, called the “soil texture,” is used to classify soil. For example, soil with a more significant percentage of sand will be called sandy, while soil with a higher rate of clay will be called loam.

It is essential for anyone who will be buying farmland for sale in Florida to understand the significance of the soil. This is because it is often the most expensive aspect of a property and will determine whether or not a crop will thrive or fail. A basic understanding of soil can help farmers decide what types of land to buy and how much to pay for it.

Location

The most significant challenge to starting or expanding a farm is often finding access to land. Understanding how land is owned and used can help new farmers decide what farm to create. It also reveals what resources are available to help.

Regional farmland real estate values vary widely due to various factors affecting returns on farming operations (see the map and table below). Farmland real estate values are highest in the Corn Belt, lowest in the Mountain region, and intermediate across the country.

There are about 911 million acres of land in farms in the United States. Farmers and ranchers own 61% of this land and rent the rest from third-party landlords. The remaining 31% is held by investors (individuals or groups that do not operate a farm themselves) and non-farming owners, such as corporations, trusts, and individuals not engaged in agricultural production. Beginning farmers can find opportunities to acquire this land through the Farm Service Agency’s Transition Incentive Program (TIP), which gives priority purchases to beginning, veteran, or socially disadvantaged farmers.

Accessibility

A farm’s accessibility is essential to farmers, especially new producers. Accessibility includes finding affordable farmland for sale and accessing capital to buy it. It also means using the land effectively and safely to grow crops, livestock, or other products to generate income and create jobs.

In a recent survey, 59% of young farmers named finding affordable land to buy as one of their top barriers to entering farming. This is especially true for BIPOC farmers.

The good news is that there are now more ways than ever to invest in farmland directly without the significant upfront cost of buying a whole farm. These options range from crowdfunding to REITs. They’ve allowed non-farming investors to diversify their portfolios by including productive farmland and are boosting the overall value of America’s farms. As this trend continues, it will make farmland a more accessible asset for beginning farmers and ranchers. As a result, MFT is working to create innovative models like our Buy, Protect, Sell program that provides a less financially risky onramp to ownership for farmers seeking to start or expand their operations. It also provides technical assistance and business planning support to help them succeed.

Water

Across the West, farmland is increasingly valuable for the water underneath it. GAIN works to make healthy, sustainable diets more desirable, available, and affordable for everyone – and that requires clean, reliable water to grow the crops farmers need.

Farmers irrigate their alfalfa with Colorado River water in fields near Cibola on the Arizona-California border. But the deal that a local investment company is proposing to strike with farmers would strip away all that water and send it 200 miles away to Phoenix suburbs and new homes.

While the proposal remains in its early stages, the idea of investors purchasing land and water rights to repurpose for development is drawing strong criticism. Investors argue that free-market forces will reallocate scarce water resources, while critics say profit-driven deals like the Greenstone plan will dry up rural communities.

Only recently, non-farming investors had difficulty getting a piece of American farmland due to its high upfront costs. But recent innovations, such as REITs and crowdfunding sites dedicated to farming, are making it easier for investors to get a stake in agricultural assets.

Future Potential

In the words of Mark Twain, “Buy land, they’re not making it anymore.” The demand for farmland has soared. Many people want to take up organic farming as a hobby after retirement, while others want a weekend retreat in a farmhouse nestled in the lap of nature. Moreover, more and more investors, pension funds, and institutional buyers are interested in purchasing farmland as an asset class to diversify their portfolios.

In addition to providing food security and potential investment returns, owning farmland helps reduce soil erosion and runoff. This is possible by reforestation and vegetative barriers to protect crops from heavy rains and floods.

However, when looking for farmland for sale, one should ensure that the land has a clear title deed and no encumbrances attached to it. This is important because it allows you to get tax benefits on your purchase and the interest paid on a mortgage. This will help you save a lot of money in the long run. Moreover, owning farmland is also an excellent way to build equity in your business, making it easier to obtain loans from banks.