Purchasing real estate of any kind requires you to weigh up a multitude of factors before deciding to go ahead with it. This decision making process becomes even more complicated when you are looking to buy rural land. Many of the same variables are in play, such as what you want to get out the property and its potential for future growth; but they have to be looked at in a different context. Here are a few of the most important things to keep in mind when considering whether to buy real estate in a rural setting.
Is This Intended as an Investment or a Permanent Homestead?
Know why you are buying the land. In many cases the distinction between whether you wish to own the property long term, or intend to on-sell it in the near future, can determine if it will be a good purchase for you. Even within the realm of investing, keep in mind what sort of timeframe you are looking at.
This is important for the simple reason that what makes a sound rural investment is often markedly different from what will make for a good lifestyle block. For example, a 10 acre section with cattle and a house that is long overdue for repairs may be a solid investment. There are assets included in the property, which given time and care could yield a tidy profit in the future. The same property would be less ideal for a family wishing to move out into the country and entirely unsuitable for an elderly couple looking to retire. Again, know what you want from your rural real estate purchase.
Is the Property Under or Over Valued?
This is something you would consider at all levels of the real estate process, but for rural properties it takes on a whole new level of importance. The reason for this is that both the floor and ceiling, so to speak, on the potential valuation of rural real estate is usually much more varied then for urban properties.
If you can find a piece of potential farmland that is currently not being used to its full potential, it could make for an excellent investment provided you have the capital to develop it. On the flip side, a farm that is running extremely smoothly may have little room for growth, unless you are able to purchase the surrounding real estate as well and expand outwards. Look at rural real estate not for what it is, but for what it could become.
Is There Potential for Development?
The logical flow on of this point is a consideration of whether your desired piece of rural real estate is equipped to support your vision. Maybe the soil is partially barren? Maybe the type of grass is incompatible with livestock you wish to bring in? Is the property accessible enough to efficiently carry out repairs? With so many added variables, you really need to do your research on all aspects of the property if you are considering purchasing rural land. Fortunately, there are real estate firms out there who will be happy to help you with this process.