Written by Terry Carlisle
Mossy Oak Properties of Birmingham

There is no doubt that the quest for rural land ownership is gaining momentum. At the mossy oak properties birmingham office we have the opportunity to work with a considerable number of clients who are in the process of acquiring property. We are continually amazed by the number of new potential landowners and their various reasons for jumping into this arena.

Land ownership has always been a desirable option but today there is an interest level that is disproportionate to prevailing market dynamics. Demographics do play a significant role in the increased interest yet fail to explain the diverse nature of the request. All markets are affected by the population profile. As a society we have a huge segment of our population which is stable and affluent. The easy explanation for the heightened level of interest may have its roots in this demographic component. Is it as simple as a balanced, aging population with unprecedented disposable income looking for a safe place to park capitol? One can’t help but wonder, especially with the current state of the commodities and securities markets. It’s interesting that as the markets show signs of recovery there appears to be no retreat by these potential consumers. The bottom line is for a variety of reasons we still want land.

We spend a lot of time with our clients in an effort to assist them in realizing their dream. It is crucial to our success and moreover to our clients happiness that we not only understand "what" they want but as well "why" they want it. Countless interviews have revealed that there are three principle motives and a host of contributing factors which should be considered in the buying process. The primary buying motives that we experience are: recreational, investment, and hunting. The titles are simple but the definitions are unique to every potential landowner.

The broadest segment of the market is recreational. If a potential purchaser is considering a purchase based on this premise they should do their best to define their recreational intent before spending too much time in the field. The lure of a beautiful property can be overwhelming. There is a lot of gorgeous land out there that fails to meet the buyers recreational requirements. We advise potential land owners to prioritize their requirements. The objective is to find a property that fits the recreational criteria. Soil types, topography, proximity to services, location, size, features, and bio diversity are just a few of the elements one should consider. The key to navigating this maze is to let your recreational desires be your guide.

I met a landowner some years ago who made all of this perfectly clear. He had retired and had a love of horses; his dream was of a rather expansive horse farm to share with his wife and grand children. The couple acquired a beautiful piece of property in the alabama black belt and commenced to build their dream. They spent virtually all summer preparing facilities for their prized livestock. They built an arena, barn, gorgeous tack room, and several other features consistent with their vision. Once the rains of fall blessed his land he realized his error. The dense gummy soil for which the blackbelt is famous took a serious toll on the horses. They could not walk a hundred yards without all the complications of treading water in a mud bog. Needless to say the utility of the property for the purpose originally intended was seriously compromised.
We advise our clients to subordinate every property to its intended use. Potential purchasers should be unyielding regarding those features which are crucial to the desired recreational activity. Adversely there is no property that will satisfy all recreational needs. Purchasers need to be acutely aware of the requirements that are less than perfect but adequate for lower priority items.

Don’t be afraid to modify your priorities. Once a potential purchaser spends time in the field reviewing properties the priorities can change. Changing priorities is advisable provided it is a conscious change and not the result of an emotional reaction to an aesthetic feature. A beautiful view is awesome if your plan is to spend most of your time sitting on the porch.

The second most common buying motive that we encounter is the investment. I am convinced that all land is a good investment. I don’t believe that all land is a good investment today! A good example is the astounding prices paid for swamp land to be used for wetlands mitigation. Just a few years ago this land was worthless and today it can sell for thousands of dollars per acre. Land use and requirements change. As changes occur, land values are affected resulting in alteration of values impacting investment returns. Wouldn’t it be great if we were all blessed with a crystal ball? We could see changing trends and position our clients and ourselves perfectly. In the absence of this knowledge we generally take a pretty conservative approach.

technology and the ability to access information has impacted this industry. Informed sellers and buyers are capable of accessing information which allows them to increase the probability of transacting at levels consistent with fair market value. Fair market value can be very misleading. Before we can talk about fair market we must talk about which market. There are several defined market segments of rural real estate.

We will take a moment and discuss a few:

1. Commodities: properties that are valued primarily for their ability to produce crops or timber. As a general rule these properties are remote and often have very reasonable prices associated with the raw dirt. As a general rule most commodities properties are sold to other commodity producers in large blocks. Attempting to purchase these properties by individuals, especially in small quantities can be a daunting task. If an individual was successful at this endeavor then they would have several plausible exit positions if they wanted to sell.

2. Investment: in recent years there has been a considerable amount of divestiture by the commodity groups. Several investment groups have been formed that are willing to pay a little more than commodity prices for large tracts. These groups develop and divide the property for sale to the recreational user.

3. Recreational: properties that possess high levels of recreational utility. These properties are reasonably convenient and possess a level of diversity to support a series of outdoor activities. A diverse property with a good infrastructure that is reasonably convenient can be worth several hundred dollars per acre more than its commodity counterpart.

4. Improved recreational- these are high utility recreational properties that are highly developed. These properties usually have well developed camphouses, structures, infrastructures, and management plans. These are essentially turn key recreational properties.
Based on this information one can better determine the fair market value of a desired property. Potential purchasers need to be aware of where they are entering the market and at least consider their exit position before making a purchase.

Commodity property can be a great "buy and hold" proposition. It would be a mistake to think that all of this land can be developed to recreational or improved recreational status. If a landowner enters at this level with expectations of exiting to the higher markets they may be very disappointed.

If you are buying for investment purposes make the following determinations before you proceed:
• determine your point of entry
• determine your
investment goals
• determine your exit position
The hunting motive is probably the one closest to my heart. I could go on for days regarding this premise for acquiring property. For those of us who are passionate about this element, the dream of private ownership can be overwhelming.

It is very difficult to be objective when you are emotionally charged. Acquiring the right piece of hunting property requires that discipline. The first thing i would suggest is to follow the advice given earlier regarding any recreational tract. Land to be utilized primarily for hunting requires additional focus. Try to visualize the intended use. If you see yourself deer hunting with five buddies every weekend then you must have enough land to with stand the pressure. Sometimes owning a small piece and leasing property in close proximity is the answer to this dilemma.
Make sure you buy in an area that is known for the type of hunting you love. It is not just the game but the community that you choose that can add a tremendous amount of pleasure. If your passion is for deer hunting you probably don’t want to by in an area that is primarily known for duck hunting. You may be able to take plenty of deer but you won’t be part of a community with like type enthusiast. A key consideration beyond the hunt and the game is who you share it with.
Consult with a biologist who is familiar with the area. Determine a properties current status and its potential. There is a wealth of knowledge available; all you need to do is ask.

i was discussing the issue of land purchase motivation with a friend the other day and he provided me with this conclusion.
"it’s as american as mom, apple pie, and the lust for elbow room: to find and purchase a slice of country heaven to call your own. A place to sleep under the stars with wide-open thoughts. A place to share outdoor experiences with family, friends, and god. A place that causes the spirit to stir and soar.

If it’s a rustic cabin in a serene setting, a private hunting destination, or a rock solid investment land is the common denominator."