Who hasn’t dreamed of owning a big tract of forest land to build a cabin, hunt, and manage timber on? Unfortunately, many never follow through with their dreams, as the cost of purchasing such land makes it seem unattainable, but it doesn’t have to be that way! There are several realistic ways to buy cheap land, including contacting owners of off-the-market parcels, searching for land with only the features and amenities you need, buying land at scale, and taking into consideration the overlooked assets on a piece of land. Using these tips, you can find your dream parcel for a price that doesn’t break the bank!
Look Only for the Features You Need
Land can be a tricky thing to value. How exactly do you put a price tag on bare ground? The answer depends on what exactly the ground could be used for. Is it developable? Is it situated on tillable, fertile farm land? Does it have access to the grid? All of these factors could add to or subtract from the value of land. The key to buying cheap land lies in examining what you want to use the land for and looking only for those attributes. If you want to build an off-grid cabin, don’t buy a piece of land that could be valuable to developers. If you want to grow trees, don’t buy a fallow field that could still be used as agricultural land. Critically examine every piece of land and be sure you aren’t paying for features that you really have no use for and can’t easily liquidate.
Consider Buying Larger Tracts of Land
When you look to buy cheap land, you have to consider value. Maybe you only have $15,000 and aren’t looking to take out any loans. You only need a few acres, and you need to make it work with the money you have. There is absolutely nothing wrong with that, but if you can afford it, buying larger parcels can bring the cost per acre of land down substantially! While a single acre of off-grid land can cost upward of $7,000 in some places, a larger tract of 100 acres of timberland could sell for $50,000, or only $500 per acre! If your goal is to get the best value land, bigger is definitely the way to go.
It may seem like this advice contradicts the rule about buying only what you need, but the difference is that larger tracts of land (particularly forests and timberland) provide ample opportunities for cashflow.
Using Timber Arbitrage to Snag a Bargain
What if I told you there were times the sales price of land doesn’t fully account for the assets that already existed on the land? Its true, and it is more common than you might think. Standing timber in particular can be notorious for being neglected when people value land. The reasons for this are complicated, but a lack of market knowledge, the unwillingness to harvest, and an inherent difficulty in inventorying timber are all factors. Just how much can the value be ignored? Let’s take a quick look.
The value of standing timber to a landowner can be found in stumpage prices. Stumpage is the money paid by a logger to a landowner for the right to harvest standing timber. If we look at the prices of stumpage for where I live in northern Maine, we can see the following prices for two common but relatively low-value products made from younger, smaller timber:
|Product||Stumpage price (per ton)|
Those prices seem low, but 30 tons to the acre would be fairly normal stocking level for a stand composed entirely of smaller studwood and hardwood pulp, As an example, let’s pretend they occur on the land at a 50/50 rate. With those conservative figures, we can determine that the money a landowner would get for harvesting that timber would be $495 per acre. Now here is the kicker: do you remember how much you can get land for if you buy larger tracts? That’s right, you can get land for $500/acre. It’s basically free real estate. And after you cut it, you can still grow 1.8 tons of wood a year on every acre, so each acre would produce around $30 of wood a year.
Maybe $500/acre land is unrealistic for you where you live, but maybe where you live, stumpage prices are higher. Even if it doesn’t cover the cost of the land, don’t overlook the value of standing timber! It is probably the best way to buy cheap land.
Don’t Be Afraid to Make Offers on Properties Not Listed for Sale.
The real estate market is competitive these days, and I’m sure I don’t need to tell you that. Sometimes, then, the best way to win is to not compete! Use Google Earth to scope out properties that fit your criteria, identify the owner using your county or town’s plat maps and registry of deeds, and approach the owner with an offer to buy. I know it may sound daunting or crazy, but it can be the best way to buy cheap land. It’s hard to get a good deal when there are thirty other people trying to buy the same property.
I’m sure you are wondering why anyone would sell you land they didn’t put on the market to begin with. There are plenty of reasons. Maybe they bought the land 20 years ago intending to build a cabin, but life got in the way and now its just a tax burden for them. It could be they inherited the land from a deceased parent and would feel guilty about deliberately going through the arduous process of listing it with an agent, but would let it go if the right circumstance presented itself. Perhaps you catch them at a time when they really need they money. You never know until you try, and the more offers you make, the better your chances of success.
If you go this route, be sure to consult with a real estate agent. They can offer you valuable advice and services, including contacting the owner for you if you wish. That said, taking the time to knock on a landowner’s door, meeting them in person, and building a relationship with them can help your chances of success. Don’t forget to be human!
Go Out and Buy Cheap Land!
Whatever your reason for buying, there are plenty of ways to make your dream acreage affordable. No more dreaming! It is time to make a plan, go out there, and do it! You’ll be happy you did.