Would you like to own your own rural land? Something to cultivate in your retirement years? Or maybe develop and subdivide in the future? Real estate is generally a good long-term investment, but before you shell out a down payment on a 40-acre “ranch,” there are a few things you might want to consider.
Entry and exit
Entry and exit is a fancy legal term for access. When looking at a property, there may be a dirt road leading to it. Don’t assume this is a permanent path that you can use to your heart’s content. Check with your county recorder and seller about the condition of the road. If you are in any doubt, make sure that, as a pre-closing requirement, you are provided with a registered road access agreement that clearly describes the location of the road. If the seller can’t reach a roadside deal, walk away. Your land won’t be worth much if it’s landlocked.
Ask the vendor and locals in the area about road conditions during winter and rainy seasons. A dirt road may seem perfect on a hot, dry summer day, but it can turn into a quagmire during the spring snow melt. Find out if the road is plowed or otherwise maintained, or if there is a registered road maintenance agreement in which the owners who use the road share maintenance costs.
Location and cost of utilities
The nearest power line may be five or ten miles away, so you’ll need to find out how much it will cost to bring power to earth. It can cost thousands and thousands of dollars to connect to the network, and the total cost can be prohibitive. Solar and wind power sources have improved in recent years and could be a great alternative. Before you buy, you may want to see if there are any local alternative energy consultants and vendors in town. They can tell you the approximate cost of installing wind or solar power, what will be involved in maintaining your off-grid power source, and can share stories about others’ experiences. You may also need to check portable power generators. Sometimes you can convert gas generators to propane generators and then receive a discount from the local propane company because your propane generator is a primary source of power. Check with your local propane company.
When you’re looking at the land you’re thinking of buying, take your cell phone with you and see if you can get a connection. If so, you have started phone service. You may need or prefer to have a landline rather than cell phone service. As with traditional electricity, find out how close the nearest main line is and how much it will cost to connect.
When purchasing land in a rural area, chances are there will be no public water or sewer connections.
As for water, if there is already a well, you are in luck if it is a reliable well. Make sure all required paperwork is in order on the well before you buy it and require as a condition of closing that ownership of the well be transferred to you. If there isn’t a well, the department of real estate (or similar agency, depending on your state) may have a report on file that will tell you about water availability and average water depths. You may be tempted to enter into a well sharing agreement with a neighboring landowner. Shared well agreements, if drafted correctly, can be fine, but be sure to speak to an attorney first before entering into any type of shared well agreement. Well-sharing deals tend to turn into legal nightmares when ownership changes hands or when the pump goes out and users start fighting over who will pay to fix it. There are more and more regulations on well sharing arrangements and you are much better off spending some money on a qualified water attorney before entering into such an arrangement.
Instead of a sewer connection, you will most likely need to install a septic system that complies with local ordinances. If possible, see if the seller will pay proof of benefits before closing. You don’t want to find out after you’ve closed that the earth is almost pure clay and you won’t perk up.
Other types of utility considerations are:
* Where is the local landfill?
* Is there satellite service that can be used for telephone, Internet or television services?
* Are there local propane delivery services and if so, will they provide a tank and will they trench your lines?
Easements and Restrictive Covenants
When purchasing raw land in a rural area, particularly in the West, there may be cattle easements around your parcel of land. These easements can be ten or twenty feet wide, which means you will have to remove any fencing around your property so that cattle can be herded along the easement. If you don’t fence your land, cattle can have a “right of way,” so to speak, to roam your property and graze. Depending on local laws and types of cattle easements, if your land is not fenced and cattle eat the entire cornfield, the cattle owner will not be responsible for the loss of your crop.
Be sure to take a look at the title report before you buy. There may be restrictive covenants, such as the type of house or fence you are allowed to build on your land. You may be prohibited from building certain types of outbuildings, or there may even be restrictions on whether you can place a mobile home on the property. If you plan to eventually subdivide your acreage, there may be restrictions on the size of your subdivided parcels (subdivision involves many legal and compliance issues). There may be highway easements, telephone line easements, or other title issues that you need to be aware of. These matters are routinely disclosed in a document generally known as a title insurance commitment, which you will receive prior to closing if you are to receive title insurance.
Title and Survey
Be sure to purchase title insurance when you purchase your land. This will protect you if there are easements, covenants, competing property interests, or other clouds on the title that were not disclosed prior to closing.
Check if the land was measured and staked out by a registered surveyor or engineer. If not, demand that it be inspected and that a description and survey of the property be provided in writing. If the ground has been surveyed, walk around and locate the survey stakes. If the stakes were mangled or missing, have the surveyor of record replace them.