For some people, buying a farm seems like an exciting new adventure just waiting to be started.
It’s just you and the land. You’re going to live off of your own blood, sweat, and tears. You’ve played Harvest Moon. You’ve watched enough Hallmark movies about city folk moving to the farm and living happily. You can do it too, right?
Well, before you go and buy a farm, there are some things that you should consider. Don’t go making rash decisions until you’re prepared and you’ve made all of the necessary considerations.
Buying a farm isn’t as easy as movies and videogames make it out to be. You need to make sure you’re making all of the right decisions; it’s a big investment!
Don’t worry though, we want to help. Keep reading for a few factors to consider for a first-time farm buyer.
1. Have You Actually Thought About This?
This might seem like a silly question for anyone truly gung-ho on buying a farm, but this is the most important question to ask.
Why is it that you’ve decided that you want to buy a farm? Does it look appealing on an aesthetic level? Does it make sense for you, your family, or your business?
Have you decided to make a massive lifestyle change and this feels like the correct move?
It’s time to introspect and consider why it is that you want to make this investment. Farms are a lot of work and a lot of money. While they can certainly be profitable for the right people, this is a big undertaking that shouldn’t be taken lightly.
Make sure that you’re going into this for the right reasons and that you’ve considered all complicating factors that can go into it.
You’re making a good first choice by putting in some research (like reading this article), but take it slow and make sure that you’re doing this for reasons that make sense.
2. What’s Your Revenue Forecast?
A revenue forecast is the amount of expected revenue that your business is estimated to bring in over a given period of time. If you’re buying a farm, you’re likely using it to make some money (even if you’re also growing for personal use and consumption).
Based on the plans that you’ve made for this farm, what is your revenue forecast for the first quarter? What about the first year?
Farms can be slow to start but think of the profits that you’re expecting to pull in over time and compare that to the cost of the farms that you’re looking at. Does the revenue match the cost?
Spending too much upfront on a farm that won’t result in strong revenue may be a poor decision. If you’re in this position, you may want to hold off, buy something smaller and more affordable, or consider renting.
You want to make sure that you’re eventually turning a profit. If your plans don’t show that happening, you either need to change your plans or pick a different and more affordable farm.
3. Where Are the Water Sources
When you’re working on the farm, you need to know that you have plenty of available water for your crops and any potential animals.
Where are the water sources on or near your farm? Are there any water regulations that you need to be following?
Farmland without abundant water sources isn’t as useful as it seems at first blush. Make sure that there aren’t any restrictions around your water use and that you have enough for your purposes.
Are there wells? Lakes? Is there a nearby river?
Crops use more water than you’re anticipating. Be prepared.
4. How Much Land Do You Need?
Only you know what you intend on using this farmland for. Have you mapped out exactly how much land you’re going to need to fulfill your purpose?
Before you buy a farm, make sure that you’ve done your necessary calculations. You can even make a vague “floorplan” of sorts to map out where you need everything to go and how much space it will take up.
While it doesn’t hurt to overshoot this slightly, you don’t want to overbuy by so much that you’re paying for far more land than you need. Farmland is expensive, and keeping it looking nice is difficult. Only buying what you need will save you time and money.
5. What Is the Soil Like?
Good soil is one of the most important things for a new farmer. You need to know the history of the soil to determine if it’s a good match for your plans.
Not all soil is going to be able to sustain the crops that you have in mind. Finding this out after the sale can be devastating. You need to rework everything and start from scratch.
Get to know the history of the farm so that you can determine what had been grown there in the past, what was successful or unsuccessful, and potentially even why the farm was left behind.
If there are any issues with the soil, it will be an expensive fix if it can be fixed at all.
6. Are There Environmental Issues
If a deal on a farm seems too good to be true, it’s wise to look into the local environment and see if there are any issues.
Similar to the problems with the soil, not all environments are hospitable for growing plants. Is the area so dry that it often goes into a drought? Is there so much rain that growing plants is a hassle?
Are there natural disasters that frequently hit this area? Earthquakes, hurricanes, and tornados can all wipe out a solid crop without warning.
These are things that you need to investigate before buying.
7. Are There Nearby Buyers?
How many markets or locally-sourced stores and restaurants are within a day trip of your farm?
Farmers’ markets are getting more popular with time, but not all areas are going to offer them frequently enough for you to be making a profit from those alone. Are the restaurants sourcing their produce locally? Do the supermarkets buy local produce from farmers?
Growing is the easy part. Selling might be troublesome if you haven’t identified your market beforehand.
8. What Buildings Are Present on the Property?
Does the farm come with buildings already on it? What kind of condition are they in, and do they match your needs?
Some old farms are sold as-is and the price for the buyer is lower. These farms may have buildings that are unusable, though, meaning that the buyer will need to put money into rehabilitating them or taking them down.
If the farm has buildings, do a thorough inspection to determine whether or not they’re still able to be used. Are they sturdy? Is there any rot?
If they need to be torn down, see if there can be a break made on the price or if they can be torn down ahead of time. Fixing and rebuilding is expensive and what was once a well-priced farm may turn into a money pit.
9. Is the Location Good?
We already mentioned proximity to buyers, but what about the rest of the location? Farms that are located with too much low land can end up flooding or getting marshy. Farms that are too high up may not get enough moisture.
Farms that are too close to roadways will suffer from issues with car exhaust as well as potential thievery.
You want to make sure you’re in a nice, temperate spot that gets enough (but not too much) sun and water for an ideal spot.
10. Do You Have a Real Estate Agent You Can Trust?
Choosing the right real estate agent is crucial when it comes to buying a farm. You want someone who knows the local market and who’s prepared to tell you the pros and cons of each property while also fighting for you to get the best and most reasonable price.
A good realtor can compare different properties for you based on your needs and wants and help you decide when a farm is a good or bad choice.
Your realtor is going to be working with you for a long time, so making sure that you have a good and trustworthy relationship will help you feel confident in your purchase.
Is Buying a Farm In Your Future?
If you’re looking to buy a farm for your next business venture, you have a lot to consider. Make sure you go through all of the steps and farm buying tips and try not to rush the process. This is a big investment!
If you feel like you’re ready to start looking into properties for your new adventure, visit our site. We have land for sale in upstate New York just waiting for your new farm journey.