Land purchase

[sodfather]

15 minutes ago, Buckmaster7600 said:

I have land that was a terrible investment, I bought it cheap had it logged and only have about 60k invested in 97 acres. The taxes are over 4K a year. It was one of the worst investments of my life. For that same 4K a year I could have a lease in another state that understands deer management.

I could buy a lot of fuel oil to heat my house for what I have invested in that piece of land to cut fire wood.

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4K a year in taxes? Did that go up considerably since purchasing? If not I hate to say it but you got hosed. I defently wouldn't even consider that sorry to say

[Buckmaster7600]

4K a year in taxes? Did that go up considerably since purchasing? If not I hate to say it but you got hosed. I defently wouldn't even consider that sorry to say

It's went up some. I don't feel I got hosed at all, it's 15 minutes from my house and in southern zone my house and other property is in NZ. It was exactly what we were looking for and the taxes are the reason it was purchased as cheap as it was.

It would also sell very quick for what what I have in it.

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[sodfather]

4 minutes ago, Buckmaster7600 said:

It's went up some. I don't feel I got hosed at all, it's 15 minutes from my house and in southern zone my house and other property is in NZ. It was exactly what we were looking for and the taxes are the reason it was purchased as cheap as it was.


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If it was exactly what you were looking for and only 15 minutes from your house then I'd say it was a good investment. An investment can be worth more than money. Good luck in the future with it sounds like a win to me.

[Buckmaster7600]

If it was exactly what you were looking for and only 15 minutes from your house then I'd say it was a good investment. An investment can be worth more than money. Good luck in the future with it sounds like a win to me.

Was and is are very different. I now now that too much land is as bad if not worse than too little. In hindsight it was still a terrible investment. We hunted it a total of 3 sits last year between my brother and I. After this hunting season we are going to have the lumber appraised again and see if it's going to be better to sell as is or to log then sell. I could have done way better with that money else where but luckily I won't loose anything.


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[stubborn1VT]

7 hours ago, Buckmaster7600 said:

I have land that was a terrible investment, I bought it cheap had it logged and only have about 60k invested in 97 acres. The taxes are over 4K a year. It was one of the worst investments of my life. For that same 4K a year I could have a lease in another state that understands deer management.

I could buy a lot of fuel oil to heat my house for what I have invested in that piece of land to cut fire wood.

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There are exceptions, and you decreased the value when you had it logged.  If you strictly bought it for a quick investment, then it didn't work out.   If you had an issue with the taxes and the deer hunting, then why buy it?  I'm sorry it didn't work out, but seems like you're expectations may have been off.

[stubborn1VT]

7 hours ago, Buckmaster7600 said:

It's went up some. I don't feel I got hosed at all, it's 15 minutes from my house and in southern zone my house and other property is in NZ. It was exactly what we were looking for and the taxes are the reason it was purchased as cheap as it was.

It would also sell very quick for what what I have in it.

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If you can sell it very quickly for what you have in it, then how is that a bad investment?  I'm confused again,

[Uncle Nicky]

9 hours ago, stubborn1VT said:

Land is something they aren't making any more of.  Land prices aren't going down.  How is that a bad investment?  You buy land.  You use it for hunting, recreation, firewood etc.  It goes up in value over time.  It's worth more than you paid for it.  Am I missing something? 

Yes, you are missing the fact that you have to pay property taxes, which are especially high in NY. You may be able to write the taxes off on your personal return/1040, but you will NEVER get it all back. Same goes for the loan interest if you finance, you will never get it all back (unless you are able to sell some timber or sign a gas/oil lease).

As an example- I bought my camp in Allegany county in 2002. Paid $60k for 58 acres. That's 15 years at $2,500 property taxes each year, so I've got $97,500 in already. That's not even including the home equity interest I've paid, let's average that out at $2,500/year also, now I'm up to $135k, add in $7,000 for work I've had done and a small shack I had built, now we're up to $142k. I worked out a deal to sell the place for 80k in 2009 (I want to hunt the place a couple more years), which is pretty much going rate in the area. Loss of $62,000. I was hoping for a home run with the gas leasing hubub a few years ago, but that's on hold indefinitely. I had loggers out looking at the place a few years ago, it will probably be 15 years before it's worth timbering.

Obviously, the write-offs on the mortgage interest and property taxes helped, they may have gotten me $1,500 back each year on my tax return, so I'm looking at it as only a loss of about $40k (so far). And I'm not even factoring in the gas and truck depreciation spent on traveling to the camp 4-5 times a year (300 miles each way). One could argue that I should have bought land with more mature trees, but anyone who has looked at land for sale knows the owners log first BEFORE putting land up for sale. Do I have any regrets? No..lots of great memories, experiences, and some great deer killed. But I will never look back on this as a great investment, but I like to con myself into believing it was still better than losing it in the stock market.

 

[stubborn1VT]

I get what you guys are saying, but I feel you're being awfully literal with your take on "investment".  I grew up with family land, and cannot imagine having to lease or worry about having a place to hunt.  I'm not saying people should buy land in order to make money.  I'm saying it's worth the money to own land, have freedom and peace of mind.  I would never buy land with the though of selling it and making money.  You guys can stick your dollars in the stock market, but does your 12% make you happy?  I feel that owning land is a more valuable "investment" in quality of life, but what do I know.  I'm just a farm kid at heart.  Hell, I think that land may be one of the only things worth spending money on.  To each his own.  

[sodfather]

40 minutes ago, Uncle Nicky said:

Yes, you are missing the fact that you have to pay property taxes, which are especially high in NY. You may be able to write the taxes off on your personal return/1040, but you will NEVER get it all back. Same goes for the loan interest if you finance, you will never get it all back (unless you are able to sell some timber or sign a gas/oil lease).

As an example- I bought my camp in Allegany county in 2002. Paid $60k for 58 acres. That's 15 years at $2,500 property taxes each year, so I've got $97,500 in already. That's not even including the home equity interest I've paid, let's average that out at $2,500/year also, now I'm up to $135k, add in $7,000 for work I've had done and a small shack I had built, now we're up to $142k. I worked out a deal to sell the place for 80k in 2009 (I want to hunt the place a couple more years), which is pretty much going rate in the area. Loss of $62,000. I was hoping for a home run with the gas leasing hubub a few years ago, but that's on hold indefinitely. I had loggers out looking at the place a few years ago, it will probably be 15 years before it's worth timbering.

Obviously, the write-offs on the mortgage interest and property taxes helped, they may have gotten me $1,500 back each year on my tax return, so I'm looking at it as only a loss of about $40k (so far). And I'm not even factoring in the gas and truck depreciation spent on traveling to the camp 4-5 times a year (300 miles each way). One could argue that I should have bought land with more mature trees, but anyone who has looked at land for sale knows the owners log first BEFORE putting land up for sale. Do I have any regrets? No..lots of great memories, experiences, and some great deer killed. But I will never look back on this as a great investment, but I like to con myself into believing it was still better than losing it in the stock market.

 

Great explanation thanks for posting 

[Buckmaster7600]

If you can sell it very quickly for what you have in it, then how is that a bad investment?  I'm confused again,

60k of my money has been tied into it since 20010 Plus 5K for a road. Plus we will call it 3500$ in taxes for 7 years. So 29500$ to shoot deer for 7 years. We averaged 1 buck a year of this property so that equates to around 4200$ per buck.

The main reason it was a terrible investment for me is that between my brother and I we own just over 300acres around our houses "we live 200yds apart." If I couldn't walk into my back yard and hunt I might think the other property wasn't such a bad investment.

Owning property is a great thing. The property I own around my house I wouldn't sell for 10x what I have in it. But it's my back yard I'm on it every day. Having just a hunting property that isn't very close to your house is a very serious chunk of change that will likely never pay its self off.


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[stubborn1VT]

That last part makes sense.  It isn't worth it if you don't get to use it/enjoy it often enough.  Plenty of variables to consider before you buy, but I think that's true of anything you're going to spend big money on.  

[sethf11]

I guess also you have to consider your future plans.

My plan is to buy, use it recreational and hunt then in about 10-15 years build a house on it and sell my current house. Financially that makes a little more sense but still losing money.

Better option is to just buy when I'm ready to build and save/invest what I would of paid for the land.


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[virgil]

I think that this is a question whose answers are really opinions, not fact. What might seem like a great investment to one person may not to someone else. It also depends on how you personally define 'investment '. If you're specifically referring to the prospect of a financial gain, you might answer differently than if you consider the reward to be the enjoyment you get from owning the land.  For me, I hope that I'll never need to sell my place- if I do, I hope I won't lose money. Other than that, I consider it the best possible investment because of how much I enjoy owning it. 

[chas0218]

On 8/30/2017 at 7:17 AM, sodfather said:

Seems about the same of what I found out. Anywhere from %30 to %50 down. I'm ok with 40 but may need to wait if they ask for 50. As far as buying it outright with cash I just don't have $100,000 laying around have 2 daughters and college to look forward to, I don't have Biz's money.... As far as buying a house with land that may be an option but it's usually out of my price range or it only has 15 acres or so. I'd like to step into something between 40 and up depending on the terrain an location. I'll keep looking I've waited 2 years now I can wait longer if needed 

If you can swing it try to get 50 acres or more, Unfortunately I bought 40 which is great but it is in Pref. Point WMU so if I had 50 I could get the landowner DMP. I didn't realize that until after we bought the property/home and we aren't turning around and selling a house we just put 30k worth of renovations into.

On a side note if there is a habitable structure some banks require a working septic, potable water, and permanent heat source(s) (wood stoves don't count).

[Steuben Jerry]

I must be on a different page as I never really thought of buying hunting land as an investment. I've got about 85 acres that I bought in three stages in the 90's and early 2000's. 7 acres for $900/ac, 43 for $700, and 36 for $1000 acre. We go through life only once, and we mostly get to live it as we want (within each person's means of course).

I've got friends who bought boats for that kind of money around the same time. They weren't investments either, but they're selling those for pennies on the dollar these days where at least my hobby "investment" certainly won't lose money. Not knocking the boaters, I'm a boater too.

I did build a house to live in on the property in 2008 (on the 7 acre road front parcel). I do want the same return most people look for when I sell it 10-ish years from now.

Property tax implications? Well, it's NY state. 12k + per year and rising. Thanks Andy and the previous bad governors!

I didn't get it just for hunting, we're using it all year long. But the land purchase was for my and my wife's lifestyle and we won't care about how our investment did when we're dust.

[chas0218]

21 hours ago, Steuben Jerry said:

I must be on a different page as I never really thought of buying hunting land as an investment. I've got about 85 acres that I bought in three stages in the 90's and early 2000's. 7 acres for $900/ac, 43 for $700, and 36 for $1000 acre. We go through life only once, and we mostly get to live it as we want (within each person's means of course).

I've got friends who bought boats for that kind of money around the same time. They weren't investments either, but they're selling those for pennies on the dollar these days where at least my hobby "investment" certainly won't lose money. Not knocking the boaters, I'm a boater too.

I did build a house to live in on the property in 2008 (on the 7 acre road front parcel). I do want the same return most people look for when I sell it 10-ish years from now.

Property tax implications? Well, it's NY state. 12k + per year and rising. Thanks Andy and the previous bad governors!

I didn't get it just for hunting, we're using it all year long. But the land purchase was for my and my wife's lifestyle and we won't care about how our investment did when we're dust.

Holy 12k in taxes? Is that 85 acres also waterfront? I look at taxes on land as depreciation like a car or boat you spend a set amount of money then yearly or quarterly or instantly is worth less. Real estate costs a set amount of money then taxes go up maybe not as fast as the value of the property goes up. It all really depends on the housing market, how much you paid for the property and how long you own it to make it an investment. 

Honestly real estate isn't a bad long term investment short term I know many people that loose money on real estate.

[Steuben Jerry]

2 hours ago, chas0218 said:

Holy 12k in taxes? Is that 85 acres also waterfront?

Well, it does have this on it. 1800 sq ft finished, a 1600 sq ft basement (unfinished) and a 30 x 40 pole barn with loft. Now it seems better but it's a hell of a lot for a hilltop home in Steuben County, although comparable to other homes in the area.

But unfortunately, no waterfront. Getting quotes for a pond though!

Edited September 7, 2017 by Steuben Jerry

[chas0218]

4 minutes ago, Steuben Jerry said:

Well, it does have this on it. 1800 sq ft finished, a 1600 sq ft basement (unfinished) and a 30 x 40 pole barn with loft. Now it seems better but it's a hell of a lot for a hilltop home in Steuben County, although comparable to other homes in the area.

But unfortunately, no waterfront.

I'm just over the border in Chemung county out by Beaver Dams. We are currently doing an addition on our home to make it about 2800 sq.ft. on 40 acres and a run down 2 car garage. I really hope they don't hit me as hard, we'll have to sell the place if our taxes go up that far. You mind me asking which township you are? If I had to guess it would be Hornby, we looked at places over there and couldn't believe what the taxes were.

[Steuben Jerry]

13 minutes ago, chas0218 said:

You mind me asking which township you are?

Town of Thurston. We had the land for about 20 years prior to building the house. It was vacant hunting land. When I first built, it wasn't too bad but the combined taxes have risen an average of about $800/year since. As I project that out to another 6-7 years when I retire, it will force me to sell. Most of the town and county taxes go to state required unfunded mandates (such as Medicare). The town tells me that they only get about 30% of the total tax money that is collected.

[chas0218]

8 minutes ago, Steuben Jerry said:

Town of Thurston. We had the land for about 20 years prior to building the house. It was vacant hunting land. When I first built, it wasn't too bad but the combined taxes have risen an average of about $800/year since. As I project that out to another 6-7 years when I retire, it will force me to sell. Most of the town and county taxes go to state required unfunded mandates (such as Medicare). The town tells me that they only get about 30% of the total tax money that is collected.

Wow that's nuts. We bought where we did because of the lower taxes based on the houses. If you go 10 miles down our road towards surrounding larger towns (Corning, Hornby, Horseheads, Watkins) they jump drastically. There isn't a lot of money in Beaver Dams and housing shows it. Don't get me wrong there are nice houses but not many which keep my taxes lower. Our neighbors house looks like a run down hunting shack with a tarp over half the roof, walls leaning, roof dipping, pretty rough looking. 

[slickrockpack]

there are investments and  then there are expenses for recreation, they are mutually exclusive expenditures.

if you buy land for recreation and view it as an investment you'll be disheartened, especially when you sell it and pay capital gains tax.

but if you view it as money spent in recreation, like a fine dinner out, or a vacation rental,  then you'll see only the enjoyment of ownership/

don't buy the wrong property for the right reason, but if you do buy something for your pleasure see it for what it is,  a recreational expense and don't confuse making money with an investment with just plain ol having fun.

every new car boat or camper purchase devalues the minute you buy it, but if you consider it rental fee for your fun, you'll be happy while you have it.