I Would Like To Build A Pond On My Property!!

I have had many discussions and questions about ponds. If you own a large tract of land, it is very nice having the opportunity to fish. It just adds one more activity to the list of fun things to do on your property. Activities might include hunting, riding ATVs, camping, hiking and fishing. It's a great way to enjoy the outdoors!

Landowners are always looking for ways to add value and recreational opportunities to their property. I am asked often about ponds so  I decided to talk to an expect and contacted David Beall, Outdoor Direction, LLC. David’s phone number is (706) 289-1874. Obviously regulation tends to be the big issue and many contractors have been regulated out of business. Here are some points of interest:

·         If the pond is less than 10 acres, a permit has to be issued by the Natural Resource and Conservation Service (NCRS). They can issue an ‘agricultural exemption permit’. These ponds can be used to irrigate crops and food plots.

·         If  the pond is over 10 acres a permit has to be issued from the Army Corp of Engineers. These permits can  take forever and the ‘sky is the limit’ on cost. After all, you are dealing with the Federal Government. Mitigation is required. Wetland mitigation is the creation or restoration of wetlands, done to mitigate for onsite or offsite impacts to wetlands. In other words you may be required to purchase wetland mitigation credits for disturbing an existing wetlands caused by constructing the pond.

·         In addition, if the dam is over 25’ tall and backs up 100 acre feet of water, a permit must be issued by the Environmental Protection Department (EPD) in Georgia.

 In talking to many landowners and contractors, it appears as though an estimated cost of $10,000 - $15,000 per acre covers most ponds. Bear in mind that cost can vary greatly from site to site.

One important point…. Land with existing ponds and lake will increase in value!!

For Information on Buying or Selling Land contact G. Kent Morris, ALC, RF at      (706) 457-0090

How Do I Go About Financing That Tract Of Land?

Many people are aware that it is important to diversify your investment portfolio. For some that may mean investing in land (timberland, agricultural, recreational or maybe that old farm you have always thought about retiring to). But, how do you pay for it?  Most people  do not have the cash.  Although interest rates on homes and land differ, there are correlations.  The trends are similar but it is unusual to get as low of an interest rate for rural property as you can get for a home.  The conventional banks tend to have tougher standards for land loans and usually require a higher down payment.  I decided to talk to a loan officer with AgSouth Farm Credit to get the facts. Russ Stewart is located in Greenville, GA.  These Farm Credit banks are located all over the state. They were formerly know as the 'Federal Land Bank'.

The Farm Credit banks will lock in fixed rate financing up to 20 years. On loans under $200,000, they will lock in a rate for 15 years with a 15% down payment + closing cost. On loans over $200,000, they will require a larger down payment. One interesting fact about these bank, they rebate approximately 25% of the interest portion of the payments at the end of the year in the form of a dividend check. Whether it’s for recreational land, timberland investment, or a combination of the two, these institutions have money available to lend.

For Information on Buying or Selling Land contact G. Kent Morris, ALC, RF at  

    (706) 457-0090

Is Now The Best Time To Buy Land?

If I knew that answer I would be retired on my own private island! But I can give you my professional opinion and the answer is YES  and here is why. I have included a chart as a visual aid to this article. To begin with, the land prices are average prices for a 3 county area located between Columbus and Lagrange. Columbus is the third largest city in the state of Georgia. Therefore these prices may be much different than the area you live in. The numbers are important but trends are what we are focusing on. The graphs covers Price Per Acre and Interest Rates (30 Year Fixed Mortgage) from 2007 to 2011.

Let’s discuss interest rates…with our national debt at a all time high and our printing presses running wide open, it is just a matter of time before the rates start moving up.

Many areas are experiencing improved activity in their housing market (this is a localized phenomena). Many areas maybe most areas are experiencing flat prices. Some have predicted we are at the bottom, it seems that way to me!. Housing will lead the way and land will follow later. Everyone needs a roof over their head and a bed to sleep in, you do not have to own land. Land is an investment and the buyer has a very different profile from the home buyer.

From a trend analysis it truly looks like the stars are aligned. I believe it is time to “jump in”. Land prices are at a 10 year low and interest rates are at a historic low. What are you waiting on?  I will promise you one thing, we will all look back and recognize that we had a historic opportunity. You never know you are at the bottom until after the prices start on the way up !!

For Information on Buying or Selling Land contact G. Kent Morris, ALC, RF at      (706) 457-0090

How Do You Estimate Timber Volume?

I have had lots of interest and questions on this topic. Well obviously it takes a long time to become proficient in estimating the volume of timber on a tract of land and I can not cover the topic in depth on this blog. However it is worth talking about so you, the landowner has a general knowledge about the topic. Cruising timber is actually a statistical exercise. The forester must determine how many trees to actually count and measure to estimate the amount of timber on a given tract of land. The practitioner walks through the woods and takes sample plot at predetermined spots on the land. For the sake of simplicity we will only discuss fixed area plots here i.e. if the forester estimates how much timber is on that 1/10 acre plot, he simply mulitplies by 10 to estimate the total volume on that acre of land. Likewise this approach can apply to a hundred acre tract or a thousand acre tract.

Next, the trees he measures are converted to volume. Volume can be estimated in MBF (thousand board feet), tons or cords. The following link show the various volumes for comparison sake.

        http://warnell.forestry.uga.edu/warnell/service/library/index.php3?docID=333

This is a very simplistic approach to a complicated exercise, if you have specific questions, please comment.

For Information on Buying or Selling Land contact G. Kent Morris, ALC, RF at      (706) 457-0090

A Successful Strategy For Investing In Land!

I have often heard, I will buy some land when I win the lottery. Good Luck…you have about a 1 in 3,000,000 chance of winning your lottery.

Here are some tips to get you started and achieve your dream of owning land:

1)    Start Small – Buy a small tract of land and work up to a large tract over time. This will probably take years, but you will become a better buyer over time. If you buy the right parcel of land it will appreciate over time and produce intermediate cash flow along the way. Cash Flow comes from timber harvesting, hunting leases, farm rent etc. Your first purchase maybe 20 or 30 acres. After you have built up some equity in the property it may be time to look for a larger tract and now you are an experienced land buyer!

2)    Purchase Smart – Work with an experienced agent who understands the market. Sometime there is property for sale that is not listed and an agent may have knowledge of these properties. These are properties where the owner wants to reserve the right to sell the property to a friend or relative.  If you buy smart, you might have immediate equity in the property.

3)    Financing - Seller financing is a great tool when purchasing land.  Seller financing isn't always advertised when the property is listed.   With seller financing the more you have to put down often the more attractive it is to the seller and in addition, the seller is able to collect the principal and interest.   The advantage to the purchaser is that they don’t have to go through the loan process, appraisal, underwriting etc with a commercial bank. Sometimes it is necessary to offer options ! Seller financing used in combination with your own funds or bank funds often is the difference between being able to purchase or not purchase the land!

4)    Income –  Income from property is derived 2 ways. One is the appreciation of the property (difference in the sales price and your basis).  The second method is intermediate  cash flow. From farm land these can be farm rent or leases, if you are actually farming the land. Timberland can create cash flow from thinning, select cuts or final harvest. Recreational property can generate hunting lease income and some property can offer a combination.

5)    Timber – Although this was part of the Income section above, let’s go into a little more detail. With timber buyers running the roads, deals are becoming harder to find. I use to cruise timber for a large landowner in Alabama and frequently he would buy the property for the value of the timber. In other words, he would sell the timber and have no money in the dirt. This is not so common place any more, but if you look hard enough you might find a property whereby the timber would pay 25 – 50% of the purchase price. These timber tracts offer some really nice recreational opportunities as well.

With Land prices at the lowest they have been in over 10 years and interest rates at historic lows, now might be the time for you to buy that piece of property you have always dreamed of owning !!

 For More Information on Buying or Selling Land, contact G. Kent Morris, ALC, RF   at     (706) 457-0090