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Buying land needs to be thought out.

As the weather gets nicer and spring finally arrives, you may start thinking about buying raw or undeveloped land in the country. People buy raw land for many reasons:

  • An investment
  • Recreation
  • To become involved in farming
  • To get away from the outside world

Buying land is something that needs to be researched and not rushed. Before you even look at a piece of property, you need to determine your primary reason for buying land. That will help narrow your search options.

How do you want to use your land?

Recreational or a Getaway
Raw or bare land can serve as a getaway from everyday headaches and stress. This land may provide you with a recreational get away or retreat. Hunting, fishing and enjoying nature are a few recreational reasons for buying land.

An Investment or Farming
Land that is tillable can offer you an income stream. You do not have to become a farmer to receive farm income. Many Missourians purchase land that is suitable for row crops and then establish a lease agreement with a current farmer. Lease agreements offer income opportunities for both parties.

If the land is suitable for forage, hay can be grown, then harvested and sold. Again, you do not have to own the equipment or do any of the work to be involved in agriculture. You can simply own the land and offer a lease to an area farmer.

Paying for the Land

Once you’ve determined why you want to buy bare land, you may need a loan. Traditional banks often do not want to loan money on bare land as it is riskier because the land is usually in rural areas that may be outside of their normal territory. If you’re planning to buy investment property and receive income from the agricultural production, that may also be outside of a traditional bank’s comfort zone.

The other risk for a traditional bank is that should you default on your loan, the bank is left trying to figure out what to do with this land in the middle of nowhere. So what types of loans are available for bare land?

You may find you need an agricultural loan. An agricultural loan simply put is a loan secured by agricultural property. This property may have the potential to gain agricultural income. Agricultural loan providers understand the industry and the income potential bare land holds. They will be able to understand why you want to buy this land.

Our staff will be happy to answer any questions you have about buying land in Missouri.


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