Are you ready to buy the farm? No, we aren't talking an early death. We're talking about buying farmland.
The number of small farms in the US has been growing for decades. Buying a farm comes with many unique positives, but there's no disputing it's a large investment. Before you get started, you need to know it's the right investment for you.
Let us help you make that decision. Here are 8 things you should consider before you buy a farm.
Buying a farm isn't something you should do on a whim. It's a massive commitment, so it's a decision you should only go with if you've had the time to think about — and you're of a clear mind.
You shouldn't purchase farmland if you've just undergone a huge upheaval in your life. If you've come out of a relationship or lost a loved one, you could be in a bad frame of mind for making decisions. That's not the time to make such a sweeping change to your life.
Even if you're in a settled period of your life, this time for reflection is crucial.
Give yourself at least six months to a year before you make the purchase. That's time to run through all these other considerations. It also gives you the advantage of a larger perspective.
Buying a farm is a big commitment. If it doesn't fit your lifestyle, you're likely to pack up and sell it within the year.
That's why you need to consider if buying a farm is right for you and your family. If you have kids, for instance, the farm life may get in the way of their social lives and education. You may have to examine whether you're prepared to homeschool or limit your distance from civilization.
This is just one consideration. There are many more, but only you know the full details of your life. Make a list of pros and cons, and work out which of those cons are things you can work around or are otherwise outweighed by the pros.
Farmland can come at a high premium. It might seem like a patch of dirt, but landowners recognize the demand for high-quality farmland and will set an appropriate price for it.
If you're buying farmland, you'll need to have enough money in your pocket to handle the downpayment. Then there's the mortgage to think about, for which you'll need a healthy source of income and a strong credit rating.
You'll also have ongoing financial responsibilities to think about. Running a farm will place many financial demands on you, and you need to be able to meet them without going into extreme debt.
Before you decide on buying farmland, it's worth taking a look at the alternatives.
There are many different reasons for purchasing a farm, so the alternative options may vary from person to person.
If you're done with city life, for example, then purchasing a rural property could be enough to satisfy your urge for a simpler life. If it's wide open space you're after, you might not need farmland to achieve it. Even a rural home with some natural acreage could be enough.
If your dream focuses more on growing crops and raising cattle, then you should also consider smaller compromises. A small homestead, urban homesteading, or even a community garden in an urban area could scratch the same itch.
Unless you're supporting your farm purchase with a personal fortune or an investment portfolio, then you'll likely want the farm to make some money for you. The primary purpose of a farm is business, after all. There are cheaper ways to live in the country.
You may need to run some numbers on the farm. Remember to take into account its history, which will give you the clearest idea of its economic background.
You'll need to draft up a business plan and treat the whole thing like a serious business — which it is.
Owning a farm brings a wealth of responsibility with it.
Here are just a few things a farm owner needs to think about:
And the list goes on. Some of these responsibilities will demand attention every day. Others will need frequent check-ups. It's likely you'll need help, so you'll also have to think about how many hands you have available to cover the work.
There's no getting around the financial investment a farm represents. A farm can be expensive to maintain if poorly planned, and making a profit from crops demands some expertise if you want to compete with industrial growers.
For that reason, you should be in a secure financial position before you consider buying a farm. That includes the financial safety net you'd need to pack it all up and move back if it fails.
Now you're a bit closer to a decision, it pays to know your purpose in buying a farm.
With your intentions in mind, you can start looking for the right kind of farmland for you. Depending on what you'd like to grow or what kind of livestock you want to raise, you'll have to make decisions about the particulars.
What you're looking for in a farmhouse will become a factor, too. If you intend for your farmhouse to be a recreational place, then you may opt for a larger size than if produce is your primary focus.
If you've checked off many of the points above, then you might be ready to buy a farm with a clear mind. It's a life-changing decision. When made by the right person, it can be the positive decision of a lifetime.
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