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I WANT to buy Farmland!

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  • jfoxcpacfp jfoxcpacfp 
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    Status: Financial Advisor, Accountant, Small Business Owner
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    Joined: 01/09/2016
    he’s a JD/CPA.  i didn’t really ask why, he just said didn’t feel we needed at the present time. i can ask him again

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    Is it just raw land (low liability) or a farm (high liability)?

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #229505 Reply
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 2582
    Joined: 09/18/2018

    @Kambam,
    “Perceived safety ” is the operative phrase.

    No debate intended , but population density has an impact. Does it feel like isolation or peaceful solitude?

    #229507 Reply
    q-school q-school 
    Participant
    Status: Physician
    Posts: 2492
    Joined: 05/07/2017
    he’s a JD/CPA.  i didn’t really ask why, he just said didn’t feel we needed at the present time. i can ask him again 

    Click to expand…

    Is it just raw land (low liability) or a farm (high liability)?

    Click to expand…

    farm.  gmo soy this year.

     

    #229510 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 874
    Joined: 01/26/2017

    I’m in my mid 30s working hard in private practice.  I grew up on a farm and now live 7 hrs from my folks.  I miss the driving out in a truck and checking crops and seeing deer and wildlife – it makes me happy-.  I have maxed all retirement accounts since I have started working 2 yrs ago.  I would like to purchase some farmland 80 acres or so with a goal of 4% return (cash rent, CRP etc).  I realize other investments could return higher but I already am a good indexer and I don’t want to family home rentals.  Any ideas on asset protection, liability protection, and tax reduction on buying farmland?  I thought of forming a S Corp and having a small salary taken with most of it going to expand within the S Corp over years.  If I do this can I infuse more money from my day job into it over the years to buy more land? Any ideas would be greatly appreciated!

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    You’re “working hard in private practice” and you want to own a farm. sounds to me it could become an expensive hobby/hassle.. a good indexer, indexes more.

     

     

    #229511 Reply
    Liked by Jack_Sparrow
    Avatar ScubaV 
    Participant
    Status: Physician
    Posts: 21
    Joined: 04/23/2018

    The parents of a friend of mine own some forested land near a small lake.  They built a cabin and dock and maintain a small yard area and visit regularly.  I know they have issues with random hunters illegally trespassing on the land and I wouldn’t be surprised if drug activity is a concern as well.  Maybe farms are better in this respect due to having more open space, but owning land sounds like just as much of a management headache as owning and renting a house.  Probably more dangerous too if you run into trespassing hunters or secretive druggies while going about your business.  And what happens if the cops bust a meth lab on your land that you didn’t even know about?

    For investments, I’ll stick to index funds.  For a hobby, whatever floats your boat.

    #229530 Reply
    fatlittlepig fatlittlepig 
    Participant
    Status: Physician
    Posts: 874
    Joined: 01/26/2017

    i would think about what you are trying to accomplish.

    is it an investment? (if it is, it doesn’t sound like a very good one)

    is it for your own leisure? (sounds like it would be a lot of work)

    sounds like something that sounds in good in theory only.

     

    #229536 Reply
    Avatar Veritas 
    Participant
    Status: Physician
    Posts: 11
    Joined: 06/27/2019

    Besides passive investing such as indexing, CDs, and a few others most investing in real estate takes some work and hussle.  I would rather have my tenant be a farmer who I understand the general culture and mindset behind than dealing with single family housing and deciding to let pets in or not.  Its the mentality of “invest in what you know.”  Remember my parents and my in-laws are full time farmers I have been around this stuff before, they just happen to live 7 hrs away.  I am just exploring being a landlord close to where I live.  Still wanting to have some education on thoughts if LLC vs no LLC would have any advantages.

    #229544 Reply
    Avatar Bubbadog 
    Participant
    Status: Physician
    Posts: 16
    Joined: 06/06/2019

    I have owned farmland for twenty years and never regretted it. I am 52 and I purchased it right out of residency. Probably not the greatest ROI but the intangibles are worth it to me. It only represents about 10% of our net worth. I cash rent the tillable acreage and have no real work to do on the property. I have rented to the same farmer for the last 15 years. In all likelihood, it will probably be inherited by my children one day. I get the OP’s motivation. If you grew up in the country, you might understand.

    #229563 Reply

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