Kentucky’s real estate market is rapidly changing as people around the globe awaken to the incredible opportunities here in the Bluegrass region. Many picture the state’s iconic horse farms when they think about Kentucky land, however, Kentucky’s diverse geography makes it a haven for many agricultural and outdoor pursuits. From livestock farmers to fishermen and hunters, there’s a perfect piece of land for everyone. Learn more about Kentucky.
Investing in land is an exhilarating venture, but it can certainly become overwhelming when you are faced with its unique criteria and considerations. Before you get started on your land journey, take a look at these five insights to set yourself up for success:
Tip 1: Openness Is Key
Land real estate is about how your finances, your goals, and your feelings intersect with the market in which you are buying. Openly sharing your vision of land ownership with your real estate agent is essential to making it a reality. A myriad of conditions may affect your agent’s guidance, so transparency helps ensure that they understand you.
Equally as important is entering the land purchase process with an openness to learning about the state of the local market, as well as its rules, geography, and available technologies to inform your decision-making. Tools such as mapping software, market platforms, and electronic document sharing can serve as great aids in realizing your vision.
Learning how to use the tools available will help you understand some of the conditions at play as well as help you move toward your goal with efficiency and purpose.
Additional Resource: How to Use a Digital Map | Topography Lines, Key Features, and More
Tip 2: Work With a Land Specialist
Working with a Land Specialist can translate into substantial financial benefits. A real estate agent with a land specialization has the knowledge and skill to analyze land for its highest and best use. “Highest and best use” is a phrase that refers to the most advantageous and feasible use of a property that is legally permissible, physically possible, financially feasible, and maximally productive. It represents the use that will yield the highest value for the property, considering both present and future circumstances.
Too often, inexperienced agents list land and miss critical factors that influence a property’s highest and best use. These oversights can be costly for sellers and simultaneously extraordinary opportunities for discerning buyers working with an expert in the field. Additionally, a Land Specialist possesses a good understanding of the tax advantages your land ownership can afford you.
Additional Resources:
Farmland in Kentucky
What Is It Like Owning Land in Kentucky?
Tip 3: Process Influences Outcome
Success is achieved through a well-crafted plan of elements within our control. As you add more cooks to the kitchen – be they financing professionals, county officials, sellers, listing agents, title companies, and more – the potential for chaos and challenges quickly arises. Therefore, it becomes crucial to proactively manage what you can control from the start.
You can expect the process to look something like this:
- Solidify your budget with a pre-approval. Or, if you are buying land with cash, talk with your accountants, financial planners, and/or wealth managers. It is imperative that you understand how your concept of an ideal budget works with the realities of your financial plan or liquidating some or all of the various investments you may have (withdrawal penalties, tax liabilities, how liquidating may affect your future financial models, etc.).
- Search for land within your budget. Evaluate the merits of that land against your vision. Tour the land that makes sense for your vision.
- Negotiate a deal on your dream property.
- Inspect the property according to your needs and hire an attorney for a title search.
- Close.
Steps IV and V are where the kitchen gets hot. But you’ll be able to handle the inevitable heat when all the other steps are in place and you have properly prepared for this process.
Tip 4: Yes, There Are Loans for Land!
Agriculture, homebuilding, and recreation represent the most common uses of land for the general public. As such, there are land loans for farming, building a home, and undeveloped acreage that you want to use for hunting, fishing, hiking, or camping.
Additional Resources:
Land Financing
Financing Land Purchases (Video Series)
Tip 5: Highest and Best Use Is Value
There are many factors to consider when determining a property’s highest and best use. These considerations vary by a property’s location, topography, natural resources, and more. With all that said, a property’s highest and best use may not always be in line with your intended use. It’s important to understand that this dynamic works on a spectrum: not in your favor, competitive, and in your favor.
Not In Your Favor: A property that seems expensive but in reality is priced for a use that exceeds the market value for sold properties with your intended use.
Competitive: A property is priced competitively when compared with properties of the same highest and best use that have sold.
In your favor: The highest and best use of a property has been overlooked by the seller and listing agent and is effectively underpriced.
It Doesn’t End Here
Buying and selling land is a robust topic within the real estate world, and there’s much more to learn! Dig into the details with Christie’s International Real Estate Bluegrass agent Stephen J B Davis by exploring his website.
Stay up to date with news, educational information, and current listings by following Stephen on YouTube, Instagram, Facebook, and LinkedIn.
About the Author
Stephen is an avid outdoorsman and hunter. He loves college sports, traveling, managing his 13-acre homestead, drinking good bourbon, and spending time with his family and friends. Stephen also enjoys volunteering his time and resources to help causes surrounding the outdoors, land conservation, and education. He serves on the Board of Directors for Bluegrass Land Conservancy and Realtors Land Institute.
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About Us
At Christie’s International Real Estate Bluegrass, we believe that luxury describes an experience. With Central Kentucky’s best REALTORS® and a powerful global platform that offers world-class marketing, industry-leading technology, and international reach, the firm is focused on providing the highest level of service and professionalism to clients at every price point. Celebrating all that the Bluegrass State has to offer, we are excited to speak to you about our full range of services and more. Luxury Lives Here.
