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A Project Oriented Approach to Buying and Selling Land Based Assets

Alberta Land 101

Alberta Land 101 - Hansen Land Co - Alberta Land Brokers

Now a solid month into 2018 and with New Year’s resolutions still hot on our tongues, it might be time to think about investing in your family and your future by purchasing a piece of land. But before you start Googling “land for sale”, there are a few things you need to know first. For example, there are many different types of land meant for a variety of distinctive purposes.

Farm Land

Farm land is essentially any land that can be cultivated or that is capable of cultivation, meaning that  it is suitable for farming and producing crops. If the soil can be sown, it’s considered farm land. Farm land falls under the wider category of agricultural land, which includes any land considered to be arable. Generally speaking, farmland is used primarily for the production of crops, either for livestock or human consumption. Farm land also comes in the forms of permanent cropland, meaning the land doesn’t need to be replanted annually, or permanent pastures, which are grasslands used mainly for grazing livestock. However, land meant exclusively for livestock has a different name.

Ranch Land

Where farm land is meant for crop production, ranch land covers the practice of ranching livestock. Ranches are usually comprised of generous stretches of land meant for grazing and raising large animals. Here in Alberta, ranches are typically used to raise cattle, though elk and bison ranches can be found in rural parts of the province. Often associated with the “Wild West,” ranches can be turned into tourist destinations that cater entirely to the guests rather than being working ranches. These are usually called guest ranches, or “dude ranches,” and offer activities like horseback tours, guided hunting or cattle drives. But when used primarily for raising livestock, ranch land is considered working landm and Alberta is known for its vast cattle ranches.

Development Land

Moving into more suburban areas, development land is typically any land that is being converted for the purpose of real estate development. The landscape is altered to suit the needs of the development, whether it is being used for housing, subdividing into lots, or factory production. This type of land is intended for urban purposes and is used for the construction of housing and other forms of development within city limits.

Investment Land

Real estate property bought with the intention of earning a return on the investment is considered investment land. This can look like income through renting the land, future reselling, flipping or remodelling the land, or all of the above. Whether the land was purchased as a long-term or short-term investment, the value of the land is directly related to what the owner intends to do with it. The idea behind investment land is to earn the highest rate of return and develop the land to support this outcome.

Commercial Land

Lastly, any land that is being used for business related activities is considered commercial land. This involves office buildings, grocery stores, restaurants, industrial shops, malls and large residential properties, such as apartment complexes, to name a few. The initial investment when purchasing commercial land is much steeper than real estate intended for residential purposes, but the returns are also much higher.

Any of these types of land are considered an investment; it just depends on where your passion lies. Before you consider taking the leap and buying a piece of land, give us a call. We’d be happy to help you!