Investing in land is becoming increasingly popular, and for good reason! While we encourage you to work with a broker like us here at Hansen, it can help if you have a sense of what type of land you might want to invest in. Not everybody who invests in land comes from a rural area or a planning background, nor do you need to, because we’ve written your demystifying guide to land types!
Probably the easiest type to wrap your head around. Farmland is used to grow various types of crops and livestock. Did you know that nearly 40% of all Canadian farmland is leased? By buying farmland you can lease it to a farmer and make it easier for them to get into the market. Buying land is a prohibitive startup cost for many young farmers, and leasing allows them to expand their business for less risk. Farmland offers a diverse set of possibilities, depending on the soil and climate. Using a broker will help to unravel some of the more complicated legalities like water, timber, and mineral rights that may or may not be associated with a particular parcel. Farmland makes a great investment as it almost always increases in value – a side effect of increased population, expanding cities, and more demand for food production.
Ranches, technically speaking, are a type of large farm. Ranches tend to be located where traditional crops may not do as well, such as in the southern foothills of Alberta. This land is spacious, open, and semi-arid, making it the perfect space to spread out and let the cattle roam! Cows are commonly raised on a ranch, although ranches may include other livestock as well such as sheep. If you’re an animal lover, consider investing in ranch land and helping a young farmer access this precious resource by leasing to them!
All of the land you’re considering buying is investment land, of course. That simply means you’re buying the land hoping to turn a profit on it in the long term. When you buy vacant land, the possibilities are endless. You might hang on to it and sell or lease to a farmer who is willing to develop it into a viable farm; or, you may examine whether it’s suitable for building and sell it to a developer looking to build residential, industrial, or commercial properties. If you’re looking to sell for development, you’ll need some extra care to ensure that it’s both viable and desirable for building.
When you’re looking to sell some land to a developer for a profit, you’ll need to ask yourself first, second, and third if the location is good. Is it near a booming city? Next to a beautiful and popular recreation or nature area? Is it close to where people may want to live, with transportation links (roads, busses, or otherwise), shops, restaurants, etc.? You don’t have to develop the land yourself, but if you want to sell to a developer, you’ll need to be sure it’s an attractive parcel (or will be soon). Don’t forget, you’ll need to be sure that there are the necessary planning permissions – if you purchase a piece of land for development and only then discover there’s a conservation easement on the spot, you’ll be in for a surprise!
When you work with a land broker, you can count on our expertise in the type of land which we specialize in. We help to make it easy to get into the land investment game and get a great return on your dollar! Remember, they’re not making any more land, so it’s a sure-fire investment you can stand firm on.