How to buy the farm[edit | edit source]
Before the purchase of the land for a home in the country, some consideration ought to be given to probable increase in land values.
Even if you are primarily interested in your early sales of produce,you will not object to reaping an additional profit from the presence of other people.
Inasmuch as density of population determines land values, it follows that vacant land near a large city at $100 per acre may be cheaper than similar land at a distance would be at $10 per acre. If you buy real estate, you become a silent partner who does nothing, but takes most of the profits of the business of others.
Some persons see so clearly that money is often easily gotten by investing in land, that sometimes they make mistakes, in trying to get in. It is as easy to be a lamb in the real estate market as it is in the stock market.
Foresight, judgment, and experience or luck are essential to success in real estate dealing, but help, at least in keeping out of danger,may be had by following a few simple rules, if one can command a little capital, borrowed or owned.
The following points, suggested by a professional land shark, will certainly be of interest and possibly of profit to the intending buyer. I believe myself that they contain the whole philosophy of land speculation.
For a sure profit buy low-priced land, keeping as near the "raw material" as possible; high-priced property is risky and expensive to carry. An acre which costs one or two hundred dollars, or ten dollars per lot, will cost but six to twelve dollars per year to carry and half a dollar for taxes, and if a stable does come next you, why, you can sell your land for a blacksmith shop.
Besides this, a ten-dollar lot, if restricted for residence or available for business, often advances to $100 in a year; one good house which some one else built near it may raise its value that much.
If the land _is _high priced, see that there is some kind of a building on it; even a shanty will usually bring in enough or save you enough by its use to pay the taxes; so you will have that working for you whilst you are away.
If possible, buy at auction and of reputable people who are not boomers, or at least buy at forced sale; that is how real estate is sold when it must be sold. Choose lots level with the curb and on high ground, lest the expense of grading and sewering eat up your profit.
Keep in mind that in buying land for speculation one really buys the opportunity to tax other people, by taking part of their earnings in the shape of rent or price. Do not then be deluded by boom schemes in inaccessible or desolate places; choose rather that land which in the natural course of events others must have in order to work or to live.
Home buying in small communities is safer than in the outskirts of a large city, because public improvements are much less costly. If you put $500 in a $5000 home and carry the balance on mortgage, an assessment of $1000 for streets or sewers, which helps the vacant lots, will probably put you out of business. Whether for use or speculation, buy in an established neighborhood or where the circumstances and neighbors are such that restrictions or expenditures will make its character sure. The increase in your land value depends first upon the presence, then upon the efforts, of others; it is by their labor you hope to profit.
Therefore, buy property on leading thoroughfares; except in a very small section devoted to the residence of millionaires, the price of residence property has a limit; even there the merest accident or the whim of fashion may destroy the value, but there is no telling what figure business property may reach.
Do not build unless you have to. It is rare that a building pays five per cent net on the value of the land and the cost of the house. "Who buys a house already wrought, gets many a brick and nail for naught." If, however, you can get a piece of ground in a growing neighborhood and live on it till you can sell at an advance, that is the safest, and surest of investments. It delivers you from the power of the landlord.
Lastly--in real estate--don't bite off more than you can chew.
Most of these rules apply to the purchase of suburban land. In farm buying, keep as close to your market as you can. See that railway facilities are all right; get land likely to be needed for other purposes. The best way to begin is by securing all information possible from state agricultural departments. Write to the industrial agents of important railroads traversing the section in which you want to locate. They have detailed information regarding land, markets, social conditions, etc.; get from the United States Agricultural Department a map showing the soil survey of the section of your choice. It must be borne in mind that personal aid is not to be expected from State Agricultural Departments, Bureaus of Immigration, railway companies, or any public agency.
From the big farm agencies run for profit you can get lists of thousands of properties for sale. Some State Agricultural Departments cooperate with real estate men in their own states, by referring inquiries for farms to them. Some states issue from time to time lists of "abandoned farms," but these change so constantly that they help but little except in the way of suggestion.
When you start farm-hunting take along a good map. Then you will know a few things on your own account. Verify railroad maps and "facts," as they are often biased. Don't waste your time wandering around a strange locality by yourself. The local real estate man knows more about his community than you can learn in five years. In trying to find out things for yourself you will waste in aimless journeys, undertaken in ignorance of real conditions, more time and money than a real estate man's commission amounts to.
The only way to form a correct idea of the production of any given section is to examine a particular farm in detail. Within well-recognized limits, all tile farms thereabouts will be found of similar character. Before spending money to look at land, learn all you can by correspondence. Whether it is more profitable in the long run to buy that good plot of land in a high state of cultivation with good buildings on it, at a high price, than to buy this exhausted piece of land with poor buildings or none at all, is a question for the individual to decide. It depends on your energy,grit, age, and how much money you have. It is much easier to take advantage of what the other fellow has done, than it is to build from the stump. You must bear in mind, however, that well kept land in a high state of cultivation seldom goes begging in the market. On the whole, if you have the capital to do it, you can make the biggest wages by buying rough or neglected land, and hewing it into shape.
If you have a knowledge of soils, you may be able to find land that will grow something that no one supposes it will grow. This will be particularly useful in the case of land thought to be valueless. The lands about Miles, Michigan, were considered sterile until some one found out that they would grow mint, a valuable crop, which made the land salable at high prices.
Get hold of a desirable bit of the earth. All that men wear or eat or use; everything--shelter, food, tools, and toys comes from the land by labor. Even the capital used to make more of those things is taken from the land. The employer and the capitalist are, at bottom,only men who control the land or its products, who own rights of way, mining rights, or the fee of valuable lands. Thousands have "made" money by finding unexpected products in their land or of their lands, oil, coal, mineral, plants; thousands more because their land was needed by some one else, and they were paid to get out of the way.
To speculate on these chances is risky business; to keep land that enables you to make good pay while you wait, is profitable.