The future homestead: we can afford it!

[diana_of_the_dunes]

I've been sitting home sick for the past few days agonizing over how to afford our dream property.  Thinking of alternative housing, whether or not it's logical to try to build it ourselves, etc.  We're still not ready to sell our current home, so that was an issue as well.  And then this morning I put the numbers into a mortgage calcluator... and realized we can afford to buy the land right now, on a 15 year mortgage.  

I'm sort of in shock.

Land here rents for about $200 an acre/year for farming.  We could rent out the 8 or 9 tillable acres on the portion that we'd be buying, possibly to the seller, and bring in about half of our yearly payment.  But we could afford it even without that.  I knew there was a reason we wanted to be debt-free... LOL.

Why didn't this occur to me before?!

[brighteyed]

Just curious, how do you find land that is available for rent?  I have done google searches and all that turns up is commercial land for rent, not agricultural land.

[crazyms]

That's awesome! We are buying our land right now too and it's going to take a lot of work before it's really a 'homestead'. The land has to be developed and we have to put in housing and buildings etc. Right now we're still paying on it but we're finally putting our property up for sale and I think it may actually sell pretty quickly. Once it's sold we'll be able to pay off our property and really get started on fixing it up. Congrats on being able to get the property!

[simplyc]

Congrats!

I'm also curious where you found land for rent.

I've been crunching numbers to see how much we would need to buy our raw land and add a cheap trailer, but I don't think me and Dh would qualify for a mortgage since we don't have a steady or high income.  We actually would prefer to be debt free anyway and think we could save for everything in a year or two.

If not...well I don't know if I can wait that long!  I may have to call the bank

[Linzie2]

I think she's saying she would rent out some of the land to help make her payments??  Is that right Diana?

Anyway, CONGRATS!

[diana_of_the_dunes]

Originally Posted by brighteyed 

Just curious, how do you find land that is available for rent?  I have done google searches and all that turns up is commercial land for rent, not agricultural land.

Hmmm....  I have no idea.  I have a friend who rents his out to a farmer, but the farmer was already farming the land when he bought it.  Maybe classifieds?  Post an ad on craigslist?  I just did a CL search and turned up a couple farmers in our area looking for land, but no land looking for farmers.  If there's a piece of property you had in mind, you could always find the owner through the tax records and contact him/her directly to see if they'd like to lease to you.

Originally Posted by crazyms 

That's awesome! We are buying our land right now too and it's going to take a lot of work before it's really a 'homestead'. The land has to be developed and we have to put in housing and buildings etc. Right now we're still paying on it but we're finally putting our property up for sale and I think it may actually sell pretty quickly. Once it's sold we'll be able to pay off our property and really get started on fixing it up. Congrats on being able to get the property!

The piece we are looking at is vacant land as well.  There is an unfinished pole barn on it, but it has trees growing out of the framing.  Still structurally sound, but needs some work to get it all patched up and weather-tight.  That would be our first order of business.  Then we'd start looking for salvage windows, doors, cabinets, and flooring that we could use when we build and keep it in the barn until we're ready.

I'm so nervous.  We aren't 100% certain that we're going to move forward right now, but just the idea that we could... I don't know.  All of this has been an idea in my head for "someday" for so long that I think I'm just now starting to realize it can really happen.  I'm especially worried about building a house. We can start small by putting in a well, septic, and maybe even the foundation with cash while we're still living in our current house.  But actually building a house seems very intimidating to me.  It's so much more simple to buy a "pre-built" house; then you know exactly what you are getting.  Building your own, planning it from scratch, is this huge leap of faith.  I'm worried it won't turn out like the idea in my head, and then DH and I will both be unhappy.  Or we'll only get partway done before we hit our max cost, and we'll have to live in an unfinished shack.  Even though the practical side of me says that we won't let something like that happen, since we're already planning costs to ensure we won't get in over our heads and we can afford what we want, I still worry.  I have a hard time looking at a patch of cornfield and woods and really, truly seeing a pasture full of cows and our cozy cabin.  You know?

[diana_of_the_dunes]

Quote:

Originally Posted by Linzie2 

I think she's saying she would rent out some of the land to help make her payments??  Is that right Diana?

Anyway, CONGRATS!

Yes, that's correct.  We can swing the payments even if it's not rented to a farmer, but the extra $1500 - $2000 per year sure wouldn't hurt us any!  The only downside to that plan is that it would push back the establishment of pasture grasses.  Last year, and for many before that, the land has been conventionally farmed with either corn or soy.  I'd like to let the land heal from the chemical fertilizers it's been dosed with for the past who-knows-how-long, but the bit of extra cash it brings in would help us finish our current house that much sooner.  DH and I need to have a long talk.

[Linzie2]

Originally Posted by diana_of_the_dunes 

I'm so nervous.  We aren't 100% certain that we're going to move forward right now, but just the idea that we could... I don't know.  All of this has been an idea in my head for "someday" for so long that I think I'm just now starting to realize it can really happen.  I'm especially worried about building a house. We can start small by putting in a well, septic, and maybe even the foundation with cash while we're still living in our current house.  But actually building a house seems very intimidating to me.  It's so much more simple to buy a "pre-built" house; then you know exactly what you are getting.  Building your own, planning it from scratch, is this huge leap of faith.  I'm worried it won't turn out like the idea in my head, and then DH and I will both be unhappy.  Or we'll only get partway done before we hit our max cost, and we'll have to live in an unfinished shack.  Even though the practical side of me says that we won't let something like that happen, since we're already planning costs to ensure we won't get in over our heads and we can afford what we want, I still worry.  I have a hard time looking at a patch of cornfield and woods and really, truly seeing a pasture full of cows and our cozy cabin.  You know?

It is nervewracking to build your own.  And expensive.  But if you start small and pay cash to begin with, it feels much more do-able.  We did end up going to the bank for a loan, but it's a much, much smaller loan than what our total project cost is.  And if your that careful and conscientious you'll be fine.

PS: Use a good accountant when your in the building process....they know all the little returns that add up!

Again, good luck and keep us posted!!!

[diana_of_the_dunes]

I'm feeling a little dejected now.  We had a realtor over to the house today for a market analysis, and so he could help us decide where to put our money for the best return.  The good news is that we aren't quite upside-down on the house, but we can't sell it, pay realtor fees, and clear much of a profit.  Even if we spend some money fixing up the kitchen and bathroom, our return will be minimal.  It will help the house sell faster, but that's about it.  On paper, we're approaching 20% equity, but in our current market...  Not so much.  We never even had much of a real estate bubble here; our prices have remained pretty stable, but the market is saturated with foreclosures.  Prices are just all over the place, and there's no rhyme or reason to how much people seem to pay for certain pieces of property.

I was really hoping to have some cash from the sale in order to have extra to put into building the new home.  I've read a few articles about how there's supposed to be another housing downturn in 2011, and that makes me wonder if we'll ever be able to sell for what we owe, let alone for more than we oroginally paid.  All the more reason to keep saving money.  Thank God the property I want isn't officially for sale!

[diana_of_the_dunes]

After taking a few days to talk it over and get some perspecitve, we've decided on a plan.  For the next year, we'll put the amount we would have spent on the new property payment into an account.  This will accomplish 2 things: 1) we'll insure that we can truly afford it and the payments won't be a hardship, and 2) at the end of the year, we'll have our down payment all saved up.  Since the property isn't on the market, I don't see anyone grabbing it.  And if they do, I suppose it wasn't meant to be (though I really hope it is!!).

We're also going to make an effort to finsh up the renovations on our current home.  I'm really worried that the housing market is going to go into another downswing this year, and it's far from an ideal time to sell.  But by getting everything wrapped up, we'll be that much closer to our goal of putting the house on the market.  If nothing else, we'll be happier living here.  There are projects we've wanted to tackle since moving in that we still haven't gotten to.  This is the year.  No more building sheds and chicken coops; this is the year of the house project!  Now it just needs to warm up so I can start putting DS's naptime to good use refinishing woodwork!

[Arduinna]

My biggest concern with planning on renting out your land for commercial farming is how much control over it's use will you have? Are you going to end up with land that is laden with pesticides ect?

[diana_of_the_dunes]

Unfortunately, the land is already being conventionally farmed (or at least the part that isn't wooded is).   If I were to rent it out, I would probably try to rent it to a hay farmer.  Around here, pesticides are rarely used on hay fields.  Or, I could hire someone to plant it to pasture and offer them part or all of the hay as payment.  That would serve my ends, and after 3 years of no pesticide use, I could have it certified organic.  Once we are ready to buy cattle, the pasture would be all set.