5 Ways Your Hunting Property Can Pay for Itself

How Have You Used Your Land to Create More Income?

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Cash Rent for Agriculture

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1 | Cash Rent for Agriculture

The first and potentially most common on this list (these days) is cash rent. Although grain prices have dropped from their record highs a few years ago, you can still rake in a pretty penny by leasing out to grain farmers. You can also lease it out to livestock farmers. Tom James, a Whitetail Properties land agent serving east-central Indiana, knows land. And he knows how to make money off of it.

“Choosing a property that offers potential income from the land's agricultural potential is a fantastic way to derive some return on investment,” James said. “What's nice for us recreational (hunting) land buyers is that we also can have ready-made food sources for our property's wildlife and be paid for it in the process.

“In the corn- and soybean-rich Midwest, this can be a home-run relationship with cash rents trending with commodity market values, land prices and local competition among farmers to gather more tillable acres for production,” James continued. “Although prices have dropped over the last two growing seasons, some of the most fertile corn-belt soils have rented as high as 350 to 400 dollars per acre. However, many of the smaller, harder access, possibly poorer soil land that tends to be associated with great hunting tracts will likely end up between $150 to 225 per acre. Regardless, this annual rent check from your farmer can at the very least offset property tax liabilities, pay several months of mortgage payments or fund other land improvement projects.”

It’s important to analyze your property and gauge its cash-rent value. Some properties will garner more. Others will garner less. But if there is tillable ground available, it’s crazy not to make money off of it.

“Whether you are prospecting a farm with tillable or even rent-worthy pasture ground, take the time to run some numbers to see what that return might look like,” James concluded. “Too little tillable may not provide much income, and [there might] not be enough food-producing acreage. The recreation and hunting opportunities may be limited along with much of your capital being tied up in production acres, not prime hunting habitat.”

In other words, every situation will be different. Find what's right for you.

Photo credit: Shutterstock

Whitetail Properties Land Agent: Tom James

Serving East Central Indiana

Direct: (317) 752-5781

tom.james@whitetailproperties.com

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Harvest Your Timber

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2 | Harvest Your Timber

Timber is another common method of making money off of a property. And it’s often the most lucrative option for landowners, too. Brad Farris, a Whitetail Properties land agent serving west-central Mississippi, knows this all too well.

“In the Southeast, US timber values are a big deal for recreational landowners,” Farris said. “Many times, that is the main source for returns on a landowner’s investment and if done responsibly, it is the most important thing I feel can happen to get the most out of the recreational value from the animals’ standpoint.

“Planting high-quality foods is on everyone's list these days, but one of the things you don't hear much about is cover,” Farris continued. “To me, that is by far more important to holding, protecting and creating a top-end recreational tract than lots of food with no holding areas for your deer or nesting habitat for the turkeys. This needs to be done in stages to help with your long-term cash flow and to maximize the cover opportunities on your property. Stay two years ahead of canopy closures (when your browse is shaded out and dies off). Once cut, in most cases, it takes two years for the cut areas to thicken up after the sun begins hitting the ground again.”

You can do this up front and/or long-term. That’s the beauty of timber — it keeps growing. Most landowners cut their timber every 15 to 20 years. Check to see when the timber was harvested last before you purchase a tract of land.

“I do recommend using a registered forester to work with so your stand is not high-graded on the front end and all you're left with is your low-quality timber that will take many years to grow back,” Farris said. “Make a solid plan and spread your timber cuts out that best suits your goals and keeps your property healthy and fun.”

Photo credit: Shutterstock/K Letr.

Whitetail Properties Land Agent: Brad Farris

Serving West Central Mississippi

Direct: (601) 506-1304

brad.farris@whitetailproperties.com

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Utilize or Sell the Mineral Rights

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3 | Utilize or Sell the Mineral Rights

I’ll admit this one is a little trickier with a lot more to it. But with a little homework and a little luck, you could tap into your very own gold mine. Jeff Heil, a land agent serving southwest Illinois and eastern Missouri, has had some experience with this.

“All land has underground and mineral rights attached to them,” Heil said. “In the area I work in southeastern Missouri, the only properties with mineral rights of a high value are properties with quality limestone deposits that are close to a lime plant, cement plant, or rock quarry, and areas rich in silica sand which has become very popular over the last 10 years. The demand for it has risen due to the new technologies in Fracking.

“The landowners in these areas have oftentimes been able to sell their underground rights for a very nice profit (around $1,000 per acre),” Heil continued. “Sometimes they are sold directly to the company for a lump sum or they may be paid on a per-ton basis as they are removed.”

Jeff also works in southern Illinois. The mineral rights story is a completely different read in that part of the country.

“In this area, it seems most of the mineral rights were purchased in the last century by either coal companies or gas and oil companies,” Heil said. “It is very common to have properties have separate owners on the surface and underground. The property owners that own both surface and underground rights will usually get a premium price if they sell their property. If a buyer purchases a property that has the underground rights attached there is always a chance that sometime in the future, there will be an opportunity to sell those underground rights. I do know some landowners that have oil reserves under their land and they have worked out deals with drilling companies. These companies will lease drilling rights for a period of years from a landowner in an area that may have oil. If the drilling company finds oil during their exploration, then they will be able to put in a well and the landowner will get the royalties off of every 8th barrel of oil.”

The moral of the story? Purchase land with mineral rights if you can. If you can’t, it isn’t a deal-breaker. But it’s best to keep your options open until you’re certain of the property you want to purchase.

“If you have an opportunity to purchase a farm that has mineral rights versus one that does not, everything else being the same, then you definitely want the farm with the underground rights,” Heil said. “Even if these underground rights do not have much value at the present time, we don’t know what the future holds. As technology improves, the minerals in the ground that are currently too expensive to remove may become more relevant.”

Photo credit: Shutterstock/Olaf Ludwig

Whitetail Properties Land Agent: Jeff Heil

Serving Southwest Illinois and Eastern Missouri

Direct: (573)-880-6150

jeff.heil@whitetailproperties.com

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Lease to Other Hunters to Offset Costs

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4 | Lease to Other Hunters to Offset Costs

Leasing your land to other hunters might defeat the purpose of why you bought it. But if you need the extra cash, it might be a viable option. Another idea is to lease it out for species or seasons that you aren’t interested in hunting for. Derek Fisher of Whitetail Properties explains this in more detail.

“Hunting leases can provide landowners extra income each year,” Fisher said. “Depending on the size of the tract, the income can often cover your annual land taxes and other expenses. Depending on upbringing and experiences, some are more passionate for deer, some for turkeys and yet some for small game. A landowner only interested in deer may only care about control over their grounds during the months of October and November. That leaves 10 other months of potential income through other hunting leases.

“With the typical lease rate of $8 to 20 per acre (depending on how developed the land is), a landowner can multiply his or her acreage by that price to get their income potential. For example, a landowner with 100 acres could get anywhere from $800 to 2,000 annually for small game and/or turkey hunting. That would more than cover land taxes as well as some improvements to the land itself (food plots, bush hogging, trail development, etc).”

Leasing land is a surefire way to increase the annual income from your property. Consider it when creating your plan for paying for your hunting property.

Photo credit: Shutterstock/Sascha Burkard

Whitetail Properties Land Agent: Derek Fisher

Serving South Central Kentucky

Direct: (270) 925-3350

derek.fisher@whitetailproperties.com

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Parcel Larger Properties into Smaller Tracts

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5 | Parcel Larger Properties into Smaller Tracts

The fifth and final way to make a property pay for itself is to divide it into tracts and sell off the less desirable ones. Use that income to pay for the best tract for hunting. Kirk Gilbert, a land broker serving Ohio, Illinois and Pennsylvania, definitely understands this method.

“There are several factors to consider when splitting a large property into several different tracts,” Gilbert said. “For example, access, topography, current market/commodity prices, highest and best use, property shape, utilities availability and regional variations are all important.

“The first thing a landowner should look at is “highest and best use,” Gilbert continued. “The Appraisal Institute defines “highest and best use” as ‘The reasonable probably and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value.’ An example of this would be selling five- to 10-acre tracts on the road frontage for home sites. If permitted by the county, landowners can sell these tracts for a high price per acre, especially if utilities exist. Other examples would be splitting the timber acreage from the farm/production ground or splitting a residence into a smaller parcel off of the parent tract.”

This might not be the right method for everyone. But it will be for some. Consider it if you buy land, especially when purchasing larger tracts.

“It’s all about supply and demand,” Gilbert said. “When you split a property it allows the landowner to reach more buyers in different price ranges. This breeds competition and drives up the price. Again, there are several factors to consider, and I encourage anyone thinking of splitting their property to consult one of our land specialists in that area to see what the best options are.”

Photo credit: Shutterstock/Matt Hayward

Whitetail Properties Broker: Kirk Gilbert

Serving Ohio, Illinois and Pennsylvania

Direct: (217) 577-3699

kirk.gilbert@whitetailproperties.com

Editor's Note: This was originally published May 4, 2017.

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Owning land to hunt on. It’s the American hunter's dream. And sadly, it’s common belief that dream is out of reach. It isn’t. It can be achieved. And with the help of our good friends from Whitetail Properties, we’re here to tell you how and why.