What is the cost to get it back? It's easy IF there is a neighbor that can graze it, it's easy IF there is somebody willing to cut hay. But if you start buying tractors and hay equipment, if you start buying cows, feed, hay, pens, etc. what's the difference in cost of production compared to tax savings. I'm not stating do,either one, I'm saying do your homework on it. It's all easy until it's not.

I do like the wildlife exemption if already on ag, but would talk with local biologist to know what you needed to do year to year to keep exemption.

If you need a well, that's about 10k plus whatever you have to pay for electricity or get juice to the well

BQ_90 said:

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What is the cost to get it back? It's easy IF there is a neighbor that can graze it, it's easy IF there is somebody willing to cut hay. But if you start buying tractors and hay equipment, if you start buying cows, feed, hay, pens, etc. what's the difference in cost of production compared to tax savings. I'm not stating do,either one, I'm saying do your homework on it. It's all easy until it's not.

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I agree if you have someone that wants to lease it for this use or maybe someone already is and keep that person. And yes I understand where you are coming from if they will be doing all this stuff themselves it will cut heavily into that savings perceived

Lots of people around me are members in some kind of wildlife coop, which I assume helps get them that exemption.

FIDO 96 said:

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I buy land for my occupation, albeit for development, not consumption. That said, we regularly pay someone to cut hay or graze, just to keep the ag exemption.

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Fido,

That's a promising idea. Even though I've had a guy running cows on 150 acres in exchange for 'maintaining' the property, I realize that he could up and go at any time, and with the price runup on land in the past 10 years or so, losing that Ag valuation + the rollback taxes would be a serious hit.


May I ask a couple things on how you handle this?

1. Where do you typically locate folks to cut hay or graze, and how are you screening them?

2. What are you having to pay per year per acre, either to cut hay or to run cows?

3. Is your G/L policy covering their operations, or are you requiring them to add you as a named insured on their policies?

I ask that last question because there are quite a few operators that I've talked to who look at me like I'm from Mars when I ask them if they have a G/L policy.

Thanks.

1. The easiest person we can get to "lease" our land is the former land owner. I've also used our SWPPP maintence companies who "knew" a guy who could cut and bale hay.

2. I just leased 50 acres in Allen to a guy we paid $5k for him to cut and bale hay. He's also charging the same for a 20 acre site next to us.

3. We require them to be set up with a vendor and name us as AI. In the case of the friend of our SWPPP company, we actually paid him via the vendor, they in effect subbed it out. For the original landowner, we drew up a simple release whereas he couldn't come back to us for his own negligence, etc.

I have seen and heard comments people make about what they refuse to do when buying land such as "I don't buy land without mineral rights" or "my family doesn't pay more than X for land". In my opinion, I would evaluate every land purchase opportunity with a view of the market in the area you are buying. People that make those comments are probably saying them because when their grand fathers or great grandfathers where buying land, they could have those parameters and still be able to accumulate (sometimes vast) amounts of land. In the 1940's up through the 1970/1980's, there was a much smaller population of the public that had the resources to buy property so land was much cheaper (even when adjusted for inflation) and if the land didn't already have oil/gas production on it the land owners would usually sell the minerals with the surface.

Unfortunately, that is not the market today and that is especially true in high-demand areas that you are considering. Hell, farmland in Wharton/Matagorda counties generally starts at around $3,500/acre for the surface only and if it has a tree on it, the price just goes up from there.

There's nothing better than owning some land, having a vision for it and then making it happen over a period of time. With an ag exemption in place, there is not another investment into a real asset with a lower carrying cost. Taxes and insurance on a weekend home or the capital gains taxes on stock appreciation all point towards buying raw land and making something of it.

Fido,

Man, thanks for taking the time to pass along your experience. I appreciate that very much.

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2. I just leased 50 acres in Allen to a guy we paid $5k for him to cut and bale hay. He's also charging the same for a 20 acre site next to us.

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That Allen property is some top shelf stuff. I'll bet it sells by the square inch rather than the square foot! ;-)