A Great Time of Year to Walk Your Land…
“Write what you know.” This sentence from Mark Twain comes from the Adventures of Tom Sawyer/Adventures of Huckleberry Finn. Based on this advice I should stop now. However, since my Director of Marketing suggested I complete a Blog post this week you are going to suffer through this process with me as I attempt to offer some perspective about the current land market on the Eastern Shore. In the spirit of Mr. Twain, one thing I know is this is my favorite time of the year, and for most landowners it is the best time of year to get out and walk the property you own or look at additional land being considered for acquisition.
Recently I was reminded how important bug spray can be in early September walking through a timber tract as I am only now starting to get rid of several hundred chigger bites. I agree this comes with the territory but now as the weather cools, I am looking forward to the first good frost that will neutralize those little buggers. This time of year can be good to walk your boundaries and check on your posted signs. This is good for everyone and helps keep hunters informed as to where the property boundaries are to help everyone be good stewards and respect private lands. A good walk around your land will additionally help you see what type of maintenance might be needed for downed trees on roads, or culverts that may have been damaged due to the spring and summer rains we experienced here in the Mid Atlantic. Maintenance of roads in large land tracts is one of the most important assets land can have and keeping road systems in working order will be critical to your own use and enjoyment but will yield positive returns in the long term value of the land.
In addition to land management it is important to review a range of topics as a landowner and last year I developed a check list that offers a number of details that are worthwhile to review. I think they serve as a good tool each year to review and I have provided them below.
1. Boundary Survey – When you buy or sell land knowing where boundaries are and their legal descriptions are significant. Many properties have almost ancient records on their boundaries and as property owners change around a piece of property or as management changes on adjacent lands, boundaries are sometimes mistakenly altered for new land uses. Over time these physical changes on the landscape can become difficult to correct on your property. Keeping accurate up to date surveys are important additionally for understanding what your true taxable landmass is and an accurate survey is the only way to verify the assessment record. Clearly, there is practical financial reason and long term management benefit to documenting the boundaries of what you own.
2. Forest Management plan – A forest management plan will assist in maintaining your agricultural land status for your forestland based property and it is important to verify it with your local assessment office to ensure this information is in place and your tax bill reflects this management status on the property.
3. Timber Resource Assessment – Evaluating the value of the timber on the property is also a valuable planning tool to have as you consider when to sell timber and take a return on your long term forest investments. Sound management of timber resources can be a strong part of any financial portfolio in mitigating against volatile swings in financial markets.
4. Zoning Update and Regulations – Staying informed of current zoning laws and local regulations can be critical in maintaining long term value in your property. As land use laws evolve, regulations are clearly moving towards more restrictive patterns in land use. Having the opportunity to make decisions with your land based on these changes can only occur if you remain informed of local, state, and federal land use regulations.
5. Conservation Plan – A plan can be developed by the local USDA office in your county and is a free service to landowners interested in learning about the myriad of conservation programs available for their land. The U.S. Farm Bill authorizes a wide array of incentive based programs focused on conserving soil health and natural resources on private land.
6. Soil Data and Maps – The Natural Resource Conservation Service offers a free website where you can outline a given property and obtain accurate soil information and a range of descriptive resources on the characteristics of the soil on your property. The website is www.websoilsurvey.nrcs.usda.gov/app/HomePage.htm.
7. Tax Maps and Natural Resource Data Layers – A website called MD Merlin offers a unique set of information for property owners including tax maps, wetland maps, hi-resolution aerial imagery from 2007-2008, topographic maps, watershed boundaries and even political boundaries.
8. Appraisal and Financial Records – When buying land the purchase price and initial appraisal are utilized for establishing the benchmark from which you measure future capital gains when a property is transferred. An accurate appraisal is important for tax purposes and maintaining strict financial records for costs and improvements to the property are critical in mitigating against future capital gains.
9. Estate Plan – Establish a plan for conveying land to heirs in order to minimize tax consequences. This is critical to maintaining ownership for land which has long history in a family with potentially high capital gain consequences. A sound strategy established through your tax or financial advisor is important to the transfer of your land legacy. Review your options with your accountant or a certified financial planner to review the scope of options for you and your family.
10. Insurance – Ensure insurance policies for current use and tenants on your land is adequate. Accidents happen and maintaining the proper type and amount of insurance could be invaluable if something unforeseen does occur. Specifically flood insurance is important to review as many times flood maps can indicate incorrectly the threat to structures on a property. This data is evolving as factors relating to sea level rise are being evaluated throughout coastal regions.
Today’s land market continues to be dynamic as the agricultural markets are reshaping themselves each day, and the jury is out as to how a sub $5 corn price will impact land values nationally, regionally and locally. As I have written before, I believe our land values on the Eastern Shore are only partially influenced by these agricultural markets and there are an array of factors surrounding transitions in land use that play an even more significant role than agricultural markets in land value to our region. Nonetheless, I look each day at the markets, as do many of you, and today Corn is up. So let’s focus on that and take a walk or ride around the property and enjoy the many things it offers well beyond the price per acre or bushel per acre that so often holds our attention. This is a great time of year to walk the land and that is something I know. Happy fall!