The pandemic changed the way a lot of people thought about their lives, their goals, and their careers. There’s a lot of flexibility in how we live because of the rapid rise in remote work, and people over the past two years have frequently moved out of cities and urban areas.
Some people are even opting for completely different lifestyles than what they’re used to. As part of that, you might even be considering moving to a farm, whether that’s something like a horse farm or a functional farm where you grow food and crops.
If farm life is something you’re considering, the following are six things to keep in mind before you buy a property or make a move.
1. Purpose
Before you buy a farm, you need to have a clear idea of what your purpose is going to be. What are you going to use the farm for? Is it going to be for residential use with some personal gardening added to the mix?
Will you have relatives living on your farm? Will you have livestock? Are you going to try and earn money from the land?
A lot of farms that make money are multipurpose, so they might sell a wide variety of items like eggs, hay, cattle, and fresh produce.
You need to know exactly what your goals are before you can decide on a piece of farm property.
2. Consider Working On a Farm
If you have no idea what it’s like to work on a farm, you might be basing your plans on fantasies rather than reality. You need to have at least some experience, so you know what you’re getting yourself into before you make a financial investment.
That means that you should take some time working on a farm. Volunteering is a good place to start.
From there, you’ll get a feel for what daily life is like, the workload, how to do certain tasks and the challenges that can come with farm living.
You can also build a network if you hope in the future to have a farm that’s going to make money. For example, you can connect with vendors and learn more about how things are harvested, stored, and ultimately sold.
It’s important throughout the process of buying a farm to be able to clearly separate fantasy from reality. Farming is hard work, and it’s exhausting. The profits can be small, and your income can depend on a lot of factors that are outside of your control, including the weather.
The average workweek on a farm is anywhere from 70-90 hours, and most of that is physical labor. You’re not going to have a very predictable schedule because of the weather, and you’re probably going to have to sacrifice things like your social life.
3. Finances
If you’re buying a farm as a business, then know that you’re going to need substantial investment from day one beyond just what you put into buying the property itself. You need to research, so you know what your expenses are probably going to be. You need to plan ahead.
If you’re going to make money from farming, or at least you hope to, you need to have a revenue forecast. A revenue forecast is how much you can expect to bring in over a certain period of time. What would your revenue forecast look like for your first quarter and then for your first year?
You’ll create a business plan with particular goals and a timeline for expected profitability. Since so much of farming is seasonally driven, plan with this in mind.
4. Start with a Hobby Farm
If you’re new to farming for the most part, consider beginning with a hobby farm. This is something you can manage and keep your existing job in most cases. Hobby farms are usually smaller than 50 acres and aren’t intended to be your primary income source.
Hobby farmers use their yield for their personal use, or they might sell small amounts at farmer’s markets.
The IRS makes a distinction between hobby and commercial farms based on profit as the primary motive.
Another option that’s a little more significant than a hobby farmer but still less risky is a point farm. A point farm doesn’t meet the required minimum of $1,000 in sales for a year that’s needed to qualify as a farm, but you do generate some sales from your crops and livestock.
5. The Land
To start a farm, you have to find the right land, or maybe you buy one that’s pre-existing.
When you work on a farm, you need to know where the water sources are and what water regulations you might be required to follow. Are there wells or nearby rivers or lakes? Are there restrictions on water use that could impact your ability to farm?
Then, you’ll think about exactly how much land you need based on your purpose. You can map out what you’re going to grow and how much space you’ll need.
If you’re considering investing in land not already being used as a farm, what’s the soil like?
Are there any environmental issues that could make the land not hospitable for growing?
Are there buildings already present on the property, and if so, what condition are they in? Some older farms are sold as-is, and there may be buildings on the land already, but they could be largely unusable, so you’d have to invest in rehabbing them.
6. Work with an Experienced Realtor
Finally, if you’ve weighed the pros and cons and you feel like buying a farm is still right for you, you need to work with a real estate professional who’s experienced in this area. They’ll be able to help you understand more of the specifics of buying a farm and what else you should keep in mind.
Not every real estate agent is going to be experienced with farms, so you need someone who has not only this background but also someone you can trust to help you in your decision-making process.
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