Think you can’t afford to own recreational land? Think again!
Many people dream of buying their own land as a rural getaway, a long-term investment to pass down to future generations, a future home site or for additional income. As land prices continue to increase, many people are skeptical of whether they can afford to own land. As your recreational land financing expert, here are ways to make owning your dream property more affordable.Create your dream getaway, gradually
Perhaps you dream of a getaway property with a custom log cabin, a fish-stocked pond and a pole barn to store your outdoor toys. It’s important to have goals, but they might not be immediately attainable within your current budget. Consider purchasing as your budget allows. Gradual progress on a piece of land you own can be mentally fulfilling, budget-friendly, and a great way to build family memories.Create a profitable side hustle
Landowners have more options than ever before to create an additional revenue stream using their rural property. Services such as HipCamp and AirBnB make renting your cabin, camper or vacant land much less of a hassle. This income might even cover a portion of your mortgage payments each month. Part-time farming, including fruits or vegetables, livestock or beekeeping, is another clever way to make your land work for you. Other ideas include leasing your land for hunting, solar or wind farms or crop farming. Depending on your municipal zoning laws, you may even consider using the property as a location for a part-time retail or service business.Buy land as a group
Many friends and family members have found buying vacation property or hunting land as a group can make payments more affordable. The key to peacefully co-owning property is to set clear ground rules and expectations in advance to avoid misunderstandings and assumptions, and to seek professional legal advice before signing on the dotted line. This could include forming an LLC. For more on this topic, see our blog, Five Tips for Buying Group Hunting Land.Rethink your annual family vacation expenditures
The average American family of four will spend $7,936 on a one-week vacation. For a similar annual expenditure, that family could make monthly payments on a nice chunk of vacant land. Loan costs and payment amounts vary based on several factors, which you will want to review with your financial services officer for more accurate and specific details, but you may be surprised when you calculate it out. Not only does owning land offer a potential getaway, it is not limited to one week since you have access to the property year-round. It could also represent a sound investment allowing you to build equity while enjoying your land. Purchasing a getaway property that can be passed down through generations is great for creating priceless memories for current and future family members.Consider a land contract
If you identify land you want to buy, talk to the seller and see if they would consider a land contract, particularly if you already lease the land or are familiar with the owner. This option allows you to navigate directly with the seller, which could mean a lower down payment requirement and more affordable monthly payments. Many terms of a land contract are negotiable such as down payment, interest rate, term, balloon period, use of land and more.
You may consider working with a real estate attorney who can help determine the specifics of the deal or draft the contract directly with the seller. With a land contract, the seller acts as the financier or bank and may require a balloon period where the loan becomes due in full after two, three or five years, but is willing to base the monthly payments on a typical 30-year repayment schedule. The payments you make each month will go partially towards the principal balance and partially to interest just like they would if you were working with a bank or credit union.
Once you are ready to pay off the land contract, your lender can evaluate the value of the property and determine your loan to value ratio. Once determined, work with your financial services officer to look at your current land contract balance to reduce or lower the additional down payment needed for your loan with GreenStone.
Get creative with your down payment
GreenStone typically requires a standard down payment on a vacant land loan. If you don’t have ample cash at your fingertips, get creative! In some cases, equity in a home or other owned property could be used as collateral rather than a cash down payment. Consult with a lending expert to discuss options for your unique situation.
Want to get started financing your own piece of paradise? Visit our Recreational Land webpage or Recreational Land FAQ page for more information. When you’re ready to take the next step toward purchasing your own getaway place, don’t hesitate to reach out to your local GreenStone branch for more information!
