I am new and have been researching real estate investing and am very excited about starting. My question is: Can you put together a successful real estate business in a rural Montana area and what are best strategies? And also what would be the best markets in Montana? (We are thinking of relocating in Montana). Thank you for any and all input!
I wouldn't rural that out!
Hi Cash, I just posted this in another thread, so I'll copy and paste it here:
I have been doing STR's in southwest Montana for about 5 years, and am branching out into rural business. Really rural.
I've done a lot of research on this exact topic, and it is a tough one for sure. A large chunk of our economy is tourism oriented, and this meshes very well with real estate. In more ways than STR management. I am using STR's as a buffer to increase cash flow in commercial markets that are traditionally seasonal. So figure out what flavor of tourism is in your corner of Montana and then focus on that. For something like this, commercial or unzoned land would work well.
Otherwise, I am a big proponent of agriculture, and especially innovative agribusinesses. I would love to invest, one day, in a vertical farm, on a land lease from the State, powered and heated by one of our many geothermal pockets. But otherwise, you could broker leases, or split profits with a farmer with no land, or farm yourself. Many greenhouse businesses have strong business models, with plants that do well in our climate zones. I hope to see Montana as a major producer of food and hemp products in the future.
Rural areas have a huge advantage when it comes to relaxed regulations, like no zoning for example. Many businesses can be started on a piece of land like this. Manufacturing is big here, with companies manufacturing right here in Montana, such as Blackhawk, Mystery Ranch, Simms, and more. Food production would do well in a parcel like this, especially since the Montana Legislature passed some kind of "cottage food production" law which allows for food production up to a certain amount without more regulations taking effect, essentially. Montana also has produce to use, which can be bought cheaply and converted into a more expensive products. Examples would include bread, alcohol, beer, and numerous types of wood products. I think, with Montana's favorable climate, hemp will dominate, and produce raw material for goods ranging from plastic, paper, fabrics, composite lumber products, and much more, all made from hemp. So being in a position where having some empty land for lease to a facility that can make these products may be pretty lucrative.
I would make sure you know about what you are buying/selling. If you are selling farms, then you should know about soil quality, land use, etc. Also a thorough understanding of wells and septics is critical. Also a full understanding of easements, surveys etc is important. Things aren't as cut and dried in the country. Just because you see a farm road to a property doesn't mean there is an easement there. Fences, particularly old ones, don't always designate a property line. Understanding waterway regulations and flood plains can also be important if those are present.
Find out the cost to install power to a property. 25 years ago, a friend of mine was charged 10k per pole, next county over we were charged about 12k for half a mile of poles.
Understand the demographics of the area. If it is primarily tourism then lower cost housing if you are renting/selling to locals since tourism requires workers that are often lower paid. Affordable housing is often a huge problem for resort areas. Hubs worked for a resort as a kid and had to live about an hour away. Now that area is a tourism area and doesn't have affordable housing for the resort workers. I'm not sure where they are living. High end would be the STR which can be a money maker but make sure you know what those tourists are looking for.
Good luck. Montana is a beautiful state.