Investing in Raw Land - Grazing Lease
Howdy, I'm looking at a few different pieces of land in south central and southeastern Colorado that have grazing leases in place. These plots are 60-100 acres and I have no intention of building on them; at least yet anyway. I'm looking at the covenants that guide a few of the properties but I'm curious if anyone has any experience with owning land with grazing leases in place. Some of the research I've done says to look into questions around fencing the property, water/irrigation, minerals for the land.
I'm pursuing this as a lower cost option to start investing and in theory, a very low risk, nearly passive path to get started. Any guidance on previous experience would be appreciated!
My friend @Brock Smethills might know something about this.
I think a big thing here is to do some research. For example, I believe that there is some rule where if the land stops being used for agricultural use, it can be taxed as residential / commercial. You don't want to have that happen.
Here are some updates from my friend:
Things to look for:
1. Duration first and foremost
2. Tax protests - make sure the lessee is required to provide evidence that the property is used for ag purposes for taxes
3. Water is important, but doubt a 100 acre parcel has much to worry about
4. Fence maintenance is a huge nightmare make sure the lessee is responsible for it
