Farm Airbnb and multiuse properties
Hello!
I would like to purchase land near where I live. The land would be multi-use; some farming, some residential, and some airbnb.
The idea so far is to get a farm loan. From the people I spoke with, at least some amount of agricultural income needs to happen in order to satisfy the loan; in this case, it was $4,000 per year of agricultural income. This isn't just from crops or livestock, but could be something along the lines of people visiting a corn maze, for example, as long as it is "agriculture related."
After obtaining the property, I would like to put a pre-fab or modular home onto the property from which I could live, and then begin adding yurts or some other prefabs to airbnb. The market for this is just a calm location for people to escape the city, stargaze, or just be out in the country for a bit. Nothing crazy.
The intent is to have something on the property which pays the bills while I hold the land long-term as an investment.
From what I've seen, the main things to look for when searching for land is if the land can have septic (perc test) and if the land is suitable for agriculture (soil tests).
I've had 3 rental properties in the past, which I'm starting to slowly sell off, and would like to shift gears into this land/short term rental industry. I just am completely novice at it and would like some feedback, or if anyone has tried it (failed or succeeded) and have some tips, I'm open ears.
I've found a few plots of about 40 acres in southern North Carolina/Northern South Carolina, but am also looking around Charlotte. Purchase price (and budget) is below $200k. Farm loans are 10-15 years, and 20% or more down. So I'm looking at 40-50k down and around 2k/month for mortgage. Then there is of course insurance, property use within the contract with the bank, etc.
The prefabs which I've seen range from 10k-70k (small yurts or domes up to 1/1 structures built from conex boxes). Those would be out of pocket, too. Land development costs, I'm unsure of, but I've seen anywhere from 5k-10k for a foundation, let alone adding electricty and water. Presumably, I could use solar and a well, but that depends on the property and local laws?
If anyone could point me in the right direction for further research, I'd be really thankful,
Thank you,
Justin.
@Justin K. I can't give you too much advice on this other than to do a little bit of research on how the property is taxed and how the county/municipality would treat the taxation. If you qualify for agricultural taxes, which are usually much lower than residential/commercial taxes, they may not allow you to collect any rental income as that would be a commercial activity. You could convert the taxation back to residential or commercial, but you'll have to pay what are called roll-back taxes, which can be pretty brutal depending on how long the property was agricultural in nature. This is why you see a lot of operations that are multiple TMS #s in SC. An owner will often subdivide multiple parts of a farm in order to make all the taxation and zoning comply with their needs.
@Troy Gandee
Thanks a whole lot for your response!
I'm talking with both a Farm-loan broker and the local counties to see what is possible.
From what I've found, the land has to be predominantly used for agriculture to qualify for the farm loan. I'm trying to see if I can get a few RVs on the property to get around some of the restrictions, but legally, of course.
Thanks again,
Justin
