Buying Hunting Land with a Group
One of the common avenues of purchasing hunting property is through partnership agreements where a group of individuals come together to own property that provides hunting opportunities to satisfy several individuals.
A land owning partnership is similar to leasing hunting land with your buddies, but owning the land has benefits. You get the satisfaction of managing the wildlife, controlling access and what activities the land will be used for, and your hunting rights are controlled by you and the group, not the landowner you pay rent to.
There are financial benefits as well. The group receives any cash income the land provides, whether it’s through timber harvesting, farming or government CRP programs. If and when the time comes to sell, liquidation typically produces a profit. So, it may be better in the long term to put the money you pay for a hunting lease on something that produces immediate enjoyment and also a long-term financial gain.
Crunching the Numbers
Let’s say it’s your dream to hunt a trophy whitetail property in Iowa. You can join a hunt club, lease land or buy a piece of property.
Right now, this 218 acre tract of hunting land in Iowa is available on our website. At $2,554.58/acre, it’s well below the average price per acre in Iowa. The bucks are also well above the standard in terms of quality (take a look at those trail cameras).
Let’s run some numbers and compare costs of leasing and owning over a period of ten years. Let’s assume you are partnering with three other hunters, and let’s make a conservative assumption that the price per acre to lease the land is $25 and increases 10% every three years.
If owning, let’s say the group puts 20% percent down and locked in a 30-year loan at 6% interest rate, kept the property in CRP enrollment for all ten years, and rented the 20 acres of tillable land to a farmer at the average price for the region ($229/acre). We know the taxes are $400/year.
We share these numbers not to show that leasing hunting land is comparable to the cost of owning it – it’s not – but rather where your money is going after it leaves your bank account. Over the course of ten years, you will pay around $15,000 to lease a great hunting property. That money will never be seen again. When you finance the property to own, some of the money goes to interest on the loan and some goes to building equity in the land.
It’s also an investment. Over the long term, real estate price appreciation can be significant.
We are not saying buying hunting land trumps leasing in every case. Aside from cost, the decision is very personal. Only you know if you are ready, and if you are, we are here to help you realize your dream.
Preparing to Buy Land with a Group
Initial investors are often unable to purchase hunting land without taking on some type of partner. Combining assets and dividing the costs can make hunter-land ownership affordable. Food plot supplies, equipment and work can also be shared. But humans don’t always share well. You have to plan for disagreements, no matter how unlikely you think they are to arise.
Like any business deal, it comes down to picking the right partner(s) and establishing a plan for how you will operate as a group. The owners need to share the same vision for the land. It’s important to come to agreements on issues, such as, guest hunters, how payments will be made, what happens if someone falls behind payments or passes away. Do this before any purchase is made. Then, visit a real estate lawyer to get all these agreements in writing.
Typically, in partnerships where individuals own equal shares of the land and new issues arise that are not in the legal agreements, voting is how decisions are made.
There are several ways hunting land partnerships can be set up legally. The most common are putting multiple names on the title and establishing an LLC.
The Whitetail Properties' Land Specialist team is well versed in partnership agreements and can offer guidance in seeing you and your friends turn your dream into a reality.