Factors Affecting the Price of Montana Land for Sale
Investment in land is always an intriguing prospect, whatever your reasons for seeking to invest. However, it is vital that you do your homework before signing on the dotted line, as there are numerous factors that could affect the buying price and the potential resale value.
Being one of the largest and least populated states in the United States means there is a lot of land to go around, but not all land is created equal. Read on to look at some of the factors that affect the price of Montana land for sale.
Size and Location
The activities you wish to conduct on-site will determine the overall acreage you will require. Obviously, the more acres you want, the higher the price, especially if the property is located in a highly sought-after area. Access to local infrastructure will also have an impact, as more remote sites might not attract as many buyers.
Being placed near or on National Parks, Lakes, and Reserves can affect the land valuation and your ability to add value in the future, either by running a recreation lodge or applying for conservation easements.
Water and Mineral Rights
Access to water can have major implications on the value of the property and makes the land subject to some complicated rules and regulations. Water rights are one of the first things you should look at when conducting your due diligence, as it can affect your ability to irrigate the land and store and use the water on site.
The water rights for many of the ranches in Montana will be included as part of the valuation, but it is important to be clear on what these rights entail and what water is deemed private and public. If you have lots of private bodies of water running through the land, there are possibilities of raising income from private fishing.
Regarding mineral rights, the level will vary from site to site, and again, this should be a major consideration before any purchase. Montana has a system in place that has been going for years, so even if the property holds the mineral rights, the current owner is unlikely to own 100 percent of them. Again, this is an area that should be explored in depth when conducting your due diligence.
Existing On-Site Infrastructure
If you are looking at sites that have had considerable amounts of work done on them, then the price is likely to be higher than undeveloped land. Some investors prefer to buy turnkey operations with an existing ranch management structure in place, which comes at a price. However, the additional cost can be seen as an investment if irrigation, accommodation, and working areas such as barns are in an excellent state of repair. Trust us; if you are new to ranching, this will be an excellent help while you are getting your feet wet.
On the flip side, some land owners have invested heavily in property improvements but haven’t actually added a great deal of value to the property. So the existing infrastructure doesn’t necessarily mean you will have to pay a premium. It is well worth working alongside an experienced property management company when looking at properties, as they will know a lot about the land and its potential.
Land is a precious commodity and as such is subject to fluctuations in price due to factors such as supply and demand. As part of the initial prospecting, it is essential to get your fingers on the pulse of the local market. Think about recent developments in the area such as weather, environmental concerns, demand for crops and livestock, and likely future developments in agriculture and tourism. All of these factors can have a significant impact on the buying and resale price of the land and the difference between a good bit of business and disappointing returns.