Many people inherit land from an estate, and are left with the question; Now what? Often times they live in another area of the country and have never visited the property. Here are the basics.
Hold: If one decides to hold onto the property as an investment you will want to manage the tract in such a way as to limit liability and produce enough income to pay annual expenses such as real estate taxes and insurance. first step is to secure the property with fences, gates and no trespassing signs. If it is a tract that is suitable for timber (or has timber in place), consult a forester for best management practices. Timber historically produces long term Return On Investment at a rate of 8% to 10%.
Lease: Subcategory of “Hold”. If the tract is large enough and cleared, it can often be leased to a farmer for crops and cattle. If the parcel is mostly wooded, hunters are always looking for land to rent during the season. Make sure to make sure whoever leases carries their own liability insurance.
Sell: If you would rather liquidate the cash and sell the land, be aware that there my be some Federal tax implications depending on how title was held when you took ownership. It would be wise to consult a tax professional. The next step is to find a real estate broker who specializes in land to give a fair market value report to price the tract in order to net you the most money at closing.
If you would like to have a no obligation conversation about your particular situation, reach out to me by email or phone.
Sidney Stidham, Broker
This article is for informative purposes only and should not replace the legal advice of an Attorney or tax advice of a CPA.
For your estate law needs, we recommend McCabe Harrison of Harrison Estate Law. www.harrisonestatelaw.com