Welcome!

By registering with us, you'll be able to discuss, share and private message with other members of our community.

SignUp Now!

Buy an Agricultural Land

moekhan

New Forum Member
Registered
Joined
Aug 29, 2016
Messages
8
I am new to this so please help me out. I am purchasing an agriculture land, however current zoning is A1 (Agriculture). Now, the place is growing and city has an official plan for surrounding area as residential etc. Expect this property, So I called municipality of the city to find out further. I acquired if this property will be residential zoning in the future, she said, "I would not anticipate on that", now I do not know what that exactly means.

Is there anyway I can figure out that this land has potential value for future?
I do not believe it is on green zone.
Can someone please guide me through this. Also, I am buying this for long investment, down to like 5-10 years.
 

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
If in ALR then budget a 20-40 year horizon. 5-10 years is not long term if you think ALR (agricultural land reserve). Getting land out of agricultural zones is very VERY VERY difficult and time consuming.

Better odds in Las Vegas.

Where in Canada is this ? BC ? ON ? AB ? PEI ?
 

moekhan

New Forum Member
Registered
Joined
Aug 29, 2016
Messages
8
Thank you Thomas for your reply. This proerty is in ON.

How would i find out if it is ALR?
What do you think it means, when a lady from city municipality said, "I would not anticipate on it"?
 
Last edited:

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
If you don't know what the process of agricultural land rezoning is then you should not buy the land, or you should assume it can NEVER be rezoned and pay accordingly. Essentially that is what the lady in the town is telling you. You should assume she is right.

Land development is very risky, cash intensive, very time consuming AND knowledge intensive. Not for rookies !

Gambling in Vegas (or Niagra Falls) has better odds and requires less time and far less money. Try that instead: place $10,000 on 22 on the roulette table and see what happens, or if you can stand the risk and likely loss ! Or perhaps only $1000.
 

REInvestors888

Inspired Forum Member
Registered
Joined
Jun 1, 2011
Messages
142
Land development is very risky, cash intensive, very time consuming AND knowledge intensive. Not for rookies !

Very very difficult indeed! I believe you'll be losing the time value of your invested money. Your ROI is much higher in cash flowing and appreciating rental property. Just my 50 cents......
 

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
.. Your ROI is much higher in cash flowing and appreciating rental property. Just my 50 cents......
Not necessarily. Land development can be very lucrative but yes the risk is higher, borrowing far more costly and the dependency on a town/municipality/city to say yes to your plans also far higher than an existing asset where you know the sq footage or the zoning today. We almost tripled our money in a 10 acre land deal in Yorkton, SK over about a 3-4 year timeline but got stuck in Cold Lake, AB due to a lawsuit ( due to alleged seller's material mis rep and fraud) and currently low demand. Land in Okanagan right now a good investment in the right markets in the right sub-locations at the right price.

of course, buying ag land with no idea about farming, zoning or city's plans is very high risk.
 

REInvestors888

Inspired Forum Member
Registered
Joined
Jun 1, 2011
Messages
142
Land development can be very lucrative but yes the risk is higher, borrowing far more costly and the dependency on a town/municipality/city to say yes to your plans also far higher than an existing asset where you know the sq footage or the zoning today.
I agree 100%.
 

moekhan

New Forum Member
Registered
Joined
Aug 29, 2016
Messages
8
Ok, so I have been researching on this property today. Currently there is a yearly rental income.
Now, according to Official plan and intensive city plan I have notice that part of the property has POND and TREES (about 30% of the property). It says "Long Point Region Source Protection Authority".
Now, does that mean I can not build anything at all on this property or can not build on 30% of property that is "Long Point Region Source Protection Authority"?
Another concern I have is the tenat..what if he runs away or sui
And Thomas, could you kindly share with us what exactly happen when you say, "(due to alleged seller's material mis rep and fraud)", if that is OK with you. This surely will help me to dig further in.

Thank You all again...
 

Thomas Beyer

0
REIN Member
Joined
Aug 30, 2007
Messages
13,881
If you buy a piece of land and the seller misrepresents material facts or intentionally hides them from you, then you have to sue them after you acquire the land.

In your case you need to assume that you buy agricultural land with no other land use whatsoever in your life time, unless you have other information. Price the land accordingly. I do not know what you are allowed to build. That is your job to find out. On some farms in ON or BC you can have a farm house, and on some other agricultural lands you aren't allowed to build anything. Research further.
 

moekhan

New Forum Member
Registered
Joined
Aug 29, 2016
Messages
8
WOW, acquiring land is more complicated then I thought. Who can give me such information about misrep or other facts before buying the property?
I know, i am asking so much questions here, I hope you can understand I am on learning curve, so everyone help is greatly appreciated. Thank You
 

Courtney Hammond

Courtney Hammond
Registered
Joined
Jan 18, 2016
Messages
161
You need to talk to the county that the land belongs to. I think in your first post you said you called- often you can ask to have a meeting with a land development officer to have them go over the steps to development- rezoning, and all the things you need to know in order to classify your investment.

Based on what you said in the first post- you should only be paying for the value of the land as AG. The county has no intentions or plans to rezone it.

You may want to sit down with them and ask them what the county plan is- etc.

I haven't done land development yet- but I have done these steps as I'm working on understanding the rules and regulations and judging current properties now so that I can start mock-up costs etc. I had originally looked into a "simple" subdivide amongst 6 friends so I needed to research even that potential.

As Thomas has pointed out- there are so many things to know... and the only people that can answer the basics of the land you are looking at is the county.

Many of the parcels I looked at while doing research for my friend subdivide advertised that they had done the first two steps for the subdivision... so it looked like they actually had land to sell the could be subdivided. What I found out by taking the land numbers to the county at my meeting was that it was extremely unlikely that it would go through- or that there were major issues with the plans submitted.


Are you working with a realtor that understands development? They wouldn't be expected to know everything for all counties - but they would know the basics and how to get more information.

As Thomas pointed out- research. You won't find the answers here other than being told that you need answers. Call/email the county - set up a meeting. Understand how it all works within your county.... then judge the land you are looking at- and other pieces in the area.
 

24024

New Forum Member
Registered
Joined
Apr 30, 2015
Messages
4
As the other members stated, land development can be very tricky and costly but it is not impossible.

You need to sit down with a town or county representative and ask all of these questions. Don't forget to ask about:
- adjacent properties and their zoning and subdivision histories. This may help you build an argument for why your property should get rezoning.
- wet land and green space setbacks. You may buy 100 ac but only have 30 ac of usable land after setbacks. In this case the price of the land per acre should be heavily discounted.
- ask what the county or town needs in the area and try to work with them as opposed to against them. If they foresee commercial use in the area, don't try to get residential zoning.

I went through this on a piece of property in Calgary not too long ago and learned a whole lot. Most importantly is work with them and try to make sure what you are doing is going to benefit the area while making it worth your while $$$.
 

REInvestors888

Inspired Forum Member
Registered
Joined
Jun 1, 2011
Messages
142
what you are doing is going to benefit the area
just would like to add my 50cents: include in the narrative/application form the potential jobs, businesses, planned support to the communities and tax revenues that the project will bring to the county.
 
Top Bottom