In this decade, more and more millennials are turning to agriculture as a career choice. This is because of the high demand for organic food, coupled with a low supply of Virginia farmers. Millennials are also drawn by the slower pace of rural life and access to affordable land in many areas.
The U.S. Department of Agriculture predicts that the number of farms will decline by 18% in the next 10 years and if this trend continues, there could be an absence of farmers to grow food for us all within 30 years.
If you’re thinking about buying your own farm in 2021 or sooner, here’s what you need to know!
The first step is to get your ducks in a row. Buying a farm isn’t like buying another real estate where you can just go look at the property and make an offer. Buying a farm takes planning! A few things to take care of include:
- Buying or leasing land and basic tools
Buying farmland outright is almost never an option, and you might have to lease it for a period before taking ownership. The basic tools will cost more than $5,000. For example, tractors, tillage implements, sprayers, pumps, etc
- Assembling your team
Buying a Virginia farm also means that you will be employing many people from lawyers and real estate agents to contractors and laborers for building your structures. Make sure all of them are ready before you take the plunge!
Although you won’t be needing lawyers, in the long run, it is worth it to incur the cost upfront, rather than having to hire them later.
- Securing financing
Unless you have thousands of dollars saved in cash, then you need to find a lender. A farm loan is almost always a long-term one where the payments stretch out over 25 years or more.
A 2017 USDA report shows that only 40% of potential Virginia farm buyers are “somewhat confident” they can finance their purchase with a loan or other means. The rest weren’t sure whether they could find the money needed to buy a farm at all.
The good news is that with the cost of capital being low and because it will be your first property (if younger), there are incentives in place for you. Like the US Taxpayer Relief Act and Publication 225, it is easier for farmers to get loans from banks and get tax incentives than for others.
Start with the end in mind – what do you want your dream Virginia farm to look like and how will it make you happy.
Start with a list of all the things you want to do on your farm. Make sure to add realistic steps that you can take with your budget in mind and keep an eye on your timeline for ownership.
For example, if you want to start producing organic food on your Virginia farm and you plan to use several sustainable practices like aquaponics or permaculture, make sure that you have the right professionals lined up for the job or even a few years of experience before you buy.
Buying a Virginia farm is not something to rush into. It takes time and it’s best if you are aware of your own strengths and weaknesses, as well as the kind of lifestyle that you will be leading from now on. It requires patience and knowledge – two qualities that are rewarded with the great taste of homegrown food!