How to Invest in Ohio Land?

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How to Invest in Ohio Land?

Bart Waldon

With over 26 million sprawling acres dedicated to dynamic cities, productive farmlands and four season natural beauty, the Buckeye State offers boundless potential for land investors scouting undervalued sites prime for profitability flips. Approximately 13.5 million acres currently fall into private hands according to census data – ensuring plentiful property plots exist offering enterprising owners either short-term redevelopment income plays or lifelong legacy asset compounders overtime as the Midwest continues attracting new residents away from coastal urban density misgivings.

Yet passively purchasing pretty postcards alone rarely unlocks Ohio lands’ hidden ROI potential without execution expertise guided by location-specific wisdom. Let’s review essential tactics for evaluating lucrative land deals across Ohio – from sourcing promising sites scoured directly from motivated sellers to adding value through targeted spruce ups ultimately attracting buyers delivering satisfying sale closure.

Key Drivers Influencing Ohio Land Investing Outcomes

While no universally “best” investment location exists given unique owner goals differing, understanding core value dimensions that drive land profitability in Ohio steers strategy:

Development Demand Dynamics 

Both commercial and residential developers offer perhaps the most reliable buyer groups consistently pursuing shovel-ready sites as Ohio’s population expands over the next 20 years at above average projected rates. Lands with near-term infrastructure and utilities accessibility in growth trajectory counties often appeal most to these entities. Local broker connections useful understanding not just where but what developers wish to build remains key so your land improvements address identified market needs.

Farm Consolidation Trends 

Despite recent agriculture headwinds, larger prominent farm operations continue eyeing contiguous farmland tracts when smaller legacy owners feel pressure to liquidate for retirement or estate planning reasons. This gradual land consolidation produces opportunities to acquire smaller mid-producing cropland parcels for future sale via patient holding strategies or for interim rental income generation adding yield.

Natural Resource Potential 

While only accounting for 3% of state GDP presently, both shale drilling and potential lithium mining concentrates span vast deposits in eastern Ohio counties offer speculative commodity upside over long-term horizons for lands secured today before wider recognition develops in coming years as domestic mining interests accelerate.

Sourcing Undervalued Land Parcels Before Wider Market Exposure

Once grasping key influencers that determine land valuations over time in Ohio, the next imperative involves identifying promising acreage still flying under the radar – yet advantageously positioned to intersect positive forces driving future demand and by extension higher sales pricing. Savvy techniques useful uncovering these emerging arbitrage opportunities include:

Farm Auctions Tracking 

Local estate resolutions and farm succession transitions usher select properties to public auction, often selling 20%-30% under true values given quick sales motivations by inheritors less connected to lands personally. Familiarity with area multi-generational farm legacies through public administrator and banker relationships help anticipate upcoming inventory supply shifts pre-MLS advertising.

Municipal Tax Sales Prospecting 

Overlooked back taxes owed on abandoned or forgotten land holdings eventually motivate local county trustees and city treasurers to recapture funds through public sheriff sales. Paying attention to these routine filings reveals hidden gems cost averaging below $1000 per acre with patient investors letting back taxes accrue prior. Redemption rights apply allowing original owners reclaim properties within 1-3 years after such sales by repaying taxes paid plus penalties to the winning public auction bidder. This redemption right presents some risk of surrendering lands back to former owners after making acquisition plays but serves as extended holding period allowing voluntary sales.

Online Listing Site "Coming Soon" Prospecting 

Before properties hit or Zillow publicly, preview portals like Compass and RedFin notify registered agents and select clients approximately 30 days ahead listing details including location maps. Registration grants insider access to earlier market intel on upcoming inventory.

Direct Mail Campaigns in Target Zones 

Good old fashioned targeted letters to land owners in specific zip codes expected to experience future development growth works reaching disengaged owners possibly contemplating sales for right offers. Tactful messaging swaying minds can trigger dialogue and goodwill.

Driving Selected Target Areas 

Simple windshield surveys scanning surrounding tree lines or noticing prime corners with outdated FOR SALE signs also produces leads. Follow ups inquire whether existing owners remain receptive to investor offers or if recent activity changed status.

Deploying consistent sourcing efforts across these multiple prospecting channels surfaces hidden inventory before competition enters at advantageous buy thresholds.

Employing Smart Due Diligence Protecting Land Acquisitions

After identifying promising land leads by thoughtful hunting, applying prudent due diligence pre and post transaction ensures protection against surprises threatening investments or misaligned buys lacking vetting:

Historic Sales Analysis 

Studying prior sales records flags any buyers forfeiting deposits from past deals gone awry. Uncovers adverse physical conditions not easily discoverable superficially.

Full Title Commitments 

Beyond basic title searches, comprehensive title commitments required before closing analyze all recorded easements, mineral/water rights or encumbrances attached to land ownership rights tied to purchases ensuring clean acquisitions.

Baseline Environmental Audits 

Soil, water table and phase I testing analysis by geoscience professionals detects obvious contamination leftover from prior functional uses such as farms or commercial buildings that may limit site repurposing or require substantial remediation expenses carrying hidden financial risks if left undetected until future owner discovery.

Infrastructure Availability 

Zoning details coupled with utility company assessments regarding gas, electric, sewage and internet accessibility timeframes for reaching more remote land locations influences end user development potentials down the line.

Mineral Subsurface Assessments 

Understanding extractable shale, lithium concentrations, or sand/gravel deposits gets measured by advanced aerial imaging tools highlighting hidden pockets possibly missed by initial drive-by assessments. This unlocks selected lands speculation value dramatically exceeding surface level worth for commodities plays.

While no guarantees exist removing all land investing risks outright, prudent due diligence peels uncertainty profiles surrounding key influencers that make or break ultimate ROI destinies.

Employing Creative Deal Structures Delivering Profits Despite Modest Returns

Given agricultural land appreciation averages relatively tame single digit annual returns historically, realizing adequate yield requires patient holding periods or interim supplementary income streams layered atop straight land value gains. Savvy structuring ideas include:

Installing Renewable Energy Infrastructure 

Leasing acreage pockets to solar/wind projects generate reliable inflation adjustable “rental” income from otherwise idle land without interfering existing usages. These 10–25-year energy farm leases enjoy pre-set escalators gradually elevating payouts boosting overall asset IRRs into double digit returns rivaling straight commercial property plays.

Trail Conservation Easements 

Allowing nonprofits to carve public trail easements through woodlands in exchange for substantial upfront private grants or ongoing land tax liability reductions through conservation status conversions keeps passive ownership intact while benefiting communities. Represents popular compounding return enhancement easily overlaying other holding strategies.

Water Rights Monetization 

In certain western Ohio counties, watershed rich properties with creek/stream access appeal to municipal utility companies or bottled water enterprises facing supply constraints down the line as populations grow. Land owners leasing well water extraction rights receive rental fees with built-in annual increases creating perpetual cash flow tailwinds. For risk tolerant owners, even land options agreements allowing potential full-scale future company acquisitions represents plausible plays for today's discounted land.

Final Thoughts

While cap rates for vacant land rentals or immediate flips pale compared to more management intensive commercial real estate options, tailored value-add enhancements applied atop patient holding rewarded by inevitable development demand trajectory shifts over forthcoming years and decades across Ohio position land plays to deliver better risk-adjusted returns compared to bonds or stock markets alone given inherent tangibility strengths. Local broker allies steer successful ventures by advising improvement specifics keeping properties perpetually relevant when aiming for enduring legacy wealth compounding.

Frequently Asked Questions (FAQs)

Is buying land in Ohio a good investment right now? 

It depends on your goals and the specific area you're looking at. Ohio's market is diverse - some regions are booming while others are stagnant. Do your homework on local economic trends, development plans, and population growth. Rural areas might offer cheaper land, but urban fringes could see faster appreciation. There's no one-size-fits-all answer, so carefully consider your investment strategy and risk tolerance. 

What's the deal with property taxes on undeveloped land in Ohio? 

Ohio's property tax system can be a bit tricky for land investors. Undeveloped land is often taxed at a lower rate than improved property, which is good news for your wallet. However, rates vary significantly by county and can change if the land use changes. Some agricultural land qualifies for tax breaks under the CAUV program, but there are strict requirements. It's worth talking to a local tax expert to understand how this might impact your investment. 

I've heard about mineral rights in Ohio. Should I care about these when buying land? 

Absolutely. Ohio sits on part of the Utica Shale formation, which has led to increased interest in mineral rights. When you're buying land, make sure you understand what rights come with the property. Sometimes, mineral rights have been sold separately from surface rights. This could affect your ability to develop the land or benefit from any resources beneath it. Always get a clear title report and consider legal advice if mineral rights are a concern. 

How do I figure out if the land I'm eyeing can be developed? 

Start by checking the zoning laws with the local municipality or county. These will tell you what you can and can't do with the land. But don't stop there - look into things like access to utilities, road frontage, and environmental factors like flood plains or protected habitats. Sometimes land that looks perfect on paper has hidden issues that make development a nightmare. It's often worth hiring a local land planner or civil engineer to assess the property's true potential. 

Are there any grants or incentives for land development in Ohio? 

Ohio offers several programs that might benefit land investors, depending on your plans. For example, there are brownfield redevelopment grants for cleaning up and repurposing old industrial sites. If you're into agriculture, look into the various USDA programs available. Some cities also offer tax abatements or other incentives for certain types of development. These programs change frequently, so check with the Ohio Development Services Agency or local economic development offices for current opportunities.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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