What to do After Inheriting a Land in Illinois

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What to do After Inheriting a Land in Illinois

Bart Waldon

Blessed with fertile prairie farmland and the ambitious metropolis of Chicago, Illinois encapsulates both rural charm and urban excitement. From the amber waves of grain that blanket the Land of Lincoln’s sprawling countryside to the towering skyscrapers sparkling along Lake Michigan’s shore, Illinois provides something for everyone. The state’s prime Midwestern location has made it a transportation hub between coasts. With an economy fueled by manufacturing, agriculture, technology and tourism, opportunities abound across the Prairie State.

Receiving vacant land through inheritance can seem a mixed blessing. As the new proprietor, you’ve gained an asset. However, uncertainty may arise regarding how best to proceed. This article seeks to guide Illinois heirs in weighing options such as selling the land, developing it, or retaining it as an investment. With thoughtful planning and vision, inherited land can become a valuable legacy rather than a burden.

Get Organized and Assess the Land

Once you've inherited some land, it's time to dive in and do your homework. Round up important docs like the deed, tax records, and plat map to get crystal clear on the property's boundaries and legal description.

Then shoelaces up those hiking boots and hoof it to survey the land first-hand. Walk the property lines and poke around to get a feel for the terrain and features. Any sweet spots for farmland? Prime trees ready for timber? Marshy wetlands providing a wildlife oasis? Scout it out with fresh eyes to spark new possibilities percolating in that noggin.

You also need to dig into any restrictions that could cramp your style. Make sure zoning jives with your plans for the place. Scope out any liens, easements, watershed deets, mineral rights sitch, and other factors that could limit your options. Doing your due diligence upfront sets you up for informed choices down the road.

Decide Whether to Keep or Sell the Land

One of the big decisions on the table is whether to hold onto the inherited land or sell it.

Reasons you might want to keep it in the family include:

  • The property could be sentimental or part of your family's legacy
  • It could be great for recreation like hunting, camping, ATVing, or hiking
  • You may want to farm or harvest resources like timber from the land
  • It could appreciate over the long-term as an investment

However, hanging onto the land also comes with some costs and responsibilities:

  • You'll need to keep paying those property taxes and maintenance fees
  • There are liability risks to manage
  • Either you or a tenant farmer will need to actively use the land
  • You won't have quick access to the land's monetary value

Selling the property could give you liquidity to:

  • Invest the cash elsewhere
  • Pay down debts
  • Distribute money to other heirs
  • Fund other plans without ongoing obligations

Selling also avoids the headaches that can come with overseeing vacant land. Ultimately, choosing to sell or retain the land should align with your personal financial goals and family situation.

Get an Appraisal to Determine Land Value

Before making any decisions about selling, it's smart to get an appraisal done to see what that land is worth.

The appraiser will look at stuff like:

  • How big is the property and what's on it
  • Is it near roads and hooked up to utilities?
  • What can you use the land for based on zoning laws?
  • What have similar nearby properties sold for recently?
  • What are the overall real estate trends in that area?

An experienced appraiser can provide an expert opinion on the fair market value. Appraisals usually cost a few hundred bucks, which is worth it for the peace of mind.

Watch out for lowball offers from land buying companies that try to snatch it up way below appraisal price. While it's quick cash, you may leave money on the table compared to selling with some extra time and effort.

Market and Sell Land for Top Dollar

If you decide to sell, here are tips to maximize sale price:

Hire a real estate agent experienced with land. Quality agents have networks of farm buyers, developers, and land investors who may pay well. Agents also handle marketing and negotiations. Although commissions range around 5-10%, a good agent earns their keep through expertise and connections.

Advertise online and offline. Work with your agent to cast a wide net for potential buyers. Online listings on real estate sites get visibility. Offline means yard signs, print ads in local papers and farm publications, and possibly direct mail.

Offer owner financing. Financing a sale over several years with interest can motivate buyers and fetch higher prices. But ensure payments are secured by the land through a mortgage.

Wait for the right offer. Be patient searching for a buyer who recognizes the land's long term value. Jumping at the first low offer leaves money on the table. The right buyer will likely come along within 6-12 months.

Negotiate win-win deals. Compromise on price and terms if needed to conclude a fair deal. But don't cave on lowball offers. Firm negotiation from a strong position maintains value.

Close the sale and move on. Once you sell at an acceptable price, be grateful to complete the process and have funds to pursue other plans.

Develop the Land for Financial Gain

Rather than selling land as-is, another option is developing it to increase value.

Farmland. If suitable for crops or livestock, farm it yourself or rent it to farmers. Leasing generates steady passive income. Farm ground also appreciates over time.

Timberland. Managing timberlands sustainably produces lumber revenue every 20 years or so when mature. Selective harvesting provides income before final clear-cutting.

House lots. Subdividing acreage into residential lots presents potential for massive gains. But requires major investment in zoning, roads, utilities, marketing, and patience.

Commercial property. Land suited for retail, office space, etc. can also yield large returns if demand exists. Confirm need and feasibility first.

Recreational land. Some scenic rural land can serve purposes like golf courses, campsites, trails, or hunting. Research recreational demand in the area.

Mineral rights. If your land has untapped oil, gas, coal, or aggregates like sand & gravel, mining leases can generate royalties.

Development projects require big funding, expertise, and risk tolerance. But profits can be enormous if successful. Weigh costs and risks carefully against potential rewards.

Gift Land to Family or Charity

Rather than selling land, another philanthropic option is gifting it to family or donating it to a charitable organization.

Benefits of gifting land to relatives:

  • Keeps property in family
  • Can gift income-producing land
  • Recipients avoid inheritance tax
  • Satisfaction from generosity

Donating land to a non-profit like a land trust or church provides other advantages:

  • Preserves land from development
  • Creates public recreational areas
  • Qualifies you for a tax deduction
  • Fulfills philanthropic goals

Consult a tax advisor to structure land gifts in the optimal way for tax benefits and minimizing legal liabilities. Set clear boundaries on land usage and maintenance expectations.

Hold Land as an Investment

If keeping the land long term, manage it as an investment through the ebbs and flows of the real estate market. Here are tips:

  • Be strategic about when to sell vs. hold
  • Pay property tax bills on time
  • Keep up with maintenance as needed
  • Obtain liability insurance
  • Explore land leasing opportunities
  • Diversify investments beyond just land

Monitor factors like zoning changes and neighborhood growth that influence value. With patience, idle land tends to appreciate over decades. The land underperforms stocks in the short term but beats inflation long term.

Get Help from Land Management Experts

Managing vacant land across a state from your home can be challenging. Seek help from professionals for tasks like:

  • Overseeing land you want to retain
  • Providing local real estate expertise
  • Guiding development projects
  • Handling sales transactions
  • Resolving legal issues

Look for a trustworthy land management company with expertise in Illinois real estate. Their services make it easier to benefit from inherited land remotely.

Final Words

Inheriting land can be a complex process with many factors to weigh. Take time to thoroughly assess the property and research all your options. Determine your goals for the land - whether to sell, develop, donate, or retain it. Consult experts like appraisers and land management professionals to maximize your investment. With strategic planning, inherited land can become a valuable asset instead of a burden. Illinois offers promising possibilities for vacant land inheritance if handled wisely. Do your due diligence and make informed decisions, and the land can become a true inheritance.

Frequently Asked Questions (FAQs)

How long should I expect the inherited land sale process to take?

In a balanced market, plan for a 6-12 month sales journey. Marketing the property and waiting for the ideal buyer who recognizes its potential takes patience. Avoid rushed decisions or succumbing to lowball offers.

What taxes will I owe on the inherited property?

You'll be responsible for continuing the annual property tax payments. Inheritance tax may also apply if the total estate value eclipses Illinois' threshold. Consult a tax pro to minimize liabilities.

Can I build a residence on the rural land I inherited?

That depends on zoning laws, septic capacity, road access, water availability and other factors. Research local regulations to see if residential use is permitted. Assess feasibility of utilities before finalizing building plans.

Should I use an agent or sell the land solo?

Unless you have rural real estate experience, hiring a knowledgeable local agent is wise. Their expertise in pricing, marketing and negotiations is invaluable. For most, the commissions are worth the higher sale price.

What homework should I do after inheritance?

Gather key info like the deed, plat map, tax records, appraisal and documentation of any leases or easements. Also walk the land to inspect it thoroughly. Solid due diligence sets the stage for informed choices.

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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