# Land- to own or to rent



## MIHay (Jun 4, 2018)

As a young farmer with only about 10 acres of tillable land owned by my family, the issue I am facing now is finding more ground. To add to the issue, every year more and more farmland is being split up and sold off for development, making it even more competitive to get ahold of any available land. Every now and again there is land that comes up for sale (happens far more often than land popping up for rent) and im wondering if it would be profiable to buy land instead of renting. Keep in mind that with the rate of development in the area any land for sale is pretty expensive. 15 acres just cane up diwn the road for about $8000/acre. Half is wooded the other half is tillable. Anyone have any comments/advice or experience with similar issues?


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## mlappin (Jun 25, 2009)

Been thinking about that myself, I'm 48 and far as I can figure it there is absolutely no way to pencil it out far as owning to renting.

My reasoning is this, if I can rent it for $250/acre, in 20 years I only paid $5000/acre to farm it, if I bought it I now I have a mortgage payment and the interest on that (it is deductible though) plus I get to pay the property tax on the land. Even at $300/acre rent it pencils out to $6000/acre over twenty years to rent it but with NO property tax, and of course rent is directly deductible.

My most expensive ground is $205/acre, so that makes owning even harder to pencil out.

The other problem I see, if you buy ground, and as it disappears whats left will go up in value, as it goes up in value so does yours which means even higher property taxes.


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## Vol (Jul 5, 2009)

MIHay said:


> As a young farmer with only about 10 acres of tillable land owned by my family, the issue I am facing now is finding more ground. To add to the issue, every year more and more farmland is being split up and sold off for development, making it even more competitive to get ahold of any available land. Every now and again there is land that comes up for sale (happens far more often than land popping up for rent) and im wondering if it would be profiable to buy land instead of renting. Keep in mind that with the rate of development in the area any land for sale is pretty expensive. 15 acres just cane up diwn the road for about $8000/acre. Half is wooded the other half is tillable. Anyone have any comments/advice or experience with similar issues?


The hardest thing to do for most folks is to relocate. If you are wanting to "farm to own" you will need to relocate where you can purchase land for less than half of what came up for sale "down the road" from you. You said you are young....do you ever dream about living somewhere else in particular? Or do you see areas that make you say that " I could live there?" If so, now is the time.

DO NOT be afraid to relocate.....you will not believe how short life is, but you will soon find out. Dream on. Good luck to you.

Regards, Mike


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## MrLuggs (Dec 14, 2015)

You could come out near Stockbridge, lots of tillable land for 3500/ac


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## hog987 (Apr 5, 2011)

I do like owning some land for security and peace of mind. Rented land comes and goes. But i also farmed for 15 years in totally rented land before i bought any. Now less than 1/4 if the land i farm is owned. Rest is rented.


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## MIHay (Jun 4, 2018)

Mlappin, that is basically what ive been figuring as well, the only plus really would be that everything is on your own terms and you never have to worry about having the ground taken away, but at the end of the day the ridiculous increase in overhead cost is just a little overwhelming. I couldnt imagine what it would be like to have been around when you could buy huge chunks of land for very little, or better yet have it passed down to you through the family. As to Vol’s advice that does seem to be the best option. There is a decent amount of land not too terribly far from home, but unless I were to relocate several hours, I would probably still be in a highly conpetitive area. To be honest I dont think id want to up and move from where the majority of my family is either. Ill just have to play it out and see where it takes me. Makes me wonder though some day when all the land is developed if anyone will look around and say hm I wonder where all the farmers went?.... Thanks to all for the input, it is greatly appreciated


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## haybaler101 (Nov 30, 2008)

I just wish my dad and grandpa would have had some balls and took a chance and bought land in the 60’s and early 70’s. Could have had at least a thousand acres adjoining what I already have and they could have bought it for less than the cash rent would be today and either paid cash for it or paid it off within 5 years. Instead, they bought 25 acres!


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## Bishop (Apr 6, 2015)

If you aren't married, then find someone with land and start writing the love letters. That's what my wife did. I came with 70 acres.


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## MIHay (Jun 4, 2018)

haybaler101 said:


> I just wish my dad and grandpa would have had some balls and took a chance and bought land in the 60's and early 70's. Could have had at least a thousand acres adjoining what I already have and they could have bought it for less than the cash rent would be today and either paid cash for it or paid it off within 5 years. Instead, they bought 25 acres!


Yeah talk about a missed opportunity. From a few videos I have seen on youtube it seems like that is the case with some of the older tractors from the 60s-80s. Some of the low production models seem to be gaining value after being pretty cheap years ago. If only we had a crystal ball...


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## BWfarms (Aug 3, 2015)

At the tender age of 19 I moved 1400 miles from home. I left NC for SD, leaving behind land deeded to my surname since 1753. I almost bought a farm in SD at 27 with a good job to offset things. Grandpa passed away, I wanted to be near Granny (who is still here), wife had a new degree, her folks retired to Texas... I said it was time to go home.

I saw first hand that raising cattle in NC was far easier than SD. I loved the work on the wife's family's farms and ranches and the lessons. Had I been strictly a sod buster SD would have been the way to go but I have cowboy in me. Sometimes I consider moving back even though I spent the last 7 years on family land. Dad was mad that I left SD, he enjoyed it himself and I love the state.

I love my family but I never feared living away. I'm still trying to figure out how to have 2 operations 1400 miles apart. I wish SD was only 2 hours away, hell I'd be good with 5 hrs. Who knows I may just move back.


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## mlappin (Jun 25, 2009)

haybaler101 said:


> I just wish my dad and grandpa would have had some balls and took a chance and bought land in the 60's and early 70's. Could have had at least a thousand acres adjoining what I already have and they could have bought it for less than the cash rent would be today and either paid cash for it or paid it off within 5 years. Instead, they bought 25 acres!


Dude, my father could have owned several full sections around us, however when it was offered to him, he wasn't even sure where the first bag of seed corn was coming from, that was in March of '74. And yah, what it was offered for was less than rent and crop insurance per acre now, however, who could have guessed that land would be more per acre now than they made in a year then.


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## StxPecans (Mar 3, 2018)

South east arizona has cheap land with good water. Just wonder how long the goverment will allow them to pump. Anyone here farm that area? My dad says its where to be, but what a gamble.


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## Dan_GA (Dec 29, 2015)

If you can afford to buy the land, buy it! There are a few things to consider: "They" aren't making more, and if this thread does anything it tells you that it's a good investment. Yes, you'll pay more than renting, but at the end of those 20 years of renting; you have nothing. If you had purchased it, you would have at minimum tripled your money, and could sell it all and retire to wherever you want or pass it to your kids. Bottom line; purchased land is an asset and a good investment.


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## woodland (May 23, 2016)

haybaler101 said:


> I just wish my dad and grandpa would have had some balls and took a chance and bought land in the 60's and early 70's. Could have had at least a thousand acres adjoining what I already have and they could have bought it for less than the cash rent would be today and either paid cash for it or paid it off within 5 years. Instead, they bought 25 acres!


And at the time they probably thought they were maxed out or that it was priced too high. Every time we've bought land it always seemed too expensive at the time but in hindsight it's always the best investment ever made. The first three quarters my folks purchased in '79 were $100/ac and last year we paid $4000/ac. I don't like making rent payments but have never begrudgingly made a mortgage payment.


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## swmnhay (Jun 13, 2008)

Hind sight is 20-20 and looking back there were good times to buy land and times it broke people.Land was $325 acre here in 1968,$1400 in 1975. Peaked before the 80's crash at $3000.Fell to $800 in the 80's.Went over 10,000 a few hrs ago.It's backed off about 2000 off the high.

Interest rates are huge determining factor of what the land payments are.In the 80's when interest skyrocketed if you bought on the high before interest took off it became impossible to cover the annual interest and that's what broke a lot of guys.

Property tax has become more of a issue now with ever increasing government spending.

Looking back I couldn't afford the interest on $800 land in the 80's but $2400 land in the 90's cash flowed quite well with lower interest.But I had overly conservative banker.Looking back I should of switched banks at the time and bought more land then.It be worth 10,000 today and pd for.

Land bought in 90's here would of appritiated 400% in 20 yrs and now would be pd for with 10% return annually in rental income/ or if still farming be farming it rent free.Hard to beat that return on investment.

Going forward looks like interest is rising,poor commodity prices and quite honestly I can't see land prices going up the next few yrs anyway.I thought land would actually fall back more then it has.


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## Vol (Jul 5, 2009)

It is all relative....always has been and always will be. It is that some times are more opportunistic than others. I do not begrudge my ancestry for the land choices they have made. My father was the youngest of 9 children and was born very late in my grandmothers child bearing life. My grandfather sold off 1200 acres of his farm during the Great Depression for .25 cents per acre. I do not begrudge him for it.....he was trying to survive and provide for his large family.

As far as owning land, there are two things that really matter and they are being healthy and happy. What good does all the land in the world do you if you are unhealthy and not happy. Having joy is the ultimate....and it doesn't come from land.

Regards, Mike


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## StxPecans (Mar 3, 2018)

I think land is normally a good investment. But if the land is irrigated and due to goverment bs you no longer can irrigate then land value will go down.


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## MIHay (Jun 4, 2018)

The 15 acres that just came up down the road is in a good location so i was thinking that later on it would probably be worth a little more. The asking price on it is about $8000/ acre and that seems to be the typical going rate here. I would probably want to make hay on the tillable ground, but about at least half of the property is wooded. I wanted to go theough it to see what kind of trees it has because if there is a lot of oak it may bring a pretty penny to log it and then just run cows or goats over the stump ground. My thinking is that if we could buy it and somehow make the payments, by the time it is paid off in 30 years or whatever id have something to put towards retirement, or maybe keep in the family if I dont need it. Farming is not my profession and im going to school for bio premed currently, so its not like id be too concerned about coming up with the money, its just the first 10 years or so that ill have to work my ass off. Undeveloped land is quickly becoming a thing of the past here, and I think it would make me more happy to have to find a way to come up with the cash to own land I can call mine than to let it go and see some city people move out to the “country” and split the lot and build 3 houses


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## Hayman1 (Jul 6, 2013)

Vol said:


> It is all relative....always has been and always will be. It is that some times are more opportunistic than others. I do not begrudge my ancestry for the land choices they have made. My father was the youngest of 9 children and was born very late in my grandmothers child bearing life. My grandfather sold off 1200 acres of his farm during the Great Depression for .25 cents per acre. I do not begrudge him for it.....he was trying to survive and provide for his large family.
> 
> As far as owning land, there are two things that really matter and they are being healthy and happy. What good does all the land in the world do you if you are unhealthy and not happy. Having joy is the ultimate....and it doesn't come from land.
> 
> Regards, Mike


Couldn't agree with you more Mike. We often get focused on the wrong things that ultimately do not bring joy and that is really what sustains us.

I have done really well in my real estate transactions over my life, partly out of dumb luck, partly because I paid attention to the tea leaves. Steadily moved up the housing and property curve until I was able to afford my little farm which is a little over 30 ac but provides plenty of base to use land by rental or other agreements in the neighborhood. Got up to about 100 ac max which is a lot of hay to make if you have a 9-5 job 45min one way to factor in. But it is mine and it is my base and sustains me every day. Would have loved (or so I have thought) several sections in the corn belt of 180+bu corn land but really can't imagine being more happy than I am with my wife at my side and daughter and family less than a mile away. Grandson's baseball games are the best,.


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## Frantz (Feb 18, 2018)

I married a farmers daughter and it's been awesome (agriculturally and because my wife is pretty awesome and tolerant of me). I don't do any farming with the land her family owns but her dad lets me keep my equipment there and we rent out part of the farmhouse much lower than rent would be off the market. She's lined up to inherit and her dad lives next door so I view it as a future investment and it will work out well for him as we'll be there to help him out as he ages.

Now my farm land I use is all rented/bartered for. I have about 15 acres I get for free and 40 acres I'm splitting the profits with, but also splitting any inputs on. The free land is what it is, owner bought it as an investment property and just wants the land cared for. I offered to help with any equipment needs he has, but it hasn't been called upon yet. The 40 acres would have been grabbed by someone else but the owner doesn't want any sprays at all. So it's organic but hasn't been well cared for. We're going to try to improve soil fertility, but it's a long process. The moral here is, if you are more than flexible, you can often get in with land under less than ideal conditions, but for far less money! For me and my personal situation I can't afford much more than I've already invested. So I'm glad to play clean up in my area and build a good reputation for my farm and it's services.

I'd love to own land, but that would tie up money that otherwise can go to better immediate improvements to my operation. I'm half counting on settling here, but know not to put my eggs in the basket of assumption. For me, focusing on the skills needed, equipment improvements, and market knowledge needs to be my focus, and with that I could relocate somewhere else if it came down to it and find success easier.


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## Hayjosh (Mar 24, 2016)

MIHay said:


> its just the first 10 years or so that ill have to work my ass off.


 I'm a youngish 'farmer' (really, a hobby hay farmer that's not completely ignorant and not running antique equipment) in SW MI, who also happens to be a scientist/researcher in big pharma (14 years now). So I'll just dispell this notion in your head that it's only the *first* 10 years or so that you'll work your ass off. LOL, if only it worked like that. Yeah, you'll work your ass off, but then you'll only work your ass off even more after that.

I work my day job (scientist/project team leader). Then I come home and work until it's dark out. I've been putting fence up in the dark before, built a shed by the light of my truck headlights, and mowed my yard by the light of my mower headlights. There's never enough time in the day.

In my area (SW MI Kalamazoo) I live in the country, own just 11 acres myself, but there's lots of acreages around me where people might own 15-20 acres or so, where 7-20 acres of it might just be open field that they do nothing with. It doesn't pencil out for me to own the land *just* for the sake of farming. For what I rent it for ($50-80/acre and some acres are free) I don't see how it's even worth it to the landowner; it doesn't even cover all the property tax in some cases. Buying the land with the intention of selling it off as an investment some day is probably never a bad purchase in most cases if you actually have the moolah, however in my case I live in a desirable school district and I'm 1/2 mile from a very nice lake surrounded by million dollar homes, so property here is going for about $15k/acre.

In your case however, you're going to be saddled with debt from your undergrad studies and then med school studies, and then you're going to get married and pay way too much money for people to party on your dime for 4 hours, and then you're going to buy a house and take on even more debt, and then you're going to have kids (maybe?). So the moral of the story there is it will take you awhile to get out of your debt, so consider potential land purchases in how much debt you want to have. If you're taking on land to farm then you're probably taking on debt from the equipment as well, and unless you're taking on a lot of acres it's a really slow pay off.

My brother is an architect who just started his own firm and is getting into real estate and development, and if there's anything I've learned from watching his investments is to get into commercial real estate, not residential.


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## IHCman (Aug 27, 2011)

Myself I'd rather buy rather than rent. Its already been said in previous posts but when you rent all your life you have nothing at the end but if you buy land you'll have that ground paid for to rent out or sell.

I do see alot of guys here that rent all or almost all of their pasture. Sometimes I think they're smarter for renting it rather than owning it. Here the owner sprays the noxious weeds and generally has to keep the fence up. So the owner of the land gets all the work and they guy renting it just turns his cows out.


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## swmnhay (Jun 13, 2008)

A neighbor told me buying land is like a forced savings account.You have to make the land payment every yr.

And some day the payments end and dividends of owning it skyrocket!


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## swmnhay (Jun 13, 2008)

Moving cutter last night driving by a farm that sold couple yrs ago.They had rented it for 30-40 yrs,owners passed away and now they had to buy it at auction.

The way the ball bounces sometimes!


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## somedevildawg (Jun 20, 2011)

Land is always a good investment, if you can afford it.....but it's certainly not the end-all, be-all. 
And the notion of leaving it to your heirs is not my idea of fun.....
Just because I'm into farming doesn't mean my off-spring will be, while they may not chose the 
Lifestyle, they may choose to keep the land to rent or they may choose to sell it.....whatever they want to do with it is fine by me. I would hope that I've taught them what they need to know to be successful in life, and land and wealth isn't one of the pre-requisites.....
I currently own about 10% of the land I farm, but I also have first right of refusal on most of my rented ground.....


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## woodland (May 23, 2016)

somedevildawg said:


> Land is always a good investment, if you can afford it.....but it's certainly not the end-all, be-all.
> And the notion of leaving it to your heirs is not my idea of fun.....
> Just because I'm into farming doesn't mean my off-spring will be, while they may not chose the
> Lifestyle, they may choose to keep the land to rent or they may choose to sell it.....whatever they want to do with it is fine by me. I would hope that I've taught them what they need to know to be successful in life, and land and wealth isn't one of the pre-requisites.....
> I currently own about 10% of the land I farm, but I also have first right of refusal on most of my rented ground.....


You mentioned first right of refusal...... is that common to have that on rental ground? Up here it's very uncommon to have that option available which means owning is preferred. The only land we have first right of refusal on is some that the neighboring coal mine bought from us a couple of years ago.


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## swmnhay (Jun 13, 2008)

woodland said:


> You mentioned first right of refusal...... is that common to have that on rental ground? Up here it's very uncommon to have that option available which means owning is preferred. The only land we have first right of refusal on is some that the neighboring coal mine bought from us a couple of years ago.


it means very little HERE except that if someone else offers say 10,000 per acre you can match it but then what usually happens is the guy that offered 10,000 now offers 10,100.I seen it happen many times where someone retires and sells the acreage to someone else and rents them the farm ground surrounding it.10-20 yrs later they decide to sell,BTO wants the farm so he just keeps raising his offer until you bow out of the bidding basically.So it still goes to the high bidder and the rite of first refusal don't mean crap usualy


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## somedevildawg (Jun 20, 2011)

Well, that could be the case I suppose....for my situation, the seller would auction the land and I have first right of refusal at that time. That would be the proper use.....at auctions I've attended, the person with the first right of refusal could buy the property for the amount that it auctioned for.....in some cases that didn't happen, but in one case it did and that's what got me thinking about it.....I dump a lot of money into these peoples ground every year building fertility at least is should have the opportunity to buy the property for the highest bid if it comes to auction, that's all I really care about. I have a number in my head, if someone's willing to pay more, they can have it.....
In conjunction, I have also let it be know that I am a potential buyer if they should decide to sell before then.....
On one field, a 50 acre field, I have a lot of money invested.....ill pay more for that land than anyone else (within reason) to recoup/retain some of my investment.


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## Frantz (Feb 18, 2018)

woodland said:


> You mentioned first right of refusal...... is that common to have that on rental ground? Up here it's very uncommon to have that option available which means owning is preferred. The only land we have first right of refusal on is some that the neighboring coal mine bought from us a couple of years ago.


It depends on the relationship and situation. If you're helping older folks out who want to see the land preserved and they've grown to trust you, they may well give you first right and maybe even a better deal. Not everything is about getting as much money as possible for many good folks. If you're just commercial farming and writing them a check each year they probably couldn't care less if you get it or someone else gets it. I've been offered the one farm I used to work at a buy but it just wasn't want I wanted to sink into at the time (read, I couldn't talk my parents into it, whom I would have needed to get credit for something that large). Some of the land I work now would likely be a different story. As I said before though, It's much cheaper for me to barter/rent, so I'm hoping the land owner lives an awful long time for financial reasons as well as the fact that she's become a friend.


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## woodland (May 23, 2016)

Frantz said:


> It depends on the relationship and situation. If you're helping older folks out who want to see the land preserved and they've grown to trust you, they may well give you first right and maybe even a better deal. Not everything is about getting as much money as possible for many good folks. If you're just commercial farming and writing them a check each year they probably couldn't care less if you get it or someone else gets it. I've been offered the one farm I used to work at a buy but it just wasn't want I wanted to sink into at the time (read, I couldn't talk my parents into it, whom I would have needed to get credit for something that large). Some of the land I work now would likely be a different story. As I said before though, It's much cheaper for me to barter/rent, so I'm hoping the land owner lives an awful long time for financial reasons as well as the fact that she's become a friend.


Sounds like you got some long term/reasonable landlords. Good deal????


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## kurt1981 (Apr 18, 2017)

12 billion coming out of the government teat. go ahead and buy it..


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## mlappin (Jun 25, 2009)

Frantz said:


> It depends on the relationship and situation. If you're helping older folks out who want to see the land preserved and they've grown to trust you, they may well give you first right and maybe even a better deal. Not everything is about getting as much money as possible for many good folks. If you're just commercial farming and writing them a check each year they probably couldn't care less if you get it or someone else gets it. I've been offered the one farm I used to work at a buy but it just wasn't want I wanted to sink into at the time (read, I couldn't talk my parents into it, whom I would have needed to get credit for something that large). Some of the land I work now would likely be a different story. As I said before though, It's much cheaper for me to barter/rent, so I'm hoping the land owner lives an awful long time for financial reasons as well as the fact that she's become a friend.


Better get that in writing, it was understood we had right of refusal on the 70 acres next door. Always had the feeling it should have been in writing with a set price, but how do you tell someone in their 80's your pretty sure their only child is a greedy little prick that's gonna screw you over to make an extra nickel?


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## CowboyRam (Dec 13, 2015)

kurt1981 said:


> 12 billion coming out of the government teat. go ahead and buy it..


I just wonder how much of that 12 billion will actually go to the farmer.


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## hillside hay (Feb 4, 2013)

I know a local bto that'll get a fair share of it. Of course he pals around with our senator so .... naturally.


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## kurt1981 (Apr 18, 2017)

Nurse till your eighty


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## Sevastianun (8 mo ago)

It is very sad to read stories that lands that could be very fertile and bring food to people are now being actively built up with commercial real estate. A few years ago, I realized that I could no longer live in an industrial city and decided to buy myself a small piece of land. I realized that I wanted to live in a completely new place and bought this land in Mississippi here, I feel calm and happy. I hope that the global food crisis will make people think about the importance of farmland.


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## Markpnw (Dec 27, 2019)

Bishop said:


> If you aren't married, then find someone with land and start writing the love letters. That's what my wife did. I came with 70 acres.


Not a bad thought haha


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## Markpnw (Dec 27, 2019)

Where I’m at I most the land I farm are smaller chunks of ground where it was bought and the y built a house and don’t care about the rest. So I stroll in and offer free weed care for free farming. That’s another good option. If you can afford ground you should buy it because it’ll only grow in value and it’s a great investment. Especially if you can get family to pitch in you can get big cash discounts.


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