Since its construction in 1940, Lake Greenwood has become a valuable asset of the local community as well as for the entire Upstate of South Carolina. This 11,400 acre lake, which is the main water source for Greenwood and much of Greenwood County, also serves as a hub for a number of recreational pursuits which have fostered significant population and economic growth in this region. History has revealed that both positive impacts and challenges result from increased levels of population and economic activity in a given area – and the Lake Greenwood community is no exception to this rule.

According to the Saluda-Reedy Watershed Consortium (SRWC), “a broad based coalition of universities, non-profit organizations, government agencies and private businesses which have conducted a wide range of research on Lake Greenwood and its watershed”, several obstacles concerning water quality must be overcome in order to ensure the future health of Lake Greenwood. The 745,600 acre Saluda-Reedy Watershed (SRW) and Lake Greenwood have a long history of dealing with unwanted effluents. For decades the Saluda River and the Reedy River carried away many types of wastes from growing industry and development in the Upstate. The implementation of regulations on unwanted industrial effluents such as the Clean Water Act of 1972 made a major impact on the current water quality of the SRW and Lake Greenwood. However, Lake Greenwood and the SRW currently face new health threats – the SRWC has identified sediment from upstream development, stormwater runoff, and phosphorus from wastewater discharges as the main causes that affect the cleanliness and levels of water in Lake Greenwood.

A study by the SRWC reports that 307 acres of Lake Greenwood has been lost to sedimentation in the upper part of the lake. If this process continues there is the potential for negative impacts such as the loss of waterfront land, harmful pollutants, and decreased boat and recreational access. Major algae bloom, which Lake Greenwood experienced in 1999, is another real threat…

“[w]hen an overload of phosphorus and nitrogen are introduced to the lake, algae growth can increase to an uncontrollable level. As the algae dies and sinks to the bottom, the decay process consumes a substantial amount of dissolved oxygen. A combination of low bottom-water oxygen levels and high surface water temperatures that often occur in the summer can leave many fish and other aquatic life with little or no suitable habitat.”

Land use along the shore of Lake Greenwood is another critical aspect of the water quality. Some lakeside development produces soil erosion, loss of shoreline vegetation, and toxic runoff which contribute to poor water quality.

This research makes a strong argument that the health of Lake Greenwood is in jeopardy. Growth and development in upstate South Carolina have once again reached a level that is causing detrimental impacts to Lake Greenwood. However, these findings also shed light on the implementation of proven methods that helped Lake Greenwood overcome water quality problems forty years ago. Although government regulations and policies like the ones implemented in the past are part of the solution, they are not the only effective measures to help improve the water quality. Conservation easements on properties within the Saluda-Reedy Watershed can have a major impact in the effort to improve Lake Greenwood’s water quality. These properties consist of those with Saluda & Reedy River frontage as well as lake front parcels and the preservation of land within this watershed will have a direct effect on reducing the amount of pollution that enters Lake Greenwood.

In addition to qualifying for conservation easements, large acreage tracts with significant frontage on Lake Greenwood are unique pieces of real estate with regards to the current real estate market. Unlike large timber and recreational tracts in this area, a strong demand for lake lots is in place resulting in stable values throughout the economic downturn. This market indicator reveals that undeveloped lake frontage has good investment potential from a lake lot development perspective. A savvy investor should recognize the enhanced investment potential of a large acreage tract with significant frontage on Lake Greenwood. A property with these features offers significant tax benefits through a conservation easement on designated areas as well as mitigation opportunities for sustainable lake lot development. In addition, the stark contrast of the current market for lake lots and large acreage recreational and timber tracts allows an investor to assess the value of a large acreage tract with significant lake frontage from two separate vantage points which is advantageous.

Lake Greenwood is a treasured resource of Upstate South Carolina and for the last seventy years this lake has contributed to the economic growth of the area while also facing water quality challenges. This constant struggle is a familiar story for waterways and wetlands across the southeast and the decision to sacrifice clean water for financial returns and vice versa is never easy. Fortunately, in some circumstances the two are not mutually exclusive. Sustainable development, if implemented properly, can facilitate the co-existence of clean water and financial returns given certain market trends and property location. These conditions currently apply to large acreage tracts with significant undeveloped lake frontage on Lake Greenwood resulting in a rare opportunity to assist in the protection of Lake Greenwood with a positive return on investment.

Landownership means owning more than “just land”; it means owning a “bundle” of rights associated with a particular property. In this economic climate many people are considering making an investment in rural land or are looking for ways to justify purchasing a recreational tract.

I always recommend having an exit strategy when buying land in the event that you need to sell your property in the future. It is also wise to evaluate what potential sources of income your prospective purchase can generate. If you were to split off pieces of your ownership bundle and lease or sell them, you could generate income and help with the carrying costs associated with your land. Here are some ideas about the pieces of your bundle of rights that can be sold or leased.

1. Hunting rights - Big game, deer, turkeys, dove, squirrel, you name it, someone hunts it. In Alabama owners are leasing their land to hunters for $6 to $17 per acre.

2. Timber - Timber can be thinned, harvested, or leased. One great thing about a timber investment is that it has the potential to generate some income with some frequency depending on the site index, species, and age of timber.

3. Mineral and Gas rights – This can be a boon for a landowner if the lessee finds something of value. Exploration companies will often pay an up-front fee per acre for 5 to 10 years for the right to retrieve minerals or gas from your land. Royalties are paid to the owner if extraction is undertaken.

Desirable minerals and gases would include: oil, natural gas, coal, coal-bed methane, chalk, clay, gravel, chert, river rocks, iron, gold, silver, fill-dirt, and numerous others.

4. Conservation Easements- Wetland mitigation, native forests and grasslands, and many other options are available to consider placing your property into a conservation easement for tax benefits

5. Renewable Energy Potential – Solar, mini-hydroelectric generation, wind, and geothermal

6. Cellular phone tower, radio tower, electric utilities, and natural gas transmission lines - These entities pay to lease a portion of your land to further their corporate mission. Payments range from monthly to once every 40 or 50 years.

7. Carbon Sequestration Offsets

8. Cropland, Pasture, Livestock Grazing land – Cash rents in Alabama range from $25/acre for hay cutting to $90/acre for agricultural cropland

9. Fishing

10. Renting out your lodge or hunting cabin

11. ATV, horseback, bicycle trail riding, and hiking

12. Mud bogging and off-road competitions

13. Landing Strip

14. Water rights from wells, streams, or rivers

15. Billboards and advertisements

16. Birding and wildlife observation

17. Caves, waterfalls, or other natural formations that are of public interest

18. Weekend flea market

19. Boarding Horses or other animals

The preceding list was meant to jumpstart your thoughts about the potential of leasing some of the rights associated with your property. It is by no means exhaustive, but my aim is to show that there are ways to help generate some income from your tract.

Thinking creatively and looking for opportunities can pay significant dividends. I heard of a landowner in Alabama near a car manufacturer that was approached about leasing some of his land to the manufacturer for them to park some of their excess inventory for a few months while they waited on vehicle sales to pick up.

Be sure to weigh all of your income-producing options when evaluating a prospective purchase. This is one way an experienced land agent can assist you by providing information about potential revenue sources. You just might find that purchasing a rural property now is a reasonable and justifiable investment.

Over the years, I’ve become less enthusiastic about conservation easements as they apply to timberland.

Among the mixed bag of reasons for my unease are:

1. Deliberate inflation of timber value to inflate the size of the easement value to inflate the size of the tax benefits available to the landowner;

2. Questionable assignments of environmental value to certain timberland tracts, which is the first hurdle in qualifying land for conservation-easement status;

3. Overly strict restrictions on cutting timber that have little, if anything, to do with protecting the environmental values of the tract;

4. A bias toward applying wilderness (“forever wild”; no-use) standards to non-wilderness lands in a way that doesn’t benefit the environmental values that should be protected;

5. Easement donors who don’t fully understand the long-term financial implications for spouses and heirs of severing a valuable, appreciating right in a property, particularly when it’s one of their principal financial assets;

6. Revenue loss for local governments that reduce assessed property value to reflect the donation of the easement; and

7. Long-term reduction in the amount of land capable of producing wood products, broadly defined, which may or may not affect timber supply and prices in the future.

Still, I endorse the use of conservation easements for certain types of timberland and other lands. I work with clients who use them as part of their acquisition strategies. I’m not opposed to leaving private lands completely free of human intervention, though I think that usually carries the notion of protection too far and winds up putting important environmental values at risk.

While it doesn’t address some of the issues I’ve listed above, a Working Forest Conservation Easement (WFCE) does address several important ones. A WFCE envisions timberland to be managed for timber production over a long period. This can involve annual timber-sale income in the case of a very large tract or income spaced, say, every 15 or 25 years, for smaller tracts of mixed-age, mixed-species woods. The emphasis is on long-term returns from sustainable management rather than a short-term emphasis of maximized revenue. Use restrictions that would impede managing the woodlands as a working forest are not imposed.

The rights that the WFCE limits relate to residential and commercial development. The value of these rights depends on the location of the property and other factors, but it could amount to as much as 50 percent of current fair market value. The value of the easement would typically include the estimated value of the development rights (residential, commercial, mineral) foregone along with the foregone value of merchantable timber not cut in the short run.

One version of a WFCE was developed to protect and work with about 2,200 acres of California redwoods in the Van Eck Forest. The concept was pioneered by the Pacific Forest Trust (PFT) whose goal is to preserve productive private forests for all their public benefits—the delivery of wood, water, wildlife and a well-balanced climate. PFT incorporated carbon storage in its management plan for both climatic and financial reasons. The forest generates income from the sale of both timber and carbon credits. (Laurie Wayburn, “THE VAN ECK FOREST: Carbon Markets and the New Economic Paradigm for Forest Sustainability,” in James N. Levitt, ed., Conservation Capital in the Americas: Exemplary Conservation Finance Initiatives, Lincoln Institute of Land Policy/Island Press, 2010)

A WFCE generates income for the landowner; maintains significant, appreciating value for heirs; incorporates environmental values into its timber-management plan; continues timber production from a renewable resource in a sustainable manner; and offers the option of generating income from the timberland through carbon credits and hunting leases, if desired.

Making arrangements for the sale of the landowner’s timber-stored carbon is a critical part of the PFT’s approach. It’s cumbersome and costly for small landowners to work through the Chicago Climate Exchange, but it’s possible…and it may become easier in the future.

I emailed a request for more information.

The broker faxed me materials related to the property’s features, boundaries, topography, deed and a…conservation easement.

I read through the 12-page easement.

The seller’s easement had stripped out almost all of the land’s intrinsic (economic)  value. The woods could not be “commercially harvested” under any circumstances. This included salvage sales in the event of a hurricane or gypsy-moth mortality; firewood sales from broken trees or single blow downs; sale of timber that could arise from a power-line easement being forced on the landowner; or sale of timber from improving wildlife forage opportunities. Trees could not be cut to control fire on the property. It appeared to me that the easement prohibited the owner from paying a caretaker/watchman in downed firewood, since that arrangement could be converted into dollars and, hence, amount to a commercial sale.

The easement did not prohibit having a chainsaw on the property, but it essentially eliminated its use for anything other than gathering personal firewood. It was questionable whether an owner could use a chainsaw to remove downed trees over the property’s interior roads, even though removal would facilitate low-impact recreation like hiking and bird-watching, not to mention making the property safer in terms of fire suppression and emergency rescue.

The easement allowed one division of the property. It also allowed one small house to be erected on one — but not both — of the parcels. It did not say whether a utility easement could be cut through the woods for an overhead line. It did not say whether trees taken down to develop a new road or power-line easement could be sold. It did not say whether a new road or power line could be installed at all. The easement neither authorized a sale of road/utility easement timber nor prohibited it. In that event, the conservation organization that held this easement in perpetuity would make the call in the spirit and text of the easement as a whole. I’d interpret that as a future NO.

All commercial uses of the property were prohibited, including agriculture of any kind. The owner could not sell a mushroom or ginseng root. He could not plant an organic herb garden on 100 square feet and sell the herbs He could not lease the stream for fishing or the trails for horseback riding. Hunting, of course, was also prohibited.

The seller undoubtedly believed that he had conserved the property forever as he saw it in 2005. Easements can’t stop the inevitable changes in land that work sometimes for the better, but sometimes for the worse. An easement doesn’t lock land in a time capsule.

The seller had burdened the land with over-the-top use prohibitions and taken the maximum amount of easement tax benefit against his then-current income. Maybe it made sense to him when he did it, but I expect he might have second and third thoughts about it today.

I heard that he had tried marketing the property at about $1,750/a, then dropped the price in painful steps down to $875. I might have been a buyer at $100/a, but I would have stretched my judgment to get even there.

This seller had, in my opinion, taken a preservation-type conservation easement beyond where it needed to be to preserve the environmental health and integrity of his property. The seller bought into the idea that if some restrictions are good, a ton of them are better. Proof of this proposition is debatable.

A less restrictive easement would have retained considerably more sale value in the dirt.

If you’re planning to sell land, I advise that you be very careful in designing a conservation easement. Balancing your short-term tax benefits, environmental values and sale expectations is the goal. Imbalance brings its own penalties.

The seller of a conservation easement is a landowner who desired to restrict development or land use through this option, but still holds on to ownership of the land.

The buyer or recipient of a conservation easement is typically a government conservation program or a private conservation organization. While the landowner seller has specific benefits that make a conservation easement desirable, the buyer or recipient too reaps benefits from this type of transaction.

Five Benefits to Buyers or Recipients of Conservation Easements
•    The buyer or recipient can protect more land resources with fewer dollars by buying rights to the land and not the land itself.
•    The buyer or recipient obtains land by way of the conservation easement that might otherwise be unavailable (for example, the landowner isn’t selling the land outright, but is interested in a conservation easement).
•    The land continues to provide economic activity.
•    The land stays on the tax roll.

Conservation easements benefit all involved. The landowner controls the land, the conservation buyer or recipient is assured that the land will not be developed, and often, the public is the greatest benefactor through preserved recreation areas and enjoyment of natural lands.

For more information on conservation easements, land, commercial, industrial properties, and land and resource management, please visit www.saundersrealestate.com or call Dean Saunders at 1-877-518-LAND.

What are the specific benefits to the landowner? Below is a list of eight of the general benefits for considering a conservation easement:
• The landowner maintains control and ownership of the property.
• Each conservation easement is individually structured to meet the needs of the landowner, along with the conservation criteria, and can be structured broadly or specifically.
• The landowner keeps the land and receives payment for the appreciated value caused by development pressure.
• The landowner assures the property is protected for future generations
• The landowner continues to receive income from his/her land.
• The property may be sold and the restriction travels with the property.
• Future generations are assisted in the transfer of the land by favorable estate tax treatment.
• Landowners may gain income tax advantages.

Most landowners are interested in tax advantages when considering a conservation easement. Landowners may receive income tax advantages that include gifting, tax deferred exchanges, and gains used against the basis value. Tax advantages can also assist in the transfer of property from generation to generation and can lower estate taxes for heirs by maintaining the agricultural classification of the land.

A generational transfer may benefit a landowner by lowering the value of the property for estate tax purposes. This happens because after the rights to develop it are sold, the highest and best use of the land is usually agricultural.

Gifting is a using the conservation easement as a donation to the government or to a qualified conservation organization. Gifting is treated as a charitable contribution and results in lower Federal income tax.

A Tax-deferred Exchange is an option allowed by the IRS for landowners who owe capital gains taxes because of the sale of property. This defers paying the tax by purchasing another piece of property instead of paying the tax. Known by several terms, a tax-deferred exchange is often referred to as a Like-kind Exchange or a 1031 Exchange.

The IRS allows a tax exchange for owners who have a capital gain because of the sale of a conservation easement. In my award-winning booklet, “We Create Solutions for Landowners: A Primer on Conservation Easements,” see case study #1 for an example of how this might work for you.

Gains Used Against Basis includes basis as the amount you paid for the property, plus the value of any capital improvements, less any depreciation claimed. If you sell a conservation easement, the IRS will allow you to reduce your basis by the amount of the conservation easement, which may result in you not paying any capital gains taxes. In my award-winning booklet, “We Create Solutions for Landowners: A Primer on Conservation Easements,” see case study #2 that uses this tax advantage.

To take advantage of a Federal income tax deduction, a conservation easement must be perpetual and given to a specific division of the government or a qualified conservation organization. Annually, the division or organization monitors the property to assure that the easement is not being violated.

For more information on conservation easements; land, commercial, and industrial properties; and land and resource management, please visit www.saundersrealestate.com or call Dean Saunders at 1-877-518-LAND.

What has been the experience of LandThink visitors with reductions (or lack thereof) in local property tax once a CE has been put in place?

CEs donate one or more rights in a property to a land trust or similar organization. This is done to conserve some environmental value–keeping land open or in agriculture, limiting or prohibiting development, protect habitat, etc. The donated right has a monetary value.

Are land owners with CEs getting their properties reduced in subsequent tax assessments to reflect the donation? Are there standard formulas? Are donors being treated fairly?

If your land is enrolled in agricultural land use or in a managed timberland program (both of which reduce property taxes), are CE lands getting an additional local property tax break?

What are your thoughts?

Sometimes that’s true. Sometimes, it isn’t.

If the seller’s something is not worth the discounted sales price, the buyer has bought a bad deal. This happens.

Knowing the difference between a good deal and a bow-wow depends on research and experience.

Land investors often find that their good deals are those where they’ve paid full price for undervalued properties, not where the seller reduces his asking price on an overvalued one. Such buyers know how to figure out when a property is under-priced, their sellers don’t.

Rural property has been appreciating more or less steadily for 20 years. But here are some recent examples of a bite looking for a buyer’s backside.

Corn land for $5,000 an acre. Let’s say you want to buy corn land because crop prices are projected to be strong as is demand for corn-based ethanol. Your choice might be: highly productive corn land (200 bushels per acre) priced at $5,000 per acre vs. so-so land (150 bushels per acre) priced at $2,500. Let’s assume that corn will fetch $3.40 per bushel into the foreseeable future and the farmer’s net will be $1.50.

Each highly productive acre nets $300 per year (200 bushels x $1.50), and each moderately productive acre nets $225. That’s a yearly net difference of $75.

Factoring out all interest payments, it would take 33 years to have the difference in net income from the highly productive acre pay for the difference in acquisition cost. If mortgage interest rears its ugly head, the pay-off time could easily double.

Corn is readily grown on marginal cropland, though it’s a little more costly. Still, my pencil suggests that the so-so land deserves a second look.

How much is deer meat worth? I’ve seen 200-acre hunting tracts — some woods, some open — priced in many places at $3,000 per acre and up…and up some more.

Assuming no immediate timber value on such tracts, does it make sense to spend at least $600,000 (not counting interest and taxes) for the chance to bring home $500 in venison every year?

Even if hunting is your way of life, this is probably not the best way to use your money. A sympathetic, blaze-orange accountant might suggest other options.

Hunting land can be leased, for $5 to $10 per acre. Renting 200 acres for $2,000 annually seems like a bargain.

Much public land is open to hunting for the price of a license.

Hunting preserves and guided hunts can be expensive, but are still more economical than buying an overpriced hunting tract.

Deer are everywhere these days, from the scungiest scrub in nowhere’s middle to my Aunt Lucy’s back yard in a Pittsburgh suburb.

If I absolutely had to own land for hunting, I’d look for something cheap, like fresh clearcuts and old strip mines, both of which provide good habitat.

$4,000/acre timberland. If you find wooded property that your consulting forester says will net $1,000 per acre, does it make sense to pay $3,000 per acre for what will be transformed into “cutover” land?

Maybe. It would have to be located close to a city, and the timbering would not significantly discount the land’s value for second homes. It also depends on the type and severity of timbering that must be done to get the $1,000.  Clearcut land is discounted far more than land where trees smaller than 16 inches in diameter have been left.

If you’re looking for timberland to manage for timber production, you can’t buy it at the price pegged for second-home buyers.

Land with a conservation easement. Many good reasons exist for a landowner to restrict the use of his environmentally important land in return for local, state, federal and estate tax benefits.

If, however, this property is a landowner’s principal financial asset, a conservation easement can turn into the good deed that never goes unpunished. How so?

First, the easement will reduce the market value of the property when it’s put up for sale. One hundred acres with development rights might be worth $1 million; without, $200,000. That $800,000 can buy a lot of medical care, retirement and college education.

Second, the easement knocks out many buyers who would otherwise be interested. You have to find someone who likes the conservation restriction you’ve put on the property.

Third, it reduces the amount of money that can be passed to heirs.

I’ve observed that conservation easements work best with families who have significant other assets to spend and pass on.

I’ve seen many easement properties initially priced as if they did not bear a limitation or prohibition on improvements, timbering or division. They should.

Some buyers, of course, are encouraged to think that a conservation easement adds monetary value to the seller’s land. Not true. (It does, however, add value to the neighbors’ lands.) The seller has pocketed the easement’s value.  It doesn’t convey to the new owner.

Ask an appraiser to estimate what a seller’s land is worth with its easement.

Severed minerals. If the seller is only able to convey surface rights, a buyer should proceed on tippy-toes, not ramming speed. The mineral rights — oil, gas, geothermal, coal, hard rock, clay — may be developed in such a way that the surface is devalued.

Buyers should pay less for surface-only land than for property that conveys with all rights intact.

Severed wind rights. Wind turbines are a sensible alternative to producing electricity from fossil fuels. Turbines, however, can discount the value of surface property, often by a lot.

Severed timber rights. Unless you are looking for cheap hunting land, don’t buy land whose timber rights have been sold.

Non-starter properties. I’ve looked into several dozen mineral properties over the years that were worthless, despite having large mineral deposits. Their problem was that their resources were poor quality, or they couldn’t be produced economically, or environmental factors prevented their development.

One seller had recently bought some 3,000 acres in Wyoming with a 100-foot-thick seam of coal for more than $30 million. He tried to flip it for $100 million until it became clear that the coal was so low in energy value that no customer would buy it. Maybe his acreage was really worth $3 million, soaking wet.

I had a seller tell me once that his property contained more than $100 million in timber, which maybe it did. But whatever the dollar figure, not a tree could be cut, because the state would not issue a timbering permit for this rare timber on this site. It pays a buyer to make some phone calls. The seller, I should add, had made the same call to the same state official that I did…before I did.

Conservation easements are powerful, effective tools available to landowners for the permanent conservation of private lands in the United States. The use of conservation easement options has successfully protected millions of acres of wildlife habitat and open space, keeping land in private hands and generating significant public benefits.

The primary purpose of a conservation easement is to give a landowner the right to protect his land from certain types of development or land use. This opportunity appeals to property owners who hold undeveloped land that is agricultural and/or has timberland, wildlife habitats, natural open space, and those with natural resources. Simply, a conservation easement is a restriction on the use of property similar to a deed restriction. It is recorded in public records and generally is in perpetuity. The government receives assurance that this valuable land will be protected from future development.

When you purchase land, you also purchase a bundle of rights. These rights include, among others, the right to develop, and the right to minerals and water. Collectively this bundle of rights is called “fee title.”

As a landowner, you also have the ability to sell some of these rights while maintaining ownership to the land. This is generally known as selling a “less-than-fee” interest. A conservation easement is a form of “less-than fee” interest and is a voluntary agreement that allows a landowner to limit the type or amount of development on their property while retaining private ownership of the land.

When you choose to give up some of these rights, by either donation or sale, you are compensated. The more rights you relinquish to the recipient, the more compensation you’ll receive, by either tax benefits or direct dollars, or both.

As a Florida native, born and raised in Central Florida, I have a strong heritage that appreciates the “old Florida” lands with their natural beauty and habitats. With progress and development of the past years comes the destruction of these lands in favor of buildings, roads, homes, and communities. Progress is needed to support our communities; however, today we find too few acres of “old Florida” and too few habitats for Florida’s unique wildlife.

My life’s work, first in the Florida legislature and now in real estate, has been closely tied to conserving Florida’s landscape through work in the legislative process and guidance to landowners for conserving their land. One opportunity we consider is a conservation easement. A conservation easement is recommended to my real estate clients when the property is right, meets qualifications, and the landowner desires a way to keep the property from major development.

As a member of the Florida Legislature from 1992 to 1996, I led the establishment of the Green Swamp Land Authority that resulted in the first Florida state agency ever created to purchase development rights from landowners. This work was instrumental in the passing of the law requiring Florida state agencies to purchase a specific number of conservation easements each year. Today, not only is the number of conservation easements being bought by the federal, state, and local governments growing, but also we see a demand from private conservation organizations.

Florida tourism and population boom have made land more valuable than ever. Some landowners would like to profit from the increased value, as well as preserve the beauty and function of their land. Others want their land to stay in the family, but worry that estate taxes will force their heirs to sell.

While many conservation easements are donated, others are also sold. If your land qualifies as a conservation easement, it is worth your time to research how this can benefit you and your family for generations to come.

For more information on conservation easements; land, commercial, and industrial properties; and land and resource management, please visit www.saundersrealestate.com or call Dean Saunders at 1-877-518-LAND.

Some are sold, but most are donated. They are usually sold or donated in perpetuity, though some have limited terms. Most easements are set up to preserve open space, restrict/eliminate development or keep farmland in agricultural use.

At the time of the donation, its value is calculated. The donor uses the value to receive, federal, state, local (property tax) and estate tax benefits. These are substantial.

The question I have is how should a buyer calculate the discounted value of a for-sale property burdened with a conservation easement?

Many sellers seem to think that a CE is a selling point and don’t like to discount their asking prices.

It’s often hard to find comps to use in a conventional appraisal.

I’ve been involved in several situations of this sort. It’s hard to agree on a valuation methodology.

What are your thoughts?