As we enter the final quarter of the year, it is a good time to take stock of our assets and review how we each manage our businesses. This is also a good time of year for a landowner or land manager to take time to analyze the current status of things in order to lay out a solid game plan for the coming year.
With that in mind, I compiled a top ten list of items to consider when managing land and what type of information is good to maintain to be a successful landowner or manager. The order is not meant to prioritize the list and is simply a reference guide to assist you in managing your land to its highest potential.
- Boundary Survey – When you buy or sell land it is especially significant to know where boundaries are and what their legal descriptions are. Many properties have almost ancient records on their boundaries and as neighboring property owners’ change or as management changes on adjacent lands, boundaries are sometimes mistakenly altered for new land uses. Over time these physical changes to the landscape can become difficult to correct on your property. Keeping accurate up to date surveys are also important for understanding what your true taxable landmass is and an accurate survey is the only way to verify the assessment record. Clearly, there is practical financial reason and long term management benefit to documenting the boundaries of what you own.
- Forest Management Plan – A forest management plan will assist in maintaining your agricultural land status for your forestland based property; and it is important to check with your local assessment office to ensure this information is in place and your tax bill reflects this management status on the property.
- Timber Resource Assessment – Evaluating the value of the timber on the property is also a valuable planning tool to have as you consider when to sell timber and take a return on your long term forest investments. Sound management of timber resources can be a strong part of any financial portfolio in mitigating against volatile swings in financial markets.
- Zoning Update and Regulations – Staying informed of current zoning laws and local regulations can be critical in maintaining long term value in your property. As land use laws evolve, regulations are clearly moving towards more restrictive patterns in land use. Having the opportunity to make decisions with your land based on these changes can only occur if you remain informed of local, state, and federal land use regulations.
- Conservation Plan – A plan can be developed by the local USDA office in your county and is a free service to landowners interested in learning about the myriad of conservation programs available for their land. The U.S. Farm Bill authorizes a wide array of incentive based programs focused on conserving soil health and natural resources on private land.
- Soil Data and Maps – The Natural Resource Conservation Service offers a free website where you can outline a given property and obtain accurate soil information and a range of descriptive resources on the characteristics of the soil on your property.
- Tax Maps and Natural Resource Data Layers – A website called MD Merlin offers a unique set of information for property owners including tax maps, wetland maps, high-resolution aerial imagery from 2007-2008, topographic maps, watershed boundaries and even political boundaries.
- Appraisal and Financial Records – When buying land the purchase price and initial appraisal are utilized for establishing the benchmark from which you measure future capital gains when a property is transferred. An accurate appraisal is important for tax purposes and maintaining strict financial records for costs and improvements to the property is critical in mitigating against future capital gains.
- Estate Plan – Establish a plan for conveying land to heirs in order to minimize tax consequences. This is critical to maintaining ownership for land which has long history in a family with potentially high capital gain consequences. A sound strategy established through your tax or financial advisor is important to the transfer of your land legacy. Be sure to schedule time with your accountant or a certified financial planner to understand the scope of options for you and your family.
- Insurance – Ensure insurance policies for current use and tenants on your land are adequate. Accidents happen and maintaining the proper type and amount of insurance could be invaluable if something unforeseen does occur. Specifically flood insurance is important to review as many times flood maps can incorrectly indicate the threat to structures on a property. This data is evolving as factors relating to sea level rise are being evaluated throughout coastal regions.
In closing, please recognize that I welcome the opportunity to advise you with any of your land management or land based real estate questions. I am here as a resource and look forward to helping you reach your goals.
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