Demand for undeveloped rural land is growing, creating a new niche for rural and urban brokers alike. | Articles

Friday, August 1st, 2008

For some, the notion of selling swampland might seem like little more than a running real estate gag.

But don't joke about it with an increasing number of rural real estate professionals. They've turned a growing demand for recreational land, some parcels of which include swamps, into a profitable full-time business.

One recent listing in Louisiana, for example, is a 491-acre parcel that includes a cypress swamp, something that might have been a liability a decade ago. Now, it adds to the property's value because buyers value wetlands as a home for a wide variety of wildlife and as a buffer against future development near their property.

Brokers throughout the country are seeing a growing demand for farmland and other rural property from hunters, horseback riders, and other outdoors enthusiasts looking for private getaways.

"People aren't buying recreational property just for their own use. They're buying it because it has turned into a great long-term investment," says J.J. Keeth, a co-owner of Mossy Oak Properties of Louisiana in Shreveport, La.

Rural and small town real estate pros aren't the only ones who can pick up business from buyers looking for recreational land. Pros in urban markets can generate income through referrals.

By doing a small amount of research, city and suburban practitioners can help their clients find qualified practitioners in rural markets. Leo Hayden, broker-owner of Hayden Outdoors in Goodland, Kan., says he regularly works with, and pays referral fees to, real estate people from outside his area.

Who's Buying?

Dorothea Lowe, broker-owner of Sky Lodge Properties Inc. in Red Lodge, Mont., says most of her sales are recreational properties. Buyers are typically over 40 and come from a large metropolitan area on the East or West coast or from the South. Her buyers are skiers, hunters, anglers, and others who want to get away from the hassles of urban life. Lowe also has an office in northern Minnesota.

Keeth says his clients vary in age and background, ranging from young blue-collar workers from rural Louisiana to retirees from urban areas such as Dallas and New Orleans.

"Many retirees want a place where they can spend time with their grandchildren," says Keeth, "but we are also seeing financially secure, younger families buying land so they can ride their four-wheelers or fish in the pond."

The most recent survey conducted by the U.S. Fish and Wildlife Service found that America's 30 million anglers spent more than $40 billion in 2006, including nearly $4 billion on land purchases and leases. Hunters spent $22.7 billion overall, with $4.5 billion on leases and purchases. Such spending likely will increase as enthusiastic hunters and anglers grow older and think more about where they'd like to live when they retire.

"Most of my clients who buy land plan to retire and build a home on it later," notes Lowe.

Fishing for Clients

The Internet has turned into a powerful marketing medium for rural brokers and has helped buyers find listings that might otherwise be difficult to find.

However, the online world isn't the only way to reach potential clients, Keeth says. His office sends out a quarterly newsletter that highlights new properties to about 7,500 prospects. He finds potential newsletter recipients through word of mouth as well as through local landowner tax records. He also sends an e-mail each month to about 5,000 addresses he's gathered from past clients and visitors.

"We tried buying mailing lists, but they weren't as effective as getting the names ourselves," he says. "It's still critical to get out there and talk to people. If you think you're going to build a Web site and just sit back and let people find you, that's not going to work."

In 2004, Hayden joined Cabela's Trophy Properties, a subsidiary of Nebraska-based outdoors retail giant Cabela's. Prior to joining the service, his company did about $3 million per year in sales; now he has more than $60 million in listings. He was the third broker to join Cabela's Trophy Properties, which now has 240 brokers and salespeople in 46 states. Brokers pay an annual fee and own a territory.

David Nelson, manager of Cabela's Trophy Properties, says the Cabela's retail Web site is the most visited among outdoors retailers' sites. Cabela also mails 80,000 recreational property catalogs twice a year to the company's most active retail customers.

Nelson says brokers interested in aligning themselves with his listing service go through a rigorous screening process to determine whether they're a suitable match.

Reeling Them In

Like many other brokers who sell recreational land, Hayden uses his Web site to highlight not only his properties but also the recreational opportunities available on each one. Photos of wildlife, scenic vistas, and even links to habitat conservation organizations help build credibility.

Visitors to Lowe's site can find links to nearby national parks, state wildlife agencies, and other government agencies. "Because many of my clients are relocating from other states," she says, "they find the links a big help. I get a lot of e-mail from my Web site visitors thanking me for those links." Her Montana Web site has generated more than 300,000 hits since 2005.

To generate business for her northern Minnesota office, she's planning to produce an infomercial. In addition, she advertises in hunting and fishing magazines, in real estate–specific publications, and on Web sites.

The Web site for Mossy Oak Properties of Louisiana includes a soothing audio stream of bird calls. Keeth wants to build an emotional attachment with his site visitors.

All three brokers include photos of homes and structures, but those are often secondary attractions; buyers are more interested in the land itself.

Walk the Land

Larry Atkins, broker-owner of State Wide Realty Inc. in Farmville, Va., says the way to sell recreational land once you've been contacted by a potential buyer is to put on your boots and get some dirt on them.

Clients interested in buying land are no different from those looking for a home: They want to see the entire property to determine if it meets their needs.

"Some people don't want to walk the land with their clients. They might drive along the road and point out the boundaries, but buyers interested in recreational property want to see the land just like a home buyer wants to see the entire house," says Atkins.

Hayden agrees. A lifelong hunter and angler, he has a good idea what his clients want after spending time with them on the phone, but he still spends lots of time walking land.

Hayden and other believe we are now at the beginning of a recreational land rush. If they're right, real estate pros who can talk with clients about the attraction of undeveloped land as a place to escape the daily grind might have an opportunity to increase their bottom line.

By: David Hart  |  Source: realtor.org  |  Original Article