How to Find Your Dream Homestead

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If you’re simply looking for a low-cost home, many of the same areas of the country where land is affordable offer good housing deals, too. “As recently as three years ago I was in northwestern Nebraska where you can buy a house in a small town for under $10,000,” says Steven Saltman of Land and Farm.com. Data from the U.S. Census Bureau indicates that home values in the Midwest and Deep South are among the most affordable in the country. While most economists don’t expect home prices to pick up until 2009, Dan Duffy, CEO of United Country Real Estate, the largest rural real estate company in the United States, says that rural homes remain a solid long-term investment. “Rural home values have steadily appreciated since the 1980s,” he says. “Rural homes tend to be less pricey and haven’t experienced a big run-up as we have seen in urban areas.”

Curtis Seltzer, a land consultant and author of How to be a Dirt Smart Buyer of Country Property, cautions buyers tempted by low cost or free land that it may be cheap for good reasons. “Rural land is cheap where there are negatives such as difficult climate, ruined aesthetics from activities like mining, environmental problems such as drought or pollution, or chronic problems such as high unemployment,” says Seltzer. 

Giveaways Galore

To turn the tide of population decline, many Midwestern towns have turned to drastic measures — such as land giveaways — that offer options that are hard to pass up. As of mid-2006, Hazelton, N.D.; Hendrum, Minn.; Chugwater, Wyo.; Kenesaw, Neb.; and 21 Kansas towns were offering free building lots to newcomers. (See “Resources,” below.) It’s an offer that many land seekers are taking. Most towns have been flooded with thousands of requests. By November 2006, 74 of the 80 free lots in Marquette, Kan., had been given away. The programs have appealed to a broad cross section of people, from young couples with children to retirees who have come from as far as California and Louisiana.

If a free lot isn’t enough for you, consider that most of these towns also offer other incentives, such as property tax rebates over five to 10 years, building permit fee waivers, down payment assistance, complimentary memberships to local country clubs, and even help finding jobs.

Some rural banks are getting in on the game, too. In Iowa, Franklin County’s Hampton State Bank developed an innovative loan program to lure former residents back home. The program, called “Come Home to Franklin County,” gave former residents financial incentives (in the form of below market rate home and auto loans, free bank services and a free personal computer) to move back permanently, provided that person graduated from a Franklin County high school. In Kansas, lenders and bankers in Ellsworth County agreed to reduce required down payments for new homes by the value of the county’s free lots, plus they waived other fees.

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