Invest in Recreational Land for Revenue and Enjoyment

Reader Contribution by Erika Benson and Gokce Capital
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Photo by David Mark on Pixabay

Recreational land is an often-overlooked asset or investment. True, you may not be able to use this kind of land to build a home or homestead. However, there are a number of other personal and financial benefits associated with recreational land that you will be missing out on if you write it off too quickly.

What is Recreational Land?

But first, what exactly do we mean by recreational land? Well, it’s land that is used or zoned for recreational purposes, such as camping, fishing, hunting, ATVing, hiking, wildlife preservation, etc.

Depending on the local regulations, recreational land may be developable land that just hasn’t been built on or it may be land that cannot be developed. Because recreational land is unique and often restricted in terms of use, many people don’t realize its value.

But it does have value. Below are a few benefits associated with this asset class.

Tax Deductions

You are probably familiar with the tax benefits associated with a single-family home; however, you may not know that recreational land has tax benefits as well. First of all, the carrying costs associated with the property (property tax, interest, etc) can be deducted under certain circumstances (such as if you itemize your deductions on your tax return).

You can also consider donating a conservation easement, which will restrict development on your property, but will give you a tax deduction of up to 50% of your income for 16 years (depending on the value of the easement).

It’s Inexpensive

Unlike other kinds of real estate, recreational land can be relatively cheap to purchase. And it is definitely affordable to maintain. Unless you plan on making major improvements to the property, maintenance costs should be fairly limited.

There will also be no utility bills. Which means you just need to pay property taxes and monthly mortgage payments (if you took out a loan). Both of these expenses will likely be very low, because recreational land often has a much lower value than land with improvements on it.

It Has Mental Health Benefits

Recreational land can help improve your mental health. This is because time spent in nature and with family has consistently been shown to increase happiness and a sense of well being.

In addition, there is the intangible benefit that comes with pride of ownership and the sense of satisfaction you will get when you no longer have to pay camping or hunting fees.

It Could Have Timber Value

If your recreational land has timber on it, then that timber will likely have significant value. In fact, many people buy recreational land from timber companies for this reason. Timber companies own thousands of acres and often are actively buying and selling based on current market needs.

You will just want to make sure that you are buying the timber on the land as well as the land itself. You will also want to develop a sound management plan so that you can profit from the timber when it is old enough to harvest.

Finally, if you are looking to use the land for recreational purposes yourself, you will want to understand how well the company stewarded the land during their ownership. Did they use best management practices to ensure that the forest as a whole is healthy and able to provide a habitat for wildlife?

Rental Opportunities

While it is not an apartment building, there are ways to generate monthly income by renting out recreational land. You can create a campground (if allowed by local zoning) and charge a nightly fee for camping. You can also rent out your property to hunters if your land has good hunting stock. Another option is to build a fishing pond and charge a daily rate to locals who love fishing.

Use the Land to Support Yourself

You may not be using recreational land as your primary homestead, but, if the land has good hunting or fishing, it can be a great way to supplement the food you grow at home.

Depending on the local zoning regulations, you may also be able to grow additional crops on your land to help increase your yield. If you are more entrepreneurial, you can also start investing in vacant land. So, instead of buying recreational land to enjoy yourself, you can sell it for a profit to help support your family.

And Of Course, You Can Enjoy It

But of course, one of the biggest reasons to buy recreational land is to use it for fun. Most people buy this asset type so they can camp, hunt or fish.

The other benefits are just icing on the cake. If your primarily aim is enjoyment, you will likely want to find the cheapest land that will work for your needs. So, be sure to do some research on proper land buying due diligence first!

Erika Benson is an architect by training and a former Affordable Housing Director for the City of New York turned full-time Land Investor. She is the co-founder at Gokce Capital, where she keeps an active blog to give advice on buying and selling land plus aYouTube channelwith over 250 videos that provide tips for land buyers and information on our properties.

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