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GUIDE
TO BUYING HUNTING LAND
"THE
MOST IMPORTANT THINGS TO CONSIDER
IN PURCHASING HUNTING LAND"
By
Ed Covington
(Click
here for background on the author)
QUALITY
AND ABUNDANCE OF WILDLIFE
Quality
and abundance of wildlife is what most people want and it is probably the
hardest thing to determine. The
ways of researching]
the quality of wildlife are:
-
Ask
the seller.
You may get an honest answer and you may not.
However,
some landowners
who are selling their land don't know the difference.
-
Find
out who has hunted the land before. If it is has been leased for
hunting, get the name and phone number of the people who had
leased.
-
Call
the local Texas Parks and Wildlife (TPW) Biologist since they
can be a valuable resource. In
addition, the local game warden can be helpful.
-
Ask
the neighboring landowner if they hunt or lease their land.
If they lease, then contact the people who lease their
land. Most
people who hunt will try to help each other even if they are
absolute strangers.
WATER
Water
is a broad subject and is important to people in different ways,
including:
- If
you are a waterfowl hunter, you want an abundance of standing
water in the fall and winter whether it is a lake or stock tank.
However, if you are
a deer hunter, you would trade a dozen lakes for a good creek or
two running through property. The
best of both worlds is a lake with a creek or two. Tracks with a lot of developed water are hard to find and
is usually reflected in the price.
- Water
for a house or cabin is also important.
The things you need to ask the seller are:
- Does
this property have water well?
- Are
the neighbors on rural water or do they have water wells?
- How
far is rural water?
- What
is the cost of bringing rural water to the property?
- How
deep is fresh potable water?
Most
of the time, the seller can answer these questions. You might need to contact the county’s Cooperative
Extension Agent and ask them about water availability.
In addition, the local Farm Service Agency Administration is
usually very knowledgeable about water availability.
This agency can be found at the local United States
Department of Agriculture office, which is located in the county
seat of most every county in Texas.
TERRAIN
To
most people, terrain is a major factor in choosing hunting land. Again,
what you hunting will usually depend on what type of terrain you
want. You can have too
much of a good thing for quality wildlife production, so there needs
to be a balance.
- The
last TP&W seminar I attended on quail
hunting, they said that cactus is great for bobwhite
quail nesting. In
addition, cattle grazing should be managed as to not disrupt
forb production. We
will discuss this later on when we talk about leasing grass
rights for grazing.
- If
a place has a lot of elevation change, it can make the land more
scenic. In some
parts of the country there is not a lot of elevation change but
this still can be excellent hunting country. You don't need
elevation for quality wildlife production including trophy deer
and quail.
NEIGHBORS
Neighbors
can be the most important thing to consider when buying new land. In
some cases, it should be the first thing to govern your choice. However, this is one of the hardest things to thoroughly
research without knowing the area.
The
things I recommend are:
1.
Ask the seller.
2.
Get the names of neighbors joining the property you are
considering purchasing and call them to ask if they have leased
their land for hunting or if they hunt it themselves.
Find out if they know of any problems with any of the other
neighbors.
3.
Look for deer blinds on property lines. This nearly always
creates potential problems for buyers.
4.
Call the local sheriff and ask if he has had any trespassing
complaints from current landowners in the immediate area.
5.
Ask the local game warden about trespassing problems on the
land. This may seem like a little trouble, but could save you many
problems in future.
A
good example is a man whom I sold a place to in Archer County two
years ago. He looked at
the land and nearly all questions pertained to the neighbors.
He asked about every place that touched this property.
I satisfied him and after one hour of looking, he asked what
price I wanted, and he bought it.
At
this point, he told me why the neighbors were the most important
thing to him. He said
he had owned a place in Erath County.
When he bought it, there were nothing but big ranches around
him. Someone bought one, and divided it up. All of a sudden he had
people all around him. One had a bunch of dogs and they chased his
cattle and every deer in the area left. He talked to his neighbors but it didn't do any good so he
sold his place. After this experience, his main concern was the
history of area and the neighbors. He is extremely happy now and has
no worry about neighbors.
ACCESS
TO PROPERTY AND EASEMENTS
This can be important if you are going to build on your
property.
- Sometimes
all weather roads will mean a lot when you are driving to a
house or cabin. In dry weather, it is hard to really know how
bad the roads can be. This
is another factor you should inquire about from the seller and
also the neighbors.
- Some
people want more than one access road along with county road or
highway frontage. On
the other hand, some people would want the county road to dead
end at their gate with no access from any side. The reason is the poaching and trespassing problems you
can have with easy access. If
it is easy for you to access from more than one direction, then
a poacher also has his choice of entry and exit points.
Easements are important.
You want to have a recorded easement if you have to go
through someone else’s land to reach your property.
There are two different kinds of easements,
"EXPRESSED" and “IMPLIED."
- An
EXPRESSED EASEMENT is one that is recorded in the deed records
in the county clerk’s office in the county the land is
located. This is
sometimes called a "deeded easement.”
An expressed easement is the kind you want to have if you
pass through someone else’s land to get to your property.
- The
other type, an IMPLIED EASEMENT, is just what it says. It is an
easement where access has been granted or earned through use of
a road for a period of time. The law governing this type of
easement is very complicated and I recommend that you consult an
attorney that has had considerable experience with easements.
MINERALS AND OIL PRODUCTION
First,
let’s talk about current producing wells located on the property. Oil
wells are something that some people will be adamant about not
having on their property. Don't let this be a "deal killer.” If you find a place with all the other things you like,
remember that the wells won't produce forever.
- An
example of this is a place in Young County. It was a great place
with hardwoods, a good creek, lots of turkey, and much more.
I heard it was for sale before it went on the market, so
I looked at it. The
price the seller wanted was $220 per acre cheaper than I thought
it should be. When I opened the gate, I saw why: There were old, shallow oil wells all over the property. Most
were leaking, and the place had lots of old buildings, scrap
metal, old, rusted tanks, and all kinds of fallen wires. I
saw two 140-class buck and several smaller bucks, but I never
thought about the deer for the mess.
This place sold for $450.00 per acre but it should have
brought $700 per acre. The
buyer eventually cleaned everything up and he now has a great
place that he bought for less than market value.
- The
regulatory agency that controls oil production in Texas is the
Texas Railroad Commission.
If you have any trouble, you can always report problems
to them.
- Some
original mineral leases have several clauses in them concerning
the day-to-day operation of oil producing wells. If
the wells were drilled a long time ago, there may not be
anything to protect you as the surface owner in the original
lease. An example
of things that are written in several leases today is any
employee of an oil company cannot carry a gun in their vehicle.
This will keep them from hunting.
If your property has oil production, you need to make
friends with the pumper and let them watch the property for you.
The
next thing I would like to cover is minerals caps.
1.
Everyone would like to own 100% of the mineral rights on a
property. This is
nearly unheard of today. Because
of "mineral pros" (people who speculated on mineral
rights, back in the 30's & 40’s), it is very hard to own
mineral rights. You
don't have to own all the minerals to be protected from someone
drilling a well on your property.
An
example would be you owning a 1/8 undivided interest in the mineral
estate. This would
nearly enable you to stop anyone from drilling a well on a property.
This forces the oil driller to carry you through the risk of
drilling and completion of the well.
This means that he would pay 100% of the costs for 7/8 of the
working interest part of the oil.
Lets say he acquires a 1/5 royalty lease on the other 7/8
mineral estate, that would mean that for every 10 barrel's of oil
sold, he would receive only 7 barrels and assume 100% of the cost
for operations. There are very few oil deals left in Texas that
someone would risk this business arrangement. So in most cases,
because a piece
of property has no minerals, don't let this scare you off.
2.
Also if you can't buy 1/8 of mineral estate, try to buy the
executive leasing rights jointly and let the mineral owner receive
all the oil produced. You would receive all bonus and no royalty.
This also would keep anyone from drilling on the property from an
economical standpoint.
3.
The easiest way to find out about the mineral estate on a
piece of property is to contact the county tax office. They will
have a list of producing mineral interest holders’ names and
addresses. They will be glad to give you a printout of this list. If
the minerals aren't producing and have never produced, the tax
office will not have a record of the current mineral holder or
holders.
4.
The county clerk’s office has all the records of mineral
ownership on a property in its respective county. To research the
mineral division and ownership, you would probably need to go to
local abstract company and hire them to research this for you. Most
abstract companies will research for $25.00 to $40.00 per hour.
5.
In the State of Texas, "minerals dominate surface"
as far as the law is concerned. This means that in a dispute over the rights of the surface
owner and the rights of the mineral owner, the mineral owner will
dominate. I think this
has been maintained because Texas gets taxes on all the oil that is
produced in the state. Texas is one of only a few states that still
recognize "minerals over surface."
6.
Don't depend on the landowner to tell you what he owns or
doesn't own as far as mineral rights are concerned. Again,
if the minerals aren't producing they will not be in tax office.
TAX
ASPECTS & INCOME OPPORTUNITIES
Buying
land can be a good business decision from a tax standpoint if you
have a good accountant.
- The
property taxes are nominal if you get an agriculture exemption
on the land. This
is a reduction of "appraised value" to
"productive value.” An
example of this is suppose a piece of land has a market value of
$47,960. Under the
agriculture exemption, the production value is $3,310.
Therefore, you will be taxed at a lower value.
Some ways to get an agricultural exemption are:
a.
Run livestock on the property. If
you don't want to be a rancher, then I would recommend someone
paying you to let them graze livestock on your land.
Don't let someone overgraze your property as this can affect
wildlife in a negative way. Talk to the local Farm Service Agency for guidance.
b.
Get a wildlife exemption. A
wildlife exemption something that is new as far as tax laws are
concerned. You don't
have to run any livestock to receive an exemption.
- Some
counties have started taxing recreational land at a higher value
than the conventional agriculture value. You
should inquire about this when you research your taxes.
- Use
a 1031 Exchange to purchase "Like Kind Property."
- If
you have other real property you are going to sell with the
intentions of replacing with hunting land, you need to be
familiar with the tax advantages of a 1031 Exchange. Some
examples of "real property" that qualify for
replacement purpose are as follows:
1.
Mineral interest (producing or non‑producing).
2.
Working interest in producing oil wells.
3.
Any commercial real estate (office buildings, warehouses,
apartments, duplexes or houses as long as it is not your
"personal residence), or any other business or investment
property you may own.
- Another
part of the 1031 Exchange is called a reverse exchange. The
reverse exchange is not specifically authorized by IRS
regulations, but there are several reverse exchanges taking
place today. A
reverse exchange lets you buy property before you sell your
"Like Kind" property. An
example would be that you owned an office building in Dallas
and you found a hunting ranch that you wanted to buy but were
afraid it would be gone by the time you sold your office
building. You
could have the "Exchanger" purchase the ranch and
hold the deed until you sold your office building.
This is a complicated process and you should consult
your tax attorney.
Conclusion
All
of the things that I have discussed previously are very important to
everyone who is in the market to buy hunting land. Some aspects will be more important than others will.
Remember that it is nearly impossible to have it all. Therefore,
you should be your own judge as to what your priorities are.
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