Hobby Farm Property Purchase

United Country Midwest Lifestyle Properties real estate agents are invested in making your hobby farming dreams come true. We have the real estate know-how to help you get the best property deal. Let United Country Midwest Lifestyle Properties guide you through the purchasing ins and outs.

The game plan

First and foremost, there is a difference between a hobby farm and a commercial farm. Hobby farms, in general, are small-scale, non-profit, and done for the sheer enjoyment of keeping and caring for animals. Commercial farms are for-profit and larger in scale.

Most folks don’t realize that obtaining a hobby farm loan requires a game plan- aka a “business plan”. If you’re applying for an agriculture loan, your ag lender will want you to have a business plan, spelling out how you plan to earn income off the land you’re purchasing.

How does someone earn income on a hobby farm? There are a variety of income-producing activities your farm can sustain. Having an agriculture background is helpful. Even if you don’t have an agricultural background, your willingness to study and learn will go a long way.

Here are a few income-producing ideas:

1. Cut flowers
2. Organic produce
3. Chickens for meat or layers
4. Raise specialty breeds of horses or cows
5. Honey
6. Herbs
7. Essential Oils
8. Earth Worms
9. Pumpkin Patch
10. Apple Farm

How to shop for a loan

As we mentioned above, because of the nature of a hobby farm, seeking a loan can be difficult as hobby farms do not meet the requirements for a conventional farm loan. Here are a few conditions some banks may require for getting a loan:

Finding an ag lender who supports your hobby farm dreams is essential. We’ve come up with some criteria for you to use when shopping for an ag lender:

1. Choose someone who will listen and understand your unique hobby farm situation.
2. Has customizable hobby farm programs based on:

3. Achievable program requirements.
4. Excellent communication.

Hobby farm property checklist

United Country Midwest Lifestyle Properties has your back when we’re shopping for your dream hobby farm property. It’s our job to thoroughly research each property. We look for five, key essentials when looking at a hobby farming property:

1. Is there a home on the property? We’ll look at the condition of the home, septic, and water- making sure septic and water are available and in working order.
2. Proper zoning.
3. What outbuildings are on the property? Your livestock needs to have ample, safe shelter.
4. Fencing, roads, or trails already on the property- Will there be a need for repairing or new fencing?
5. Water sources that are available on your land.
6. How fertile is the soil? How many acres are available for farm animals, and what will go into production?
7. Room for expanding?

After deciding on a property, you love, we can help you look into programs you may qualify for with the USDA.

Financial benefits to make use of

Making a profit off your hobby farm will only add to the enjoyment, possibly even making it your sole income. Keep in mind almost all income is taxable. Even bartering is taxable!

If you want your state and federal government to take your tax deductions seriously, we suggest you do the following:

1. Treat your hobby like an income-earning business: keep good records on profits and losses, feed expenses, veterinarian services, equipment fixes, fuel, etc.
2. The IRS looks for proof of intent. How many hours are you putting into running your hobby farm? What type of income is your hobby farm earning?
3. Make sure to fill out the correct tax forms. Hobby farm profits are as other income on Form 1040. Other businesses must fill out Schedule C. Farmers are required to use Schedule F to detail profits and losses.

Whatever your hobby farm dreams are, let United Country Midwest Lifestyle Properties real estate agents will help you get the best property deal. People and properties. Two of our favorite investments! Give United Country Midwest Lifestyle Properties a call today at 608-742-5000.