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How Can I Add Value to My Recreational Property?

November 18, 2022 - Mike Nelson

In recent years we have seen an increase in demand for recreational properties. These tracts of land have a primary use of recreational activities such as hunting, fishing, camping, trail ridings, and hiking. Unique to specific landowners, recreational properties can be enhanced to add value for potential buyers. There are many ways value can be added to recreational properties, but we will focus on four primary opportunities - adding an income source, building a trail system, researching property history, and enhancing water sources.

In the case of recreational properties, the motivation to acquire the asset is generally for personal use and enjoyment. Typically, land is acquired as an income-generating asset. When landowners are able to generate income from their recreational properties, the value of the property is enhanced. Farm income is primarily generated by rental income from crop production, hay production, pasture rental, or Conservation Reserve Program contracts. Crop acres that produce corn and beans will almost always generate the highest rental rate. Improvements to the property by adding terracing, tile, or tree/brush removal can provide additional acres for crop production, thus increasing the rental amount. Oftentimes the local Farm Service Agency and Natural Resource Conservation Services (NRCS) office will consult landowners on current cost share programs to clean up a property. Additionally, the NRCS can discuss specific CRP programs and available enrollment opportunities. Aside from rental rates, additional opportunities to generate income include logging and hunting leases. Of course, by adding an income source to the farm, the opportunity may diminish the privacy and seclusion the property may offer.

For landowners looking to maintain the exclusivity of their property, the addition of a well-maintained trail system can enhance value. A good trail system on a farm means having the ability to access all parts of the farm. The trail system may weave through timber, cross draws, and pass through water sources. Trail systems can be designed for foot traffic, horseback, or even Utility Terrain Vehicle (UTV) use. The trail system allows for recreational use of the farm and easier access for farmers renting the land. Farms with good trail systems and general access will enhance the value of the property overall.   

A verified and available farm history helps support the value of the property. Essentially, the farm history provides proof to potential buyers on why the property should be considered. We would suggest for landowners to keep records on all improvements that have been made to the property. Improvements can include but are not limited to tiling, terracing, fencing, and brush management. Additionally, historical data on yields and farm rents, when applicable, support the income-producing feature of the property. Hunting tract records should include food plot maps, stand locations, wildlife movement, trail camera photos, and harvest photos that exhibit the game potential of the property. If your property has a pond, keep records and photos of any fish stockings and fish that have been caught. In regards to wildlife, pictures speak volumes!       

Properties that have water sources can be considered high demand. Especially those that are well-maintained and support good fishing or waterfowl history. Landowners can improve water features by installing measures such as grass waterways and buffer strips to improve water quality. Ponds can be stocked with a diverse population of fish species and offer wildlife habitat. Again, for landowners looking to add a pond water feature, the NRCS office can consult with landowners on building plans and cost share opportunities. It should not go unmentioned that ponds also enhance the aesthetic view of a property and can provide a water source for livestock.

Land is a unique asset class because every property is an opportunity, especially recreational properties. They can offer seclusion, a sanctuary for wildlife, and an opportunity to experience nature. Like any asset, the owner wants to enhance the value and rate of return. Recreational properties are no different. Make sure to reach out to your local Peoples Company real estate agent to learn of recreational properties near you. Our Land Management team can also consult landowners on opportunities to add value to current and future properties!

Published in: Land Values