Tips for Buying/Leasing Whitetail Real Estate
January 23, 2012
If you have a little grey around your temples, you can probably recall driving up to a farmer's homestead, walking up to the front door and asking permission to hunt. Back then, hunting rights were handed out like Halloween candy and the concept of leasing -- let alone buying -- recreational property had yet to take hold.
Today, both are big business, but in a tough economy, how are they faring? The answer might surprise you.
THE DILEMMA & THE SOLUTION
A study by Responsive Management, a survey research firm specializing in natural resource and outdoor recreation issues, shows that more than 80 percent of hunters consider overcrowding by other hunters a major factor in deciding where they'll hunt. For serious whitetail hunters, public ground just doesn't cut it.
So what's a hunter to do? Here are a couple options.
LEASING RECREATIONAL PROPERTY
I recall a conversation with a hunting buddy from Iowa several years ago. He had access to some of the best whitetail habitat in the area -- land that held some huge bucks. I suggested leasing the property, but he thwarted the idea by saying, "I can't bring that up in this part of the country." The sad reality of that conversation is that a few years later, he has no place to hunt. Much of the county where he hunted is now leased -- by hunters.
Leasing property is nothing new, but for recreational purposes, only in the last decade or so has it become common.
There are those in favor and those in opposition to such practices, but one thing is for sure: It definitely has changed the future of hunting.
It's tough to blame the landowners, many of whom are farmers living off their land. The economy has certainly not been kind to farmers in the past few decades.
In one study conducted by Responsive Management, data showed that a substantial percentage of landowners agreed that "a financial incentive would persuade them (landowners) to open their land to hunting," and the hunting participants conceded willingness to pay "a fee that would allow serious hunters to gain a key to gates that would allow individual access while keeping out trespassers and those who would otherwise do property or environmental damage."
Leasing recreational property can be an individual or a small group endeavor. And many hunters are discovering this by joining hunt clubs. These clubs utilize the annual fees paid by the members to lease properties.
One such club is Hunting Sports Plus (HSP), headquartered in Blue Springs, Missouri. The club leases "200,000 acres, give or take 20,000 acres on a given day," according to owner Daryl Traylor. HSP currently leases properties in Missouri, Kansas, Nebraska, Iowa, Illinois, South Dakota and Wisconsin.
Having leased recreational properties for 22 years, Traylor has seen both good and bad economic conditions, and each presents its own sets of problems. The current economic situation is no different, according to Traylor.
"We are holding our own, but like any business, we have had to adapt to the downturn in the economy by advertising a little more and pushing our sales team a little harder to sell memberships," Traylor said.
"Profits are down, but that is due to increased costs," he continued. "We stuck our necks out for some new leases and nearly 20 percent of our members went into an inactive status. We haven't lost many members, but a lot are sitting out until things improve."
HSP allows for members to remain in the club, choosing a reduced inactive membership fee.
"Many of our members live on the east coast, so they have to think long and hard if they want to spend the money to drive each year to hunt," Traylor said. "We have the game they want, but the gasoline prices concern them."
Selling memberships is just a small part of HSP's day-to-day work flow, as current leases must be maintained and the business of locating new leases to replace underperforming or expired properties is an ongoing task.
"Leasing properties hasn't been getting any easier," Traylor said. "It's probably gotten more competitive and more difficult. So many guys are becoming outfitters, and a lot of people are buying property of their own. It's taken a lot of land off the market that might have been leased."
"Farmers are becoming better educated about what their farm's lease rights are worth, and their expectations are much higher," he continued. "When I first started, the farmers didn't have a clue what to charge, and I had no idea what to offer. Anyone that asked would get permission to hunt. I had to educate them.
"It's hard to sell something when the next door neighbor is giving it away. "A lot of people are spending a lot of money buying properties when they could spend a small fraction of that and have access to all the land they would ever want with HSP, but that's my opinion."
Looking for a lease but feeling a little confused? Traylor offers these tips for leasing properties.
- Read the fine print of the contract; don't be afraid to ask questions.
- Know what you're getting and how much it is going to cost.
- If joining a hunt club, find out how many acres each member will be hunting. "If you are hunting a 300-acre farm with five or six other guys, you might as well save your money and hunt public ground," Traylor said.
- What comes with the lease property? This should be spelled out in the lease, but don't forget to ask. Do fishing rights go with the hunting rights? Are your spouse and children welcome? Can you camp on the property?
- If leasing as an individual or group, does the landowner allow planting food plots. Many do, but ask before committing to the lease.
- If there is a question or disagreement, read the lease. It is a legally binding contract and should be treated as such by both parties.
BUYING RECREATIONAL PROPERTY
Another study by Responsive Management shows 63 percent of the whitetail hunters surveyed hunt private property (either property they own or is owned by a family member or friend) exclusively.
"The ownership of land is, in many ways, the culmination of the American dream," according to Texas Governor Rick Perry. These words hit home for many landowners, and it seems many serious whitetail hunters are in agreement, but with the real estate market in a slump, are recreational properties feeling the tightening of the belt?
Dan Perez, co-owner of Whitetail Properties, a real estate brokerage firm specializing in hunting property, claims business is good.
"The current market has affected recreational properties, but what many people don't understand about real estate is there is always a market," Perez said. "Sometimes it's a seller's market and sometimes it's a buyer's market, which we are in right now. There are a lot of other properties for sale right now. If you want it sold, it has to be priced aggressively and competitively."
In a seller's market, everyone wants to buy recreational property, but getting the deal financed prohibits a lot buyers. "The folks buying now know they can afford it and want to get properties while they can get a good deal because they know this window of opportunity will not be open forever," says Perez.
Many of the hunts Perez films for Whitetail Properties TV are on properties being held and improved by Whitetail Properties and showcased on Sportsman Channel. In addition to entertainment, the purpose of the show is to demonstrate what a property is capable of producing if managed properly.
"We didn't grow all these deer on the property by using sound management practice," Perez said. "We attract animals in the area onto our properties."
In today's economy, it's sometimes difficult to identify a recreational property buyer.
"It's a mixed bag," Perez said. "We see entities, a group of guys who have formed an LLC for the purpose of purchasing land and leveraging their numbers for buying power. However, the majority of the buyers are the average guys looking for some property for a place to enjoy or a retirement place. A new breed of buyers are those who don't hunt or plant crops. All they care about is the return on investment," Perez explained. "Whitetail Properties helps these investors find farmer tenants and hunter tenants to lease the hunting rights for a better return on their investment."
Perez claimed people are becoming more creative at financing properties. "In good economic periods people buy using conventional financing -- 20 percent down and finance the remaining balance. Today, many buyers are using contracts for deeds and self-directed IRAs and 401Ks to buy properties."
RECORD BOOK & LAND PRICES
The states that bring top dollar per acre reads much like the Boone & Crockett record book. Illinois, Indiana and Ohio are at the top of the list. Iowa and Missouri would run neck and neck in the middle followed closely by Kansas and Oklahoma, which are still solidly in the top 10 states.
WHAT TO LOOK FOR
When looking to buy a piece of property with the goal of using it for hunting, Perez offered these tips.
- Keep the highest or best use of the property in mind. Ask yourself, "Yes, it is a good hunting property, but would it make a good home site, or could you grow crops on it? What about livestock? Does it have access to utilities, or is it convenient to other roads?"
"Some properties are so far removed from everything that hunting is its only use," Perez said, "and if you choose to sell the property, unless you can find a like-minded buyer, you might not have made the best investment possible.
"Whereas, if it has multiple uses, it can be marketed as such and you can get a better price for the property."
Check into the fertility of the soil and the maturity and quality of the timber, as well as the future timber it will produce.
- Perhaps the most important factor to consider as a whitetail hunter when valuing a piece of property is the quality of the animals that inhabit the property.
When Perez is filming his shows and he arrows a large-racked buck and sees other quality bucks on a property, interest in this property peaks because an all-important question is answered: Is the property overhunted?
"If we feature a property we are hunting on the show and film some big old bucks, the phone rings off the hook because people are able to actually witness the quality and the age structure of the deer that property has to offer," Perez said.
For more information on Whitetail Properties, visit their Web site at whitetailproperties.com
RECREATIONAL PROPERTY WITH A TWIST
Havenwood Properties is another player in the recreational property game. Recreational land manager Brad Harris said their business too has slowed down, but it seems one particular group has not been affected.
"The larger tracts are still selling well, but the smaller ones seem to have slowed down a little," Harris said. "What buyers are looking for when searching for a recreational property is income, whether it is in the form of CRP, cattle or crops.Anything with some agriculture or income potential, no matter where it is located, is appealing and makes it a better package deal."
Havenwood Properties is headquartered in Georgia but maintains and lists properties throughout the Southeast, Midwest and many Western states.
Havenwood has a unique spin for the properties they sell, most of which is held by Havenwood.
"We look at each property as a recreational property first and then build it up around that," Harris said. "This might be expanding the agriculture or putting up fences and gates -- whatever the property needs to make the property more desirable.
"When we are finished, these properties are a turn-key operation," he continued. "If a buyer comes in, the food plots, water, roads, fences and even lodging are in place. We even hang the treestands and set up the trail cams."
No matter if you are looking for a new place to hunt, a place to retire or to increase your bottom line, recreational properties can fill more than just a deer tag.