AgriWhat? How the Emerging Trend of Agritourism Can Help Your Business

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What do the following have in common?

  • Pumpkin patch
  • Crop maze
  • Farm store
  • Petting zoo
  • Wedding barn
  • Dairy with ice cream and cheese
  • Pastured pork farm
  • U-pick apple orchard

They are all types of agritourism activities and locations.

No matter what you call it – agritourism, agri-tourism, agrotourism, agritainment – it is cool! More than half of all U.S. states have some type of agritourism language written into their respective state laws. So what does this mean for you and your client? Knowing about the agritourism trends and practices around the country can not only assist you in finding the appropriate land for your clients, but can help your clients find future business opportunities. This follows the “growth begets growth” theory.

What is the difference between agritourism and ecotourism? It depends on the location and governing entity. Confused yet? No need to be. The bottom line is that knowing what is applicable within your sales region will help you help your clients, which in turn helps your bottom line.

Agritourism Operations

To be successful, agritourism operators must follow best management practices on their farms, but also must be welcoming to consumers and offer activities that pique their interest. Seasonality comes into play for all operations, with some farms offering multiple attractions year-round, and some farms offering only one or two options in a short amount of time.

An example of the former could be a dairy farm that produces value-added products for sale on the property year-round. Farm visitors can view cows and calves, see a milking parlor, walk through the processing plant, and end up in a store where they can sample and purchase farm-fresh ice cream, cheese, and other products.

An example of the latter could be a Christmas tree farm. The size of the land to grow trees is of foremost importance since the farm may only be open to the public six to eight weeks a year. However, the farmer may decide to be open for events during other seasons (e.g. pumpkin patches and corn maze “haunts” in the fall, u-pick hydroponic fruit and vegetables in the spring, or pick your own flowers in the summer).

In both of these examples, the land size matters. Having a workable space for the farmer is critical to the operation. However, having a safe place for agritourists is also critical. REALTORS can help farmers determine how much land is needed to conduct both public and private business, and can assist in finding the most usable, arable, visitor-friendly space possible.

In the Christmas tree farm example, space is needed to grow the trees, to prepare the trees for purchase (cut, shake, wrap, load), for customer parking, for tree and other product sales. For this type of operation, when parking is needed, usually LOTS of land is needed to accommodate the customers. If the farmer decides to provide other agritourism activities throughout the year, the acreage needed for those activities must also be considered. These are all things to consider when looking at property before purchase.

Ecotourism Operations

Again, depending on the governing entity, what one state considers agritourism may be considered ecotourism by another. This may or may not matter to your client depending on what they want to offer, but the distinction is important in terms of liability protections for one category over another.

Ecotourism can be any outdoor activity that doesn’t need to be consistent with a farm. It CAN be, but doesn’t need to be. These include kayaking, ATV tours, skeet shooting, zip lining, hiking, and many others. Your clients may want to provide these opportunities for their existing or potential customers, and the land specifications are as important for them as if they were considering offering agritourism. Where you can add value for your clients is by knowing the difference, especially in terms of statutory and legal definitions.

The Future

The possibilities for agritourism opportunities are numerous and exciting for REALTORS®, clients, and consumers. Getting people to experience the outdoors and hearken back on America’s agrarian history is a way to tie us back to the land. By navigating the nuances of agritourism policy and how that can shape a client’s business future, a REALTOR has the ability to help clients achieve their dreams. How many people can state that?

I encourage you to take a look at what agritourism operations exist in your nearby communities. If you get a chance, stop by to see the possibilities for how your clients can take advantage of this emerging trend. And don’t even get me started on the exciting trend of agrihoods …

About the Author: Melissa Hunt is the Chairman of the National Agritourism Professionals Association. Learn more from Hunt on this topic at the 2017 National Land Conference in her presentation on Is Agritourism a Viable Option (For You or Your Client)?

Optimizing Your Website As A Land Real Estate Broker

Optimizing Your Website As A Land Real Estate Broker

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This piece was originally featured in the 2016 Winter Terra Firma Magazine

When people hear the term “optimization” they often think of search engine optimization (SEO), but it is so much more than that. Optimizing your website is all about making your website as effective as possible to help reach your business objectives.

When land and ranch brokers ask me to help them optimize their website, there are two fundamentals I hit hard before even talking about search engine strategies. First, ensure you build value into the experience your audience has while they are browsing your site. Second, ensure you build value into the properties your audience is coming to your site to explore. Brokers work very hard to build value into their business through the expertise they deliver, the trustworthy relationships they build, and the solutions they provide, but they don’t always understand how to extend that value through their website. Your website is the single most important tool to represent you online. Ensuring you have the basics in place will go a long way towards extending the same value online as you do, so naturally, in person. So, to build value into the actual audience experience, start by asking yourself these key questions.

  1. When you click on your home page, does it look like you? Your website should be consistent with all of your branding. Your logo, your color scheme and your content should all represent your company. You want people to recognize your name, your signs, your email signature, and your business card. It doesn’t cost any more to make them all match, and it helps people get to know and trust your brand.
  2. Is all of your property information up to date? There is nothing worse than having a potential client request information and having to tell them the website details are outdated. Your website technology and approaches should make the update process quick and easy so you never have a problem in this area. You can even eliminate the need to update your land and ranch properties on your own site by choosing a website provider like us who partners with Lands of America to completely automate that process. The key here is that providing consistent and accurate information builds trust with your prospects and clients, while providing outdated information breaks trust.
  3. Is your website easy to use? You want your audience to find what they are looking for quickly and easily. They do not want to be forced to view advertisements, fill out a form, click through multiple pages, or create complicated searches to find what they need. Take them where they want to go immediately, and ensure your phone number is visible from every single page of your website. You want to make it easy for them to call you when they are ready.
  4. Is your website mobile-friendly? As of 2014, there are more mobile users than desktop users, but many companies still have not updated their technology to make the experience a good one for smart phone users. The “pinch and zoom” method results in text that is too small to read, links that are too close together, and pictures that don’t fit the screen. This frustrates prospects and clients coming to your website to view property details and request information. Make sure your site is truly mobile-friendly.

Once you’ve built value into the audience’s website experience, the next fundamental area of focus should be building value into the properties your audience is coming to your site to explore.  There are a number of things you can do to set yourself apart from the competition and draw more clients, especially sellers.

  1. Use only high quality photography. Do not settle for small, grainy, or even blurry photography on your website. It is a disservice to your company, your clients and often detracts from the property value. If you choose not to hire a professional photographer (which is preferred), at the very least make sure you use the highest possible quality setting on your camera. Many people take short cuts with high quality photography because it costs more and many website providers can’t accommodate it. Choose a website provider who can.
  2. Create property and agency profile films. When I say film, I don’t mean just posting a virtual tour or raw aerial footage taken from your new drone. I mean using video to tell an engaging story about your agency and properties that capture and maintains your audience’s attention.
  3. Use a high quality mapping service. I recommend moving beyond Google mapping of pins and boundary markers to a monthly service. One that drives value into your properties by letting you mark and label property assets such as wells, structures, roads, and other unique features that set your property apart. One that has no limits to the number of boundary markers you can map and, then, easily share all of the mapping details via email. Some even have apps you can use while standing on the property, whether to create the asset details or show a prospect through a mobile device on the spot.

Once you have invested in the online fundamentals above, it is appropriate to start investing in driving more people to your website. You are well positioned to convert those leads to sales, positioning for a better return on your investment.

  1. Include your website address on all advertising and social media. You may chuckle at this one, but you’d be surprised how many people over look this critical opportunity. Whether it’s on your listings, in a trade journal, on social media, or in the home town paper, prominently (and proudly!) display your website address. One caution, if you do not intend to manage and maintain your social media sites, do not create them. Neglecting updates to your social media can create negative results. Social media sites are an extension of your business and you must have someone manning the desk to build trust.
  2. Provide regular email communication with your clients. Everyone knows the best leads come from client referrals. Staying in front of your clients with valuable information is very important. Ensure you have a database of clients willing to receive emails from you and reach out to them regularly with new properties, updated property information, highlights of sold properties, or something engaging, like a link to your agency profile film on your website. (Use your website as a convenient place to opt in or out of such mailings.) Ask for referrals and always include your website address in your email signature.
  3. Invest appropriately in SEO and internet marketing. I say “appropriately” because it can cost quite a bit to get your company to rank within the top three spots of an internet search page. Your company, broker, and agent names should be built into your website pages to generate free, top search engine placement, but beyond that, you should anticipate spending a minimum of $3,000 – $6,000 per year for a good internet marketing campaign. When choosing an internet marketing company, avoid those who guarantees success without demonstrating a significant plan involving trial, error, adjustment, and continued investment to see what works. Ask for research that demonstrates the best key words for high ranking in your business and in your region, and analyzes how your competition is placing. Choose a provider who commits to regular traffic reports to analyze what is and is not working and understand that success is based on many factors out of your control, which change all the time. For instance, if you spend $500 in a month to ensure a key word important to your region places you on the top three results of a search page, but your competitor spends $1,000 in a month for the same word, your competitor will out rank you. This is how it works, so you need to approach internet marketing as an evolving strategy requiring long term investment, both in time and money. Your goal is to build a foundation that tells the search engines you are a reputable player so they send the traffic your way. You are competing with others trying to do the same.           

As you can see, optimizing your website is all about making it as effective as possible to help reach your business objectives. I always remind people there is a lot you can do to reach your business objectives before investing in search engines, and even social media, despite the current hype.

Ciesiensky, MikeMike Ciesiensky is the President & Founder of LandBrokerWebsites.com, a Crystalcore.net division. Ciesiensky is experienced in helping land and ranch brokers create websites to meet their business objectives. Ciesiensky presented at the 2016 National Land Conference in Dallas and is a partner of the Institute.

 

REALTORS Land Institute 1031 Exchanges

An Alternative to the 1031 Like-Kind Tax Exchange

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It was a brutally cold, windy and overcast morning in the Dakotas Territory. The year was 1871. Every living creature exhaling air was immediately turned into vapor from the freezing temperatures. We were soldiers in the 7th United States Calvary Regiment and this particular morning, we were not singing “Garyowens”. Thousands of settlers were flocking to the territory and our job was to protect them. At this moment, many of the settlers were being threatened by the bad guys and we were preparing to ride to their rescue.

Commanding F Company was the American icon Capt. John Wayne. His Second in Command was WWII hero Lt. James Stewart. Work with me here. We were divided into two wings. One the left wing, 1st Squad was manned by the great Virginian Sgt. Randolph Scott and 2nd Squad was led by the incomparable Sgt. Errol Flynn.

The right wing was led by the 3rd Squad’s fearless Sargent Glenn Ford, who later helped defeat the Japanese Navy at the Battle of Midway, and the 4th Squad was led by Yours Truly right out of “The Point.” Again, work with me. The battle lines were drawn and we were ready for action. Captain Wayne gave the order and the bugler belted out the Calvary charge. The horses leaped into action, our swords at the ready and at that very moment….my alarm went off and it was a Wednesday morning in 2015. Another missed opportunity to ride to the rescue. Or was it?

Scrutiny Looms Over Section 1031s

Section 1031 is beginning to receive scrutiny by Congress and that’s probably not a good thing. All of the appropriate organizations including the Institute are lobbying Congress to leave 1031 exchanges alone–and for all the right reasons. But this is Congress, and that means that this will probably become a huge political football. I have no inside information but based on being in practice since the late 70s, my gut feeling is that 1031 exchanges will be modified to some extent. Perhaps, the first 500k in capital gains can be passed on to a new replacement property or something along those lines may be the final result.

Can You Help Your Clients Without Using 1031s? Yes!

So, assuming that Section 1031 is changed in some fashion, how can Institute members ride to the rescue to still help their clients defer capital gains taxes, state taxes where applicable, depreciation recapture, the Obama care tax and possibly the alternative minimum tax when selling a clients’ property. Actually, there are options now and you don’t even need a 1031 to defer taxes. Let’s turn a negative into a positive.

Imagine not having to deal with a forty-five day identification time limitation or loan to value ratios. What if you could sell a client’s great property now, defer taxes and at any time in the future, you can buy any property that you would like for your client AND while you are looking for that property, your client can receive a check every month for roughly five to six percent of the sales proceeds while those proceeds are still tax deferred. Do you think that this might give you a competitive advantage over other brokers that are unable to provide this opportunity?

Imagine working and taking constant risks for thirty or forty years or more and when you’re finally ready to retire, you have to write a check for twenty-five to thirty percent of your liquid assets to the US Treasury before you can retire. Well, fortunately you don’t have to but when selling your clients properties, they do have to write a check to the US Treasury for twenty-five to thirty percent of their sales proceeds and for many, that’s THEIR retirement plan. You can still defer those taxes for your clients and keep more of their hard earned sales proceeds in their pocket and send less to Washington, even if a 1031 isn’t appropriate. Do you think that this might give you a competitive advantage over other brokers that are unable to provide this opportunity?

Another tax deferral strategy that might face Congressional scrutiny in the future is the stepped up basis. I have met a number of older land owners who intend to pass their property on to their heirs instead of selling their property because of the large tax liability that the sale will create, and because a 1031 isn’t appropriate. That’s not necessarily a bad strategy unless you make a living selling real estate.  If you do sell real estate, it is possible for the land owner to sell their property and defer taxes and turn an illiquid asset into a lifetime retirement income. When the land owner passes on, the income can be passed on to the heirs. And you just sold a great property.

The great thing about the REALTORS® Land Institute is the sharing of ideas and strategies and that’s why Institute members and Accredited Land Consultants (ALCs) tend to be more successful and have higher incomes than non-members I certainly hope that Congress doesn’t make changes to Section 1031 but if they do, we can still ride to the rescue of our clients without having to be John Wayne or….even me. Let’s turn a potential negative into a positive today by recognizing there are other ways to defer our clients’ taxes than a 1031. You will sell more real estate and keep more of your clients’ hard earned sales proceeds in their pockets and sending less to Washington. Happy selling and deferring taxes!

David Fisher, Creative Real Estate Strategies

David is a Partner at Creative Real Estate Strategies, a 2015 Silver Partner of the Institute, and has been in the industry since the late 70s. His years of experience help him to assist land brokers in helping their clients defer capital gains tax, state tax and depreciation recapture taxes on their client’s sales proceeds when either their clients are unable to complete their 1031 or the client would like to sell and retire but still defer taxes. By understanding these tax deferral strategies, brokers have been able to sell more real estate. David can be reached at 713-702-6401 or at David@cresknowsrealestate.com

When A Crop Kicks You in the Gut

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I went to work on August 12th with a lengthy to-do list. I knew it was going to be a busy day and an especially interesting lunch hour. Like most of us involved in farm management and agricultural real estate, I was eager to hear the USDA Crop Report. In today’s fast-moving world, that report can affect the market strongly and swiftly.

All bets are off with USDA reports; I have been around long enough to know that. That said, I was trending towards the camp that was expecting bullish news. I am not sure where you sit while reading this, but in Central Illinois, I don’t see an enormous crop. I see a crop that struggled with record rainfall in June and in some instances, never even got off the ground. With that in mind, I had gone through every farm management account the previous day and gotten figures and delivery dates all lined up for some additional crop sales. I was ready! I just needed the report to be released. Then, the report came out…
The USDA raised the corn yield 2 bushels per acre and beans 1.5 bushels per acre. Immediately, corn was down 20 and beans down 60. In an instant, it sent producers and managers scrambling for answers and looking for “next steps”. It should be said that the USDA doesn’t necessarily do a thorough inspection of the crop, and in their defense that is probably an impossible task. Regardless, they put large projections–and in some cases, historic projections–on the states in the Western Corn Belt that have supposedly had more favorable weather. Whether ag experts think the USDA projection is off-base or not, the fact remains that the market trades off of these numbers and until there is new data or an unforeseen outside influence, this is what we have to work with.
cornfield
It is uncertain whether anything can spark substantial movement until farmers hit the fields. Only when grain crosses the scales will we know what crop we have. Until then, estimates are just educated and calculated “guesses”. Some theorized that FSA preventive planting numbers released on August 17th could’ve provided a bounce. Although there were over 2 million acres prevented from being planted in Missouri and Illinois, the 17th came and went without much movement. Extenuating circumstances abroad could move the pre-harvest market, but that is often harder to project than the crop itself. China’s currency devaluation was the buzz during the week of August 10th. Oil hitting a six-year low on Monday, August 17th is the chatter right now. What remains to be seen is whether any of these outside factors can substantially alter commodities in the interim. If we had gotten a hot dry-spell in August, that could’ve swung the pendulum…but that was a big if.
Perhaps the Pro Farmer crop tour will enlighten traders on what to expect. This annual tour encompasses teams from Pro Farmer scouring the entire Corn Belt with in-depth analysis. The USDA fails to get up close and personal. This crop tour has legitimate boots on the ground with plant population numbers, ear size measurements and ultimately provides yield checks on a multi-state level.
At the end of the day, the report came out and kicked the “Bulls” and optimists in the gut. We very well could be in line for some choppy trading during the next month. Perhaps an outside event or development could form, but I personally wouldn’t bet on it. Treading water until harvest is well-underway is our most likely immediate future. Harvest season is always exciting and often provides a few surprises. Until then, we can wish together that we pulled the trigger on sales the days leading up to August 12th.
Luke Worrell, ALCContributor Luke Worrell, ALC, Worrell Land Services
Luke Worrell is a Broker, Accredited Land Consultant and Accredited Farm Manager in Jacksonville, IL.  He specializes in agricultural real estate and land management in west central IL.  Luke enjoys all things sports and traveling.  He resides in Springfield, IL with his wife Allison and son Kale.