Buying Homestead Land | How to Afford Farm Land

Many new homesteaders ask, “How do you afford buying homestead land?” Here is what drives up land prices and action tips so you can afford farmland.

One question many new and aspiring homesteaders have is, “How do you afford land?” How do you get into owning your own property and buying homestead land? That can be as little as an acre or as much as a hundred acres or more. Each farmer and homesteader has their preference as to how much land they want, what kind of homestead land they want, what type of land they want. 

I recently posted on Facebook about land ownership, the amount of land available in the United States, and how much land in our country is foreign-owned. It’s a staggering, surprising amount of land here in the United States. It’s something that is continuing to push up land prices throughout the country.

Let’s get into land prices, land locations, and some of the things that drive up pricing such as foreign land ownership. It’s a really important conversation we need to have, especially in these times. Then we’re going to cover some things that can help you find homestead land like buying undesirable land or starting small, changing laws, community buys, and how to save cash. 

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My husband and I and our family are in the process of searching for homestead land right now. We have been homesteading for about 10 years and currently live on a half-acre homestead in the foothills of the Blue Ridge Mountains in Virginia. Virginia is not the most amazing state to homestead in, but most of our small rural counties don’t have many restrictions on homesteading or farming. In fact, Virginia is an extremely big farming state. It always has been. I grew up in the farm community. My grandfather was a farmer and you knew all the farmers. I grew up in a town that was a stop sign on a map. Everybody knew everybody. It was a nice farm community. 

When we first started homesteading we bought a half-acre foreclosure with a house in a wooded subdivision. Thankfully the subdivision doesn’t have many restrictions and the restrictions they did have, we all threw out the window. We all have chickens and goats and ducks and all those fun things. But now that we’ve been into this for a few years, we’re okay living here. I could live here the rest of my life. We can do a lot on a half-acre. We’ve produced hundreds and hundreds of pounds of meat from this property. We’ve produced probably thousands of pounds of produce from this property. It’s been a challenge, but we’ve learned the property and how to work with what the property has to offer us. I might not be able to grow the most amazing abundance of fruits and vegetables, but I can grow quite a bit of food. 

But we have been saving up for years to purchase more homestead land. We’re feeling that nudge.  

We really want to kind of get into larger land ownership. Ultimately, my goal with Homesteaders of America is to have a large property of 50 to 100 acres, large enough so we can host the conference there. We could also turn part of the property into an educational farm experience where people could come and learn how to farm through workshops and other activities.

I’ve been looking for years and, knowing the value of land, it still shocks me to see so many people charging an outrageous amount of money for a property. We’re talking millions of dollars for a 25-acre property in the county over from us with a 3,000 square foot house. It better be springing up gold because that’s outrageous! Of course, I am about 70 miles outside of Washington DC, which makes a difference for sure. But when I started looking in other locations in Virginia and it’s the same. There has to be a reason, right? Most of these farmers are not like, “Oh, well, I’m just going to charge $3 million for my hundred acres. And anybody’s going to give me that right now.” 

There is a large family farm in the county over from us that has been for sale for years. It is a beautiful farm and wish I could own it. It has 400+ acres and beautiful farmhouses would make it a great community or family piece of property. I’ve been watching it for years and they’ve never come down on their price and I believe they just wanted somebody to come in that would take care of it and not subdivide it. So in some situations, they out-price themselves because they want someone who really cares about the property to purchase it. They’re very selective, but more often than not, large parcels of land, and even now smaller parcels of land, are going for an outrageous amount of money because there are individuals willing to pay that. 

And it’s who is buying this land that is disturbing. 

Foreign Land Ownership in America 

You may be surprised to learn that in Virginia alone, where we hold the Homesteaders of America conference, 526,000 acres are foreign-owned! This may be by either a company or an individual but that’s just in Virginia! 

Normally the purchaser is a foreign-owned company. Often times they’re running their names under LLCs or big corporations. So some of the top players in Virginia are Germany, the United Kingdom, Canada, and China. In fact, China owns the Smithfield pork processing operation in Virginia (and throughout the country) which is the largest pig processing facility here in the United States. And along with that acquisition came plenty of farmland. 146,000 acres were bought in 2013 along with the Smithfield pork operations sale. 

So there are quite a few countries that own land here in Virginia. In fact, a German-owned LLC owns a historic farm right up the road for me. It’s a beautiful farm and I’ve taken pictures there. The owners don’t live here but pay a friend of mine to manage the farm. The company bought in several different parcels between the ’70s, ’80s, and ’90s and now make one large farm. 

I don’t have a big issue with foreign-owned land. Obviously, there could be some purpose in this activity, but it is disheartening to see how much land in the United States is being bought by foreign entities and driving prices up for Americans, that want to do actual farming on this land, aren’t able to afford it. 

Nearly 30 million acres of United States 1.9 billion acres of land is now owned by foreign countries. While that figure includes both farmland and forestry, forestry is often considered agriculture and can be included in farmland. And of course, we know not all of that is usable. There are mountains and ridges. 

In 1998, only 10 million acres of American land were foreign-owned. That means in just 20 years, we’ve more than tripled the amount of land that’s now no longer in possession of American landowners. 

In 2016 alone, at least 1.6 million acres of us agricultural land were acquired by foreign investors. Maine and Texas are the States with the highest foreign ownership of land. 

As we already discussed, China is now a big, big, big player in the foreign acquisition of land after having acquired the Smithfield pork operation in 2013. 

But it doesn’t stop there. 

In the last decade, Chinese investments in the agricultural sector have grown tenfold according to the USDA Economic Research Service. But it’s not just meat and crop production land, it’s also not land at all. 

It’s also pesticide companies and seed companies. So China’s a big player right now. We hear talk about China through various different politics but this isn’t one side versus the other. This is just straight-up politics. We know the Communist Party of China’s goal is to gain control of more farmland, more grain products, more livestock feed, and seed so that they can manufacture products that support facilities and agricultural production to create large multi-national trade conglomerates. This is common knowledge information that they’ve stated themselves, not conspiracy theorist talk. 

Trade conglomerates are a combination of multiple business entities operating in entirely different industries but under one corporate group. It usually involves a parent company and many subsidiaries. They will have one parent company or corporation and that large corporation can have hundreds or thousands of subsidiary companies. 

Like these LLCs that you see buying up farmland in the United States. 

If you research, more often than not, you’ll find that much of American soil is owned by an LLC. It is not owned by an individual landowner. Normally when they’re owned by an individual landowner, that owner is actually living here and contributing to our community. 

Find out who owns the farmland in your neck of the woods.

What is China’s motivation to purchase American land? 

If they can grow their crops here, why would they need to trade with the United States? When they can own companies here that raise livestock, crops, food all of the revenue exported out of the United States. And it’s streamlined straight to China (or whatever country they are supporting at that time.) Instead of that production serving Americans, it’s being sold to a foreign entity. That money is going to another country instead of staying in our country. And with it goes any reason for countries to trade with the United States because they’re buying land here and doing it themselves. 

The issue becomes low-profit margins and trade wars that are increasing farm bankruptcies. Large farms, corporate farms, and even larger family farms are quickly being bought up or acquired by foreign countries because they can pay the big money. It’s hard to blame the landowner because if someone offered you millions of dollars for your land, you’d probably take it too. 

While some countries don’t allow foreign acquisition of land, it’s driving up our prices of land in America making it so a lot of people can’t afford land. You might be one of those people thinking you’re never going to have a large property because you can’t afford it. 

I’m here to tell you there’s hope.  

How to Buy Homestead Land When You Can’t Afford It

There’s hope for all of this. Most people are not looking for a hundred acres. Most people aren’t looking for 50 acres. Normally when searching for homestead land for self-sufficiency, you’re looking between 10 and 30 acres. I would even say only 10 and 20 acres is what most people I have seen are looking for now.

Depending on your location, a property that size can range anywhere from $50,000 for 10 acres, all the way up to millions of dollars for even 20 acres. It depends on your location, but there are a few steps that you can take to really attain what you want.

Whether it’s five acres, even two acres or, or on up to the hundreds and thousands of acres, how do you afford to buy land and get yourself set up for landownership? 

Know Your Market

You need to start by knowing your market. Where do you want to live? I would challenge you to look outside of that area as well. Even if you end up within an hour of where you want to be, it’s not that horrible. Look outside of the area within a 60-mile radius of where you want to live. When we start moving outward from populated areas it gets cheaper because obviously there’s not as much work there. 

Cheaper Land isn’t Always Better

Keep in mind that really, really cheap land doesn’t necessarily mean that you want to live there. Oftentimes, when you see a lot of land for a cheap price, there may be something wrong with the land. Perhaps the land doesn’t perk, it’s marshy, or the cost of living is extremely low because there is no work available. Of course, if you work remotely or you’re going to try to make farming your job, that doesn’t really matter to you. 

Start Small

The next thing is starting small. If you don’t think you’re going to have enough money to afford a large piece of homestead land, you can start small. The land value stays. It may fluctuate, but we’re not making any more land and someone will always want land. 

When you start homesteading on a smaller scale it will prepare you for the work of a larger property so you can get the most out of it. So take this stepping stone and make it your classroom and enjoy having just something small to maintain. Then you can perfect that by growing into something larger. Don’t be afraid to take stepping stones to the larger property that you may want. You might find you like the smaller property better because it’s less to maintain and absolutely doable. 

Saving for a Homestead Land

The next thing you need to think about is saving up enough cash. You know, I’m all for getting a loan for land, but we have been through several economic crises in our 15 years of marriage. And we have learned that we never want to be in a place again where we don’t have money.

It’s okay to wait and save some money. Even if it’s just the down payment that you save, it’s worth it. You don’t have to rush into anything, take your time. And in the long run, patience will really make the whole experience better for you. And so how do you do that? Well, it really depends on your situation.

Ultimately you’ve got to be self-disciplined enough to put cash aside. Income that you don’t need to put food on the table, put it in a savings account, put it in a fireproof safe, stop spending money, cut corners where you can. You might not need the best internet. Get the lowest one, or maybe you can pay for a hotspot that might be cheaper than your Comcast internet or your cable internet. Do you really need a TV? How can you cut down on your electric bill?

The easiest way for us to really save money has been to set a budget every month. If there’s anything left after that budget each month, we just put it away in savings. We act like it’s not even there. If you take on odd jobs just put away those earnings. Don’t act like it’s there. Try taking on more jobs, more skills. If you know how to build something, build it and sell it. Do work for somebody else that might require you to work late into the night or get up early in the morning. I’ve told people for years if you want to do this thing and you want to be sustainable at it, and you want to be working on your farm and working at home, you cannot be afraid to WORK! You have got to get up early in the morning, and you’re probably also going to go to bed late at night.

It’s just how it works until you get to that desired point where you can kind of step back and say, “Oh, okay, I’ve set up my homestead land the way I want to. Now it’s kind of self-managing itself and I can take a breather.”

Undesirable Homestead Land

The next thing to think about is buying undesirable land. Listening to Homesteaders of America conference speakers and authors of The Independent Farmstead, Shawn and Beth Dougherty, changed my whole perspective about this. Once a person asked them, “How do you afford land?” Beth advised they buy undesirable land. Purchase the homestead land that nobody else is buying within reason. As I mentioned earlier there are reasons you might want to avoid some undesirable land, but make wise decisions and don’t necessarily rule it out. 

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Many people don’t want to buy wooded land. But homesteads can work well on wooded acreage! Pigs can flourish in wooded properties. Of course, you can clear out some of that land. Perhaps the land is an overgrown old pasture that’s never been maintained. You can turn that old pasture into a new pasture again. I would try to preserve as much wooded acreage that is as naturally wooded as possible, but it’s okay to clear out some land for a garden and home then you can work with what the land has given you.

Most of the information you find online is not tailored toward woodland homesteading and farming because most people don’t know how to do that. It is possible though. You might have to learn how to homestead differently than other people. That’s not a bad thing because that’s just part of being a really good steward of the earth. You have to think that indigenous people have been working with the land instead of trying to create land the way they think it should be for centuries.

Don’t be afraid to get your hands dirty and buy that undesirable land because it can absolutely be turned into an amazing farm! Joel Salatin is a great example. When his family bought Polyface Farm it was considered undesirable land. And look at it. It is flourishing now! 

Community Land Purchase

You may also want to consider doing community buys. Find friends or family members who may also want a large piece of property. This doesn’t necessarily mean that you’re sharing the property rights with them, but it does mean discovering if a large piece of property can be subdivided.

This means that you’re splitting up that payment between how many ways that property can be subdivided. The whole property, the whole contract for the land is coming out to the same amount that the buyer is asking for, but each family is paying a portion based on how many acres they’re getting from that subdivided property. 

“Subdivided” doesn’t necessarily mean you’re going to put a subdivision on it. That’s the term the county uses for separating it into different parcels of land that different people are buying and building a house. That’s a really great way to start thinking about how you can help carry a larger mortgage or come up with cash out of pocket. A lot of people are doing this now, and it’s a really great option. Just make sure that everyone on your boat is rowing and not going to bail on you last minute. 

Where to Live While Building a Home

So let’s say that you are ready to buy homestead land. But you already own a house and can’t buy land, build a house, and hold a mortgage as well. There are a couple of different options for you depending on your county and state. In the county I live in, if you own your land outright (with no mortgage) then you can build your own house. You can pull your own permits or you can hire your own contractors. Or you can do it yourself and you can build your own house. 

There’s also the option to do construction loans. You can buy a piece of property, whether you own it outright or not. And then you go through the construction loan process. The loan is dispersed to the contractors you’re hiring while building the house. And then you pay on that loan until your house is completed and you go to closing. 

A construction loan may be a scary option for some people because they may be worried their current house won’t sell. Or that the market isn’t good enough? Then you end up with a construction loan that you can’t pay because you still got a mortgage while waiting for the house to sell. 

In this case, one of the most common things homesteaders are doing is buying land and living in an RV while they build their house. Unfortunately, many counties have restrictions against that and don’t allow you to live in an RV on a property. There may be a process to be approved to live in an RV on the property and many are not approved for RV living. 

So what’s the next step? 

One of the workarounds to that is to go ahead and install your septic, well, and electric then build a one-bedroom apartment over a two-car garage (which you might want anyhow, right?) Or build a barn with a loft apartment in it, depending on the size of your family. If that’s something that you are already going to do, anyhow, go ahead and do it.

Then you can actually live on that property within all the guidelines of your county. You might be living in a smaller space, but at least you’re living there and working the property while building your house. It’s a really great option for people that can’t, or don’t want to live in an RV. 

Changing Laws

Finally, consider changing the laws in your area. Learn how to change the laws so that foreign entities are not driving up the price of land sales. Let’s work to change the laws so we are not held back by agricultural restrictions.

I sent a piece of land to my realtor the other day for a 17-acre parcel. It was a beautiful piece of property but she sent it back and said I wouldn’t want this land because you can’t have any animals on it. It is zoned so you are not allowed to have any livestock on it other than horses. Why would you buy so much land when you can’t even put what you want to on it? There’s another 25-acre property right up the road from us that you can’t make trails through the land. It wasn’t even in a conservation easement. These are just restrictions that previous owners or zoning laws have put on this piece of land. You couldn’t put trails on it. You couldn’t have cows on it. You couldn’t have chickens, you couldn’t have pigs.

How do we fix this? This is where I keep telling you guys to show up. We have got to show up to our local government meetings and demand change because if I’m living in rural America, I want to be able to do what I want to do with my homestead land. 

So I would start encouraging you don’t be scared. Show up at county meetings and talk about it, especially if you live in a rural area. You know, when something’s not talked about it’s, it’s not in people’s minds. Get your community and other people in your community to link elbows with you and start peaceful rallies. 

I’m not talking about going all out or nothing unless you have to, but go to your community and say, listen, we live in rural America. We wouldn’t be able to do the things that we want to do with when it comes to agriculture. And you might be surprised to find out that if you had done it long ago, they may have said, “Okay, let’s change it. Let’s talk about it.” Because the reality is that so many of these communities don’t address it because there’s just not enough talk about it. 

I have watched communities, through Homesteaders of America, actually change laws and zoning in their county because so many of them supported the changes their county or town heard, and they made changes. It just took enough people to talk about it and to bring attention to it, to make that change. And so that’s got to start somewhere, right? 

And why not? Let it start with you.

Changing laws, knowing your area, saving cash, buying undesirable land, among many other things are ways that you can actually attain homestead land that works best for you. I hope that this encourages you to look at it and realize that it could actually be attainable for you. You just might have to put a little more elbow grease into it. Whether it’s buying land or saving up money, or even making a change in your local communities, it’s worth it. All of those steps are worth it.