The Accidental Smallholder Forum
Smallholding => Land Management => Topic started by: Wood on February 06, 2017, 12:25:19 pm
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Hi,
There is a piece of land next to us that has recently come up for sale. It is around 2 arces and has a large pond / lake on. It used to be leased by a fishing club who stocked the lake and paid around £2000 per yr ion rent. However they have moved out and taken as much of the stock as they could net.
Allot of the fishing pegs are now rotten and there are alot of reeds / growth on the lake edge.
Can anyone give me an idea / guess as to what the land is worth? It is obviously worth more to me than anyone else since it is next to my smallholding.
Thanks
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That is a "how long is a piece of string" question. Anything is basically worth what someone will pay for it depending on how much they want it and can afford. There are so many factors to consider. Might someone see a business opportunity for example.
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Think you will need some more information about the legal side first Wood. Are there any restrictions on the use or any access rights or issues? I'd be reluctant to buy a pond with the current Avian Flu issues because of the attraction to migrating ducks and geese.
You may find that the 'value' depends simply on what someone is prepared to pay for it, rather than some formula. However that figure may not meet the owner's expectations and any purchase negotiation could drag on for years.
How much profit do you think you could produce from it? Would it exceed the cost of borrowing, or if you are lucky enough to have cash, the interest invested elsewhere?
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I totally agree and agree it is probably worth more to me than anyone else. When we bought the small holding we were offered the lake for £70000 and at that point it was being leased by the fishing club.
They have now left since the landlord wasn't maintaining the lake as part of the agreement. However the land owner has offered it to us for £80000 but I think he is just having a punt.
Hence why I asked if anyone had any idea of its market value?
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minimum land value = £20,000
Maximum land value = £100,000
Maximum value as "business or potential business" = anyone's guess!
This is based on us spending years chasing small plots of land. a small plot of land, with access is generally considered to be worth £10,000 per acres, plus or minus a couple of grand depending on where it is in the country, etc etc. The trouble is, anything that looks like it could have a nice caravan on it, and one day a house, will fetch £100,000 no problem. You're best hope is if it goes up for sale as a bit of land with a pond. If it goes up for sale as a going concern, then it may well be silly money.
Do you know the landowner? sometimes it's worth discussing an offer.... of course sometimes it's not..
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I hadn't considered the Avian Flu since there are a few ducks on the lake.
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I hadn't considered the Avian Flu since there are a few ducks on the lake.
Avian flu wont affect the price. land/water owners are not liable for wild birds.
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The water birds will be there next to your smallholding regardless of whether you buy it or not. Can't see how that increases the risk.
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If your buying at the 20,000 - 100,000 youd need to see the past accounts of the business your buying off as its the business your buying - if its a lake in a 2 acres field - pay no more than 10,000
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if that
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How often does land come up for sale right next to you?
It's worth whatever you think it's worth and according to what you think you could do with it.
If you got it for £10,00 an acre or less I think you'd do well. You won't make a fortune from fishing but there has to be some income there. More profitable is camping/caravanning. You can start off with pretty basic amenities and build it up.
If it's a pretty site you could advertise it for weddings. Marquee, toilets and generators can all be hired for the occasion.
I bought 18 acres with a lake 8 years ago and believe me it can be profitable if you find a use that suits you. (Certainly a lot more income from a lot less effort than running a smallholding!)
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I'd be reluctant to buy a pond with the current Avian Flu issues because of the attraction to migrating ducks and geese.
However that figure may not meet the owner's expectations and any purchase negotiation could drag on for years.
A lot depends on whether the owner needs to sell it now or not. It's worth less just now becasue of the bird flu.
If not on the market yet, go and see him/her and ask. Why would it be worth more to you than anyone else? Land is land - it could have building potential
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I'd be reluctant to buy a pond with the current Avian Flu issues because of the attraction to migrating ducks and geese.
However that figure may not meet the owner's expectations and any purchase negotiation could drag on for years.
It's worth less just now becasue of the bird flu.
really?
if i was looking at it, i would not be thinking about the next 2 months but the next 20 years
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Bird flu is a red herring and totally out the equation.
How close to habitation is the land? How much of it does the lake cover? Would it be of interest the pony brigade? Or is it just amenity land? Each affects the value. Plots like that round here also attract conservation groups who are determined that they are natural havens that do not need interference from man.
I suspect that at the lowest end of the valuation the 2 acres would come in at £35,000 and as a serious business proposition it could be the value that it is being offered to you. You have to decide if you would aim to run it as a business or if you only wish to extend your current holding, this would determine its value to you.
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no one has asked why the fishing tenants left. did the fish have parasites or infection? talk to your local EA agent to see if there are restrictions in place before considering as a fishery
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Its a difficult one.. If a fishing club was to buy it it could be worth a fair bit. But if their not interested I'd say 20k would be about right for 2 acres. Although it depends on your area. If there's lots of horsey people willing to pay a lot for small fields then they'd push the price up.. I guess it depends how much cash you have and how much you want it?
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Another angle is to look at it as a straightforward investment, the same as any other.
If it pays an income of £2,000 p.a., and incurs upkeep (weed cleaning, mowing) costs of £500 p.a. say, that's a net income of £1,500 p.a. Then insert the 'yield' value of your choice; let's say 5% for now. That indicates a value of 1500 / 0.05, which equals £30,000.
Then adjust upwards or downwards depending on whether you think the income will go up or down in time, whether a change of use to a caravan park could get you more profit, etc etc.
Does that help?
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Another more emotional way to look at it is to ask yourself if I just found out that the land had just sold to somebody else for £X, what would £X have to be for me to say:
a) never mind - I didn't want it that much anyway,
b) darn, I could maybe have stretched to that, or
c) damn! I'd have paid that much for it in a heartbeat!
That gives you a decent spread of numbers, which you can then compare with the more rational result in my last post. The true answer then probably lies somewhere in the middle!
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Another more emotional way to look at it is to ask yourself if I just found out that the land had just sold to somebody else for £X, what would £X have to be for me to say:
a) never mind - I didn't want it that much anyway,
b) darn, I could maybe have stretched to that, or
c) damn! I'd have paid that much for it in a heartbeat!
That gives you a decent spread of numbers, which you can then compare with the more rational result in my last post. The true answer then probably lies somewhere in the middle!
What Womble said!
It's worth however much its worth to you.
We happily paid over the odds for the field next to our cottage as we wanted it. No regard to what it was worth to someone else who didn't live next to it.