How to Earn Income from Your Rural Property

Jake Hyland got the hunting bug early in life, and he’s fostered the passion ever since. He has guided on some of the most coveted trophy elk and mule deer properties in the country, and lived in South Dakota for a number of years, hunting whitetail, mule deer, ducks, geese, and pheasants. His family still runs cattle in Colorado and Wyoming, and he and his family call Colorado’s Front Range home. Jake has been working with Hayden Outdoors going on eight years now. He’s an expert in buying and selling farmland, ranchland, dairy stockyards, timberland, hunting properties, earning income from rural property, and water and mineral rights.

This is all to say that when it comes to making a life of your rural property, Jake knows a thing or two about it. “My relationship with land stewardship began at a very young age. I’ve always been surrounded by agriculture and that way of life.” Lucky for us, Jake was willing to share his thoughts on generating some revenue off your land.

Strategies for Earning Income

Renting Land for Farming

There are a lot of different investment strategies with rural property. The most common are short-term and long-term rental – simply turning the keys over to a responsible tenant and collecting rent. However, recreation, farm, and ranchland offer additional income opportunities. The best example of this is farm monetization, which can be broken up into three categories:

• Owner/operator
• Absentee landowner, wherein the owner rents to a farmer tenant
• Tenant farm leases

Tenant farm leases can be flat-cash rent in which the tenant calculates rent on a price-per-acre annual basis. The arrangement can also include half of the rent payment on the front end and the other half in the fall and winter months, post-harvest. “These can be annual, two-, three-, or five-year leases. Typically they’re annual leases that are reevaluated in the spring,” Jake explains.

Rural property owners can also consider sharecropping. “In this scenario, you’re basically going into business with the farmer. The most common arrangement is the landowner making one-third and the farmer making two-thirds with everything else – seeds, maintenance, fertilizer – split the same way.”

Leasing Land to Ranchers

Ranching and grazing are also typically based on a price-per-acre structure with an annual lease and defined grazing window – most often May 1 through October 15. If you’re using a price-per-head model, then a monthly lease is most common. “It basically comes down to your relationship with your tenant,” says Jake. “You’re putting a lot of onus on your tenant rancher because you’re agreeing this ranch can sustain 100 cows per month for five months. If the tenant grazes it down to a parking lot, now your stewardship program is diminished for the next year. You need the rancher and the farmer to be good stewards of your ground.”

Renewable Energy: Leasing Land for Water, Mineral Rights, Solar, or Wind Farms

Water and mineral rights can be complicated transactions depending on your state. Jake has a lot of valuable experience and knowledge in this department. “Mineral leases are complicated but lucrative. Because of the amount of oil and gas exploration going on, it’s a very hot issue.”

It’s also very dependent on the region and the fact you can sell mineral rights separately, which is why it’s so important to work with someone who’s very familiar with the rights in your area. Other natural resources to consider monetizing on your rural property include wind leases for windmills or wind farms. And then there are solar farms. “Renewable energy is a lengthy and time-consuming process, but for those who are willing to jump through the hoops, it can be very lucrative.”

Key factors to consider when leasing land for energy production include:

• Tax implications
• Resources available and the quality and consistency of those resources
• What it will do to your property value, e.g. will the revenue from the energy production outweigh the potential infrastructure required to produce it

Forestry and Timber Sales

Timber is another big revenue maker in certain areas. If your property is heavily forested, logging it to sell the timber is a great opportunity to make some money off your land. Selective logging, tree thinning, and tree removal can have added benefits, including:

• Wildfire mitigation
• Wildlife habitat improvement
• Space for improved road and trail systems

In some states, government agencies will provide grants for selective tree removal to help prevent and manage wildlife. Talk with your local U.S. Forest Service or DNRC office to learn more about these opportunities in your area. Beyond basic logging, timber can also be an income generator through the sale of firewood, woodchips, or speciality woods.

Agritourism and Glamping

Both agritourism, which encourages people to explore farming and ranching experiences as a form of tourism, and glamping are quickly increasing in popularity and offer revenue potential for your property. If you have land that works well for small-unit cabins, yurts, luxury wall tents, or trailers, glamping can be a great money maker.

Things to consider when looking at agritourism and glamping on your property include:

• Proper homeowner’s, business, and liability insurance
• Comfortable accommodations
• Seasonality, especially for farming-specific activities
• Staffing and maintenance
• Food
• Marketing strategies and costs

Offering Hunting and Fishing Leases

According to Jake, it’s common to lease for a specific type of hunting. For example, deer hunting is for you while waterfowl hunting land is leased. If you own a 1,000-acre property, you can lease 500 acres and keep the remaining 500 private, ensuring there is a clear line between the two. “As the old saying goes,” Jake says, “good fences make good neighbors.” These leases can be seasonal, relative to specific hunting seasons.

Fishing can be a little trickier, but certainly not impossible. Depending on the state, you might need to go through your local fish and wildlife agency. “Have a lease drawn up with an attorney who knows what they’re talking about.” Jake also recommends getting liability insurance specific to hunting and fishing on private rural land.

In both cases, safety is paramount. Make sure guides, outfitters, or others who are leasing the property for hunting and fishing are up-to-date on all relevant hunter’s safety education, hunting regulations, hunting and fishing seasons and licenses, and first aid.

Conclusion: Building a Sustainable Income Stream

If you’re looking to make money on your property, or investing in revenue-generating land, Jake offers a few pieces of important advice.

“Using a recreational broker is more important today than it’s ever been. These professionals live this life first-hand, and know the ins and outs of property types and usage.” He goes on to point out the importance of what drew you to the land in the first place. “Don’t lose sight of why you bought the recreational property or rural piece of real estate. You bought it for peace and solitude, and the more you open up income, the more you increase the opportunity for intrusion.”

He cautions that this type of life and land investment is not a quick turnaround; it’s not a get-rich-quick endeavor. Instead, you’re probably looking at a 15- or 20-year plan. “Do your research on it. Know what you’re getting into. Call your local broker; they have a lot of first-hand knowledge of the region.”

As an avid lover of the land and someone who has lived his entire life exploring the hidden corners of the country, Jake shares this key insight about protecting it: “Land is a great investment. Don’t forget that we can’t make any more of it. It’s a limited resource; we’re just borrowing the ground.”