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What to Look for When Purchasing Farmland in Southeast Minnesota
Purchasing farmland is a significant investment—whether you are an experienced farmer looking to expand your operation, an investor seeking agricultural land, or someone interested in owning acreage for a long-term lifestyle or family legacy. In Southeast Minnesota, farmland can offer productive soils, open space, and opportunities for farming, recreation, and rural living.
But not all farmland is created equal. Before making an offer, it is important to look beyond the acreage and consider the land's productivity, location, access, improvements, and long-term potential.
Here are some of the most important things to look for when purchasing farmland in Southeast Minnesota.
1. Evaluate the Soil Quality
One of the first things to investigate when buying farmland is the quality and productivity of the soil. Soil type can have a significant impact on what crops can be grown and how productive the land may be.
Look at factors such as:
- Soil types and classifications
- Drainage
- Organic matter
- Erosion potential
- Cropland productivity
- Past crop performance
- Wet areas or poorly drained ground
A property with a higher percentage of productive tillable acres may have a different value and income potential than a property with the same total acreage but more wooded, wet, or non-tillable ground.
2. Determine the Tillable Acreage
The total acreage listed on a property does not necessarily represent the amount of land that can be farmed.
When evaluating a farm, determine how many acres are actually tillable and how the remaining acreage is being used. Pasture, woods, waterways, wetlands, building sites, and other areas can all affect the property's agricultural value.
Ask for maps, aerial imagery, and available information showing the property's land use. Understanding the breakdown between tillable acres and other land uses can help you better evaluate the overall investment.
3. Consider the Location and Accessibility
Location matters in agriculture just as it does in residential real estate.
Consider how conveniently the property is located in relation to:
- Major roads and highways
- Grain elevators
- Local markets
- Farm supply businesses
- Equipment dealerships
- Neighboring farmland
- Your existing farm operation
You should also evaluate the property's road frontage and access. Reliable access for tractors, combines, trucks, and other large equipment is essential.
For farms divided by roads, waterways, or other properties, consider whether the layout allows for efficient movement of equipment between fields.
4. Look at Drainage and Water Management
Water can be one of the biggest factors affecting agricultural productivity.
Examine how water moves across the property and look for areas that may experience standing water, flooding, or poor drainage. If the property has tile drainage, ask about the location, condition, and age of the system when that information is available.
For properties with drainage improvements, understanding what has been installed—and how it has performed—can be an important part of evaluating the land.
5. Review the Farm's History
A property's history can provide valuable insight into its potential.
If possible, review previous cropping patterns, yields, conservation practices, fertilizer applications, and other available information. A history of consistent production can help provide a better understanding of how the land has been managed.
If you are purchasing land that is currently rented to a farmer, find out whether there is an existing lease and understand the terms before moving forward.
6. Understand the Existing Lease
Many farmland purchases involve land that is already leased to a tenant farmer.
If the property has a current lease, determine:
- When the lease expires
- Whether it is written or verbal
- The rental rate
- Who is responsible for expenses
- Whether there are renewal provisions
- How the lease affects possession after closing
The lease can have an impact on both the timing and financial considerations of your purchase, so it is important to understand the agreement before making an offer.
7. Inspect Buildings and Improvements
Some farms come with much more than tillable acreage. They may include barns, machine sheds, grain bins, livestock facilities, homes, fencing, wells, septic systems, or other improvements.
Determine the condition and usefulness of these improvements. An older building may have value for storage or agricultural use, while another may require significant repairs.
Consider both the current value of the improvements and the cost of maintaining, repairing, replacing, or removing them.
8. Consider the Property's Long-Term Potential
Farmland is often purchased as a long-term investment, so think beyond the current growing season.
Consider whether the property could support future plans such as:
- Expanding an existing farm operation
- Building a rural home
- Adding livestock facilities
- Creating recreational opportunities
- Preserving land for future generations
- Diversifying agricultural uses
Local zoning, land-use regulations, easements, and other restrictions may affect what can be done with the property. Be sure to investigate these factors before purchasing.
9. Research Easements, Property Boundaries, and Restrictions
Before purchasing farmland, review the property's legal description and investigate any recorded easements, access agreements, utility easements, conservation restrictions, or other encumbrances.
You should also understand where the property boundaries are located and whether there are any boundary questions with neighboring properties.
A title search and professional survey, when appropriate, can help uncover issues that may not be obvious during a property tour.
10. Know Your Numbers
Perhaps the most important part of purchasing farmland is understanding the financial picture.
Consider more than just the purchase price. Your overall investment may include:
- Property taxes
- Financing costs
- Insurance
- Drainage or conservation improvements
- Building maintenance
- Equipment and operating costs
- Property improvements
- Potential rental income
If the land will be rented to another farmer, estimate the potential income and compare it with your ownership costs.
For owner-operators, consider how purchasing the property could affect your existing operation, including equipment, labor, transportation, and production costs.
11. Work With Professionals Who Understand Farmland
Buying farmland is different from purchasing a typical residential property. Having professionals who understand agricultural real estate can help you ask the right questions and evaluate the property from both a real estate and operational perspective.
Depending on the property and your plans, your team may include a farmland-focused real estate professional, lender, attorney, tax professional, soil specialist, conservation professional, or other agricultural experts.
An experienced local real estate professional can also help you understand comparable sales, local land values, property characteristics, and opportunities that may not be immediately obvious.
Find the Right Farmland in Southeast Minnesota
The right farmland purchase starts with understanding exactly what you are buying—not just how many acres are on the listing.
From soil quality and tillable acreage to drainage, access, leases, improvements, and long-term potential, every detail can affect the value and usefulness of a farm.
At United Country Midwest Home & Farm Realty, we understand that agricultural real estate is about more than buying land. It is about finding property that fits your operation, investment goals, and vision for the future.
Whether you are looking to expand your farm, invest in agricultural land, or purchase a rural property in Southeast Minnesota, our team can help you navigate the process.
Looking to buy or sell farmland in Southeast Minnesota? Contact United Country Midwest Home & Farm Realty to discuss your goals and explore available opportunities.