Let’s get down to business here with land. We are going to break this down into 2 options because let’s face it…you only have 2 options either Cash or a Land Loan.
How about we start with paying with Cash…
This is the preferred way of going about this way of living. I must prepare you that what you have grown to know or way of life will be a little different.
The first thing is you need to have an idea of how you want to live… What does that mean?
Are you wanting to:
- Use solar energy?
- Use wind energy?
- Heat your home with wood burning stove?
- Have a garden?
- How large of a garden?
- What kind of animals?
- What kind of house?
- Stay in the same state?
- Move to another state?
And now you can see why it is good to start planning this out before you actually begin your land hunt. When you can begin to answer those questions that will start to lay the ground work for what type of land you are going to need.
After you have decided what route you want to take it is time to do some budgeting with the cash you have.
What we did is break everything in to groups like
And then divided the money up that way…
If we had $100,000 to work with (which we had less than that, but you get the idea) then you would say we are going to spend $30,000 on land, $40,000 on a house and then we will budget $20,000 to get a well drilled, septic system, driveway and money to garden.
Yes, I am aware that the amount does NOT in fact equal $100,000. I left $10,000 to keep in the bank for expenses that you are not planning on since let’s face it… Things DO come up that we did not expect so it is always wise to keep extra in the bank for an emergency or unexpected items.
Now on to the Loan:
Getting a loan is not the preferred way to go about homesteading however sometimes it is what it is and that is how you can actually afford to make this transition.
I will tell you right now to use caution… Not because a loan is bad, however, when it is a loan it is VERY easy to overspend. It does not seem like a big deal to take an extra $40,000 you really did not need because it does not make your payment go up that much over 30 years.
Remember… the less you borrow the less you have to pay back and the sooner you get it paid off. One thing to keep in mind when getting a loan on land it is getting harder and harder all the time to get a loan on land, the banks are not wanting to invest in land like they use to before the bottom fell out.
The principals are the same as when you have cash in the manner of get only what you need and create a budget.
Also something to keep in mind is that if you have a loan and you are wanting to live more rural then you are GOING to have to drive quite a distance to get to work every day (unless you work for yourself or from home). Even if you do work for yourself if something happens and you have no choice but to drive to work how far is that going to be for you?
Remember that the gas it takes plus the wear and tear on your vehicle WILL add up.
Also one last thing about getting a loan that you need to keep in mind is that it is easy to go back to the old way of doing things.
Our experience was after looking for land for a long time you get frustrated and say…” forget this, I will just get a mortgage again and just move on with my life.”
We have almost fallen in to that MANY times because it is easy and requires no discipline on our part. Let me be clear that I am in NO way saying if you choose a loan that you have no discipline that is just what we struggled with and was something that we almost fell back in to (just want to share our struggle with you so you can understand where I am coming from).
Oh yeah! I almost forgot if you can pay cash for your land and just take a loan out to build your home that will make life easier and your wallet fatter in the long run ;).
Keep your eyes open because the next post is going to be about what you need to look for on your land and why land is so sacred.
What to expect when you are looking for your land is what is going to be up next on the postings. Along with what do you need to be looking for on that “perfect piece” of land that you desire.
With much love and blessings on YOUR Journey!
P.S. If you are looking for a place where you can become part of a community dedicated ENTIRELY to the homesteading life style (weather you go full throttle or you just want to live a more organic life style) please sign up for newsletters, giveaways, and just more information here.