Buying Farmland in Tennessee — A Guide to Buying Your Tennessee Dream Farm

Rich and fertile farmland has always been an attractive asset for investors, especially in states like Tennessee that have a strong farming heritage and well-developed agricultural infrastructure. However, if people aren’t familiar with agriculture or are new to investing in land plots, choosing the “perfect” spot for a Tennessee farm can be challenging. Not only is it difficult to choose the right zone in TN to build a farm, navigating the legal and financial paperwork is super stressful.

How to Buy a Farm in Tennessee — Basic Steps and Strategies to Purchase Your TN Pasture

While there are many specific strategies to buy farmland in Tennessee, the general outline for this process is similar. A thorough review of how people buy land in Tennessee is a great way to get started in this exciting market.

Buy a Farm in Tennessee

Research Tennessee’s Farming Opportunities and Market Dynamics

Before looking for specific land plots in Tennessee, brainstorm ideas on why and how you want to enter this state’s agricultural sector with preliminary research. Although Tennessee is known to be an excellent all-around state for growing crops and raising livestock, it has a diverse geography and topography, and some areas may not be well-suited for your specific goals. Currently, some of the major crops in Tennessee include soybeans, corn, hay, and wheat; and poultry meat like turkey and eggs are major livestock-related exports. While that doesn’t mean you need to get involved with any of these specific products, it’s worth keeping in mind as you explore homestead opportunities in Tennessee.

Define Your Tennessee Farming Objectives

After researching the opportunities Tennessee has to offer, you should have a clearer understanding of your primary investment goal. Write down precisely what you’re looking for with a Tennessee farmland investment, and use this information to guide your search for attractive areas in the state. The more specific you describe the features and tangible benefits you want to see in your Tennessee farm, the easier it will be to pinpoint a good fit and measure your investment performance.

Start Exploring Different Tennessee Land Zones and Properties

Now that you have a clear idea of why you want to enter the Tennessee farm market, it’s time to identify counties and available areas with a suitable climate, soil quality, and water availability for your intended use. Research what crops typically grow well in these regions and whether there are farming communities already in place. Also, consider the proximity of farms in these counties to major markets (e.g., Nashville and Knoxville), transportation infrastructure, and local amenities. After scouring land for sale throughout the Tennessee countryside, you should come up with a shortlist of investment possibilities.

While there are many viable rural markets for farmland in Tennessee, here’s a list of potential counties to get started looking for investment property:

Establish Budget Constraints and Funding for a Tennessee Land Purchase

Tennessee Land Purchase

No matter how fantastic a farmland opportunity is, there’s no point in pursuing it if it’s outside your available price range. Be sure to determine exactly how much capital you can comfortably afford to invest in Tennessee land for farm development, including expenses for equipment (e.g., a tractor and harvest tools), improvements, and land or property development. Also, remember to look into relevant regulations for farmers and tax codes in Tennessee to get a complete picture of how much money you need to maintain your operations. Having a clear understanding of how much you can afford to put into a Tennessee barn investment ensures you stay within your realistic limits and avoid an unnecessary debt burden.

Perform Due Diligence Screening on Tennessee Acreage

When you’ve identified Tennessee land plots that meet your preferences and budget criteria, it’s a good idea to schedule on-site visits to assess the area firsthand. Pay careful attention to each land’s topography, soil quality, and water sources to get a feel for a fair value of the property, as well as the time and labor you’ll need to put into maximizing its profitability. If there’s existing infrastructure and utilities on the property, consider their condition; if not, figure out whether it’s feasible to build new features or units and how much it will cost you. It’s also important to consider zoning regulations and land use restrictions in different counties and whether these laws conflict with your investment expectations. Consider hiring experts such as zoning inspectors or using tools like soil quality testers to get a clear read on the potential of your Tennessee land.

Optional: Consider Professional Assistance from Tennessee Land Brokers

On the subject of hiring zoning testers, you may want to consider working with other legal, environmental, or real estate professionals in Tennessee to make the land acquisition process smoother. While you don’t need professional assistance, people involved in fields like Tennessee land brokerage, real estate, and environmental consulting can offer valuable insights into purchasing land and inform you on potential challenges, legal complexities, and different financing opportunities. Again, it’s not a requirement to hire third-party help — and this will add to your total expenses — but it may be worth the extra cost for anyone overwhelmed by the complexities of buying farmland in Tennessee.

Take Out A Tennessee Land Loan, Farm Credit, or Another Financing Plan

When you’ve got your heart set on a Tennessee land tract, it’s time to consider the best financing options for your situation. For those interested in working through traditional financial institutions, it’s most common to negotiate a land loan either with a Tennessee bank or credit union. Tennessee land loans work similarly to traditional mortgages, but you’ll put up your farmland instead of using a house as collateral. Also, since it isn’t as easy for financial institutions to assess the value of land versus pre-built property, land loans tend to come with faster repayment schedules and higher interest rates.

Aside from land loans, some government-backed programs support farming initiatives in states like Tennessee. Most notably, the Farm Credit system gives financial assistance to Tennessee landowners in the farming and livestock fields with favorable rates and loan categories. Whether you opt for a land loan or a Farm Credit, take the time to negotiate the best payment terms considering the land’s current condition, market trends, and any necessary improvements.

Close Your Tennessee Farm Deal

Buying Tennessee Farmhouses

As you’re reaching the term agreement for your Tennessee land loan, you’ll likely need to go through a few due diligence screenings, fill out legal paperwork, and finalize any ongoing inspections. This is the time to address any legal or financial issues and questions you may have with your financial institution or your land broker. For instance, be sure there are no legal loopholes with title ownership or tax liens so the ownership transition process is as smooth as possible. Also, be sure to secure appropriate liability and property insurance coverage to avoid potential legal drama. When you no longer have questions, sign your name to secure your Tennessee land deal.

Is Buying Tennessee Farmhouses The Best Move For You?

Buying farmland in Tennessee takes a lot of careful planning and research, but it may be worthwhile for investors with a deep interest in fields like agriculture and livestock. Thanks to Tennessee’s varied topography and favorable climate, it’s one of the most lucrative states for farmers, and a savvy investment may pay off mightily if people find the right area at the right price. While it may be tempting to jump headfirst into a hot land market like Tennessee, slow and steady is always the best strategy for success when searching for farmland opportunities.