Is a Rural Retirement Right for You?

Rachel Koning Beals
March 28, 2012

Would you be willing to exchange Thai restaurants and unwavering wireless Internet for homegrown produce and birdsong?

If so, a rural retirement may suit you well. The bonus: Rural acreage is a rare segment of the real estate market that weathered the Great Recession.

[See 10 New Retirement Hotspots.]

According to a report from the Lincoln Institute of Land Policy, residential land values in the United States are down nearly 70 percent since peaking in the second quarter of 2006. During that same period, the value of cropland in the contiguous United States rose some 20 percent, according to the U.S. Department of Agriculture. That's also the downside; higher values mean higher points of entry for would-be buyers looking to get into the rural market.

But the category looks poised to grow even more (individual markets may vary, of course.) Higher overall commodities prices lift land values. And while commodities prices can be volatile, a rising global middle class population that's sure to eat better and drive more could keep a floor under the market. That helps land prices.

"Idyllic lifestyle-seekers" want a fresh start and a tangible investment, says Dan Duffy, CEO at the rural and coastal real-estate search network United Country, based in Kansas City, Mo.

"You can't create more land--it's a finite investment. And during the downturn, agricultural land produced a dividend-like yield in the 5 percent to 8 percent range, plus capital appreciation. This, while some bond yields hovered at zero or worse," Duffy says. Land is also broadly characterized as a "real" asset. It's tangible, and that makes it an inflation-fighter.

Land investment can be two-pronged: The land itself is worth something, and what it might produce has a separate value. There are other money-making possibilities: rental income, such as for livestock grazing, cash crops from corn to timber, lodging fees for cabins or a bed-and-breakfast, organic-vegetable selling, fishing and hunting rights, wind power or natural gas rights, and profiting from eco-tourism.

Crickets can be louder than traffic. A trend of retirees leaving the suburbs for small town and country life--a move that demographers call "out-migration"--was underway before the economic downturn. It held up relatively well during that period, although was slowed somewhat by weak home-selling markets that kept retirees and soon-to-be retirees in their existing homes. But with the number of baby boomers exiting the workforce, it's a trend that looks to continue.

[See the 10 Sunniest Places to Retire.]

USDA data show a "deconcentration" of population near metro centers. Urban areas will see a net loss of people age 55 to 75, while in non-metro areas, that age group will increase by 1.6 million nationally during the next 10 years.

Remember the Alpaca farm craze a few years back? Turning into a rancher overnight isn't for everyone. Luckily, there are dozens of ways to extend your "career" in the country. If remote life isn't quite your aim, small-town retirement hubs may allow for a service-focused second career--think restaurant or real estate office proprietor, or perhaps hanging out a tax-preparation shingle after a long accounting career at a Fortune 500 company.

Many retirees want land they can develop or recreate, at least partially, for their own residential or hobby use. A land purchase can be a wise "mini step" toward retirement: Buy the land while still working in a populous setting, rent it out, move there eventually, says Duffy.

Prime school districts may no longer top the list of real estate must-haves, but retirees want a certain level of service and cultural amenities, whether they're in population centers or not. This need may help drive their decision-making. Plus, there are potentially heavy maintenance costs and overall land management responsibilities that may turn off some buyers. An acreage is a big purchase, one that requires a considerable amount of due diligence. (Real estate firms are increasingly getting into the land-management business, so property owners can pay for help.)

Curtis Seltzer, a rural land investor and author of How to Be a Dirt-Smart Buyer of Country Property, says rural buying should start at the ground up, literally, with a focus on dirt. "Most buyers from the city and suburbs, including me, focus first and almost exclusively on the country house, whether existing or planned," writes Seltzer. "This comes at the expense of paying attention to the dirt on which the house stands and which surrounds it. We do this, I think, because all of us have a passing familiarity with houses. So we evaluate country property in terms of what we know rather than what we don't."

[See 10 Places to Buy a Retirement Home for Under $100,000.]

Seltzer offers these tips:

-- Look first at how the land lays--its topography. Which direction do its slopes face? How steep are they? If the land is flat, will it drain quickly or hold water because the subsurface contains a lot of clay? The surface vegetation and the feel of the dirt in your hands will give you an initial reading. Topographically interesting land is usually more interesting to spend time on, but it's also more expensive to work with and much harder to work against.

-- Second, look at your soils. Different soils have different characteristics and capabilities which will determine what you can do with your property at a reasonable cost. Your first stop in scoping property is to pick up a copy of the county's Soil Survey at the local U.S. Department of Agriculture office. County-level aerial maps and soil-survey information are available for some states and counties, and can be found at

-- Third, look at the location of your dirt. Will it be hard to get to in bad weather? Is it subject to flooding, earthquakes, mudslides, windstorms, fires, and prevailing weather? If you have shoreline, is the land low (bad) or high (good)? Is the shoreline eroding? Is the land facing in the right compass direction for your plans?

-- Finally, look at your dirt in terms of proximity to local goods and bads--hospital, fire station, public water and sewerage, rescue squad, floodplain, job opportunities, and distance from your current residence, post office, bank, supermarket, and objectionable facilities--however you care to define them.

Trending now. United Country's Duffy says rural destinations in the Mid-Atlantic are drawing rising interest for their temperate climate, mix of mountains and shoreline, and reasonable distance to centers such as Washington, D.C. This way, retirees may maintain consulting positions and ease into their retirement. One micro-trend is what he terms the "half-backers." It's a population that spent their working years in the Northeast, then retired to Florida, but are now finding unattractive pricing (or lack of housing or elbow room there) and are moving halfway back to the Northeast.

Duffy says "small" ranches of a few hundred acres in Texas are popular searches on his firm's website. He also notes increasing migration from California to the "unspoiled" and less-expensive mountain retreats of Colorado, Montana, and Idaho.