Are you debating whether to own or lease property?
With few exceptions, owning makes the most sense, says Jim Walley of Ellisville, Mississippi. The president and owner of Walley Properties, LLC, Jim founded his company 40 years ago to help South Mississippi landowners with land acquisitions, timber sales, forest management and appraisals. Walley is a real estate appraiser, broker and certified forester.
1. Pride of Ownership
“The first advantage is what I call pride of ownership,” says Walley. “When someone puts their name on the mailbox, it gives them that sense of ownership.”
However, there are circumstances that can make leasing appealing. “Perhaps you don’t want to commit to owning property for a long period of time,” says Walley. “With a lease, you have a start date and an end date.” He notes that hunters or others who plan to spend limited time at a property might consider leasing. Also, he says, “A lease would possibly be cheaper than a mortgage.”
In most cases, however, he believes owning is the way to go. “It’s that empowerment of being able to say, ‘It’s ours, we own it,’” he explains. “It’s ‘We’re going to our farm,’ or ‘We’re going to work on our nature trails,’ or ‘We’re going to our creek.’”
2. Owning gives you more control
Owning provides other advantages as well. “When you have leased land, your use and enjoyment is subject to the lessor,” Walley warns. “If they decide they want to do heavy equipment work or herbicide applications, plant trees or harvest timber or whatever, you really have no say about that. When you own the land, you have control, whether it’s timber harvesting, land management, planting trees, hunting, or other outdoor activities.”
3. There are tax advantages when you own
Owning also provides tax advantages. “When you purchase the property, you should be able to write off your mortgage interest deductions and your ad valorem or property taxes and some equipment that you use on the property, like four-wheelers and tractors.”
4. You can pass it down to heirs
Walley Properties caters mostly to clients looking for permanency, often families. “Most recreational uses are going to be family activities, whether it be hunting, fishing, nature trail walking, riding ATVs, having a place for the kids and grandkids to target practice with a BB gun, or have a weekend retreat getaway,” he says. “Our clients want a camp overlooking a creek or a cabin overlooking a pond or a lake. They want something that they can put sweat equity into to improve it. Our clientele want something to share with family and friends.”
When they own the land, “they know that their children and grandchildren will have the same opportunity to have a place where they can go and experience the rural outdoor life” for generations to come.
Tip: To Learn more about passing land to your heirs, read our article, The Best Way to Leave Land to Your Family Members.