How To Buy Land For A Hobby Farm

For most of America’s history, small farms, including hobby farms, accounted for a majority of agricultural properties. Today, small family farms account for less than half of the country’s agricultural land and only 18% of total agricultural production. But that doesn’t mean they’ve fallen out of favor – or that they’re not a worthy investment for people who want to operate a small, personal farm for the benefit of their family and community. 

Here’s what to know about buying land for a hobby farm, including what to consider when looking for the right property for your needs. 

What is a Hobby Farm?

A hobby farm is a small farming operation run for personal enjoyment and sustenance, rather than as a primary source of income. 

Hobby farm owners can make money off of their property, such as by selling off some of what they produce. However, hobby farms are not considered for-profit businesses by the IRS, and thus owners do not pay taxes as a business (or deduct expenses as a business). 

The only real limitations to what you can grow or cultivate on a hobby farm depend on your location, your skills, and the size of your property. Some small farmers focus solely on vegetables and fruit, others grow cut flowers, and still others keep chickens, dairy cows, sheep, llamas, alpacas, or honeybees. Some even have fish farms or worm farms, or grow grape vines for native, homemade wine. 

What starts as a non-profit hobby farm can easily end up being a highly profitable small farm. It all starts with the land, and making sure you have the right kind of property – and enough of it – to achieve your farming goals. 

Buying Land for a Hobby Farm

Buying land is the first step in starting a hobby farm. It’s also one of the most important, since the quality and size of your property will have a huge impact on what and how much you’re able to produce. No matter your region or goals, here are some things to keep in mind as you go about your search. 

Understand Your Budget

There’s plenty of cheap land for sale, but farmland prices vary widely across the U.S. You need to know what you’re working with in terms of budget, including how much cash you have on hand and how much you’ll need to finance. 

As you run the numbers, make sure to account for other expenses of running a hobby farm, including land and building maintenance, seeds and fertilizers, equipment, permits, and property taxes. If you’re buying raw land, you will also need to set aside funds for land improvements such as running in utility lines, adding fencing and enclosures, and creating access roads. 

Search Available Listings

Explore farm land for sale on LandHub to view available properties, narrowing down your search as needed by state, acreage, or cost. Once you decide where you want your farm to be located, we recommend working with a qualified local real estate agent who can guide you through the process of viewing properties, making offers, and closing the deal. 

Make Sure the Property Meets Your Needs

There are several factors to consider when choosing land for a hobby farm. To start, the property you go with should generally be designated as A-1 zoning, also known as agricultural zoning, which allows you to raise animals, grow crops, and store farming equipment on your land.

You will also want to consider the quality of the land itself, particularly as it pertains to farming. The climate and growing conditions should be suitable for what you intend to farm, as should the soil quality. Finally, consider the size of the property and whether it’s ideal for your needs. A hobby farm is usually less than 50 acres, and many operate on 10 acres or less. 

Assess the Property in Person

There’s a lot on the line when buying land for a hobby farm, so you’ll want to do your due diligence before agreeing to a purchase. Go visit the property in person at least once, and do a full walkthrough to get a lay of the land. Bring in a professional to test soil quality and water too, as well as a building surveyor if you intend to erect a residence or other structures. 

Making a Profit from Your Hobby Farm

Farmers’ markets and home sales offer two potentially profitable avenues for hobby farmers, as do programs like Community Supported Agriculture (CSA). 

If you end up deciding to transition from a hobby farm to a for-profit farm, you’ll be glad to know that it’s a relatively easy process. For the logistical side of things, be sure to check out the IRS’s Hobby Farm Loss Rule (specifically Form 1040, section 183; read more about that here), and familiarize yourself with what expenses you can deduct. 

So is buying a hobby farm a good investment for a land purchaser? That depends on what you put into it and what you hope to get out. If you’re planning on going heavily into debt to buy a hobby farm, it’s probably not the greatest idea. If, however, the cost of the land plus your operating costs don’t exceed what you can spend, then forge ahead. There’s so much to be gained from owning and operating a hobby farm, and much less at risk when you don’t use your farm as your primary source of income.