What to Do After Inheriting Land in Arkansas

Receiving raw vacant acreage passed down through generations in Arkansas presents both blessings and challenges for those assuming new titles, tax duties and decisions over whether to build, farm or look to sell holdings based on personal situations. With average cropland values across the state hitting $4,070 per acre as of 2022 according to USDA data, inheriting even small plots holds meaningful value to chart thoughtful courses forward stewarding the land or liquidating for other investing goals.

Yet appraising true market values based on location attributes, development potential and encumbrances requires working with real estate attorneys and land surveyors upon receiving bequeathed property to determine strategic fits based on intended usage timelines along with budget and skills to manage significant rural acreage. This overview covers essential steps gaining clarity around possibilities and responsibilities coming into land inheritances across Arkansas.

First Steps to Take After Arkansas Land Inheritance

When someone passes away and leaves you a parcel of land in Arkansas, the first step is ensuring the property is safely transferred into your name. Work with an Arkansas probate attorney to handle the legalities like filing paperwork with the county clerk so the deed reflects you as the current owner. This protects against disputes down the road over who rightfully owns the land.

Next, travel to visit the inherited property in person, regardless if you plan to sell the land or keep it. There may be squatters, garbage dumps or other issues that need addressing but are hard to evaluate from afar. Simply walking the land gives invaluable first-hand perspective on aspects like:

• Visually survey for any illegal trespassing or unauthorized activity happening on the land.
• Personally check if any structures on the property seem unsafe or require securing in the meantime.
• Verify exact acreage markers and physical property boundaries align with deed filings.
• Document geographical features, terrain, wooded areas, soil quality, natural resources etc.
• Take extensive photo documentation and video recordings walking the land to retain helpful records of the on-site state of inherited property at transfer.

As you thoroughly assess the inherited real estate parcel, consider additional factors like:

Location - Where is the land situated in Arkansas? Properties near growing cities like Fayetteville, Little Rock or Jonesboro generally hold value better long-term as development expands outwards. Check how far the inherited lot is from core metro amenities.

Access - Can you easily reach the property? How is road access? Landlocked parcels severely limit transport and usefulness. See if accessed via unpaved roads prone to weather damage or secure concrete thoroughfares.

Terrain & Soil - Flat, clear-cut land is inherently more usable than steep mountainsides. Fertile soil makes property more suitable for farming, livestock or residential builds. Identify any wetlands, flood zones, gullies etc negatively impacting build viability.

Existing Structures - Houses, barns or sheds add utilitarian value but may need expensive repairs or demolition expenses factored in if outdated or dilapidated. Consider marketability with existing structures versus clearing for new development.

Zoning Designation - See if the local county has zoned the area residential, commercial, industrial or agricultural. This significantly impacts options of how the inherited land can be utilized whether you sell or build on it in future. Some areas prohibit commercial facilities being constructed in residential zones for example.

Utilities - Having electricity, natural gas, internet access and sewer readily available to a property drastically increases desirability if developing the land for habitation or businesses. Check access to hook up with these key utilities if existing infrastructure is not already established.

Mineral Rights - Understand if lucrative drilling/mining rights are attached to the land or not. This may incentivize extractive industry buyers interested in natural resource plays even for remote parcels. Definitely assess if mineral rights transfer over with surface land rights.

Water Rights - Similarly, verify if water rights conveying to aquifers, streams or ponds are included with the inherited land. This impacts irrigation for farming or well access for drinking water if developing the lot.

Once you’ve thoroughly evaluated the inherited real estate, decide whether to keep or sell the property. Here are the main options to consider:

If Keeping the Inherited Land:

Holding onto land as an asset investment or using it actively requires ongoing costs and liability. Property taxes, insurance, maintenance fees add up annually. You also assume legal responsibility for activities happening on the land during ownership. Consider if long-distance ownership burdens outweigh benefits if living far from the inherited property.

Still, inherited land can give great utility whether as a vacation retreat, leasing to tenant farmers or building a residential estate or commercial development. Evaluate finances to handle ownership duties before committing.

Utilize Vacant Land - If keeping acres of empty fields or forest, explore options like:

• Leasing hunting/recreation access to individual outdoorsmen or access companies, generating steady cash flow from the land asset.
• Contracting reliable land management companies versed in rural properties to monitor while away. They handle issues like trespassing, squatters, debris dumping etc. for safety.
• Working with local farmers to grow crops on fertile land through profit-share agreements, utilizing inherent agricultural utility.
• Using wooded acreage responsibly for lumber milling, mining mineral resources or tree tapping maple syrup operations.
• Seeking investors to construct storage units, RV park, campground or outdoor retreat venue with split profits based on a business plan. Ensure zoning allows intended development.
• Holding as appreciating investment for later sale or builds. Comparable land plots in Arkansas gain ~3-5% annually long-term.

Develop Structures - If the inherited property has strong location advantages near key amenities, building residential or commercial developments after demolishing dilapidated buildings can prove highly profitable despite steep initial construction costs. Work with city planners to assess zoning protocols and confirm what types of new structures are permitted. Order demolition, architect plans, utility connections and necessary permits/surveys first before starting actual private or contracted construction of new structures like:

• Custom residential property to move into long-term utilizing acres inherited
• Ranch houses, tiny homes or modular designs as rental income properties
• Warehouses, distribution hubs or mini-storage given industrial zoning allowances
• Hospitality venue like winery, boutique hotel or event venue with scenic hillside acreage
• Retail plaza, medical office campus or similar commercial build tough to permit in core cities

If Selling the Inherited Land:

Despite romantic notions of keeping the family homestead or woodlands, liquidating land received through inheritance makes practical sense for many. The process demands significant marketing efforts and likely price compromise, but can convert unused land into useful lump-sum capital now. Cash payout eliminates need to handle maintenance, taxes and liability.

Selling also avoids recurring ownership costs if uninterested in directly managing rural land from a distance. Take advantage of today's relatively active land sales markets in Arkansas aided by increasing remote work trends drawing out-of-state transplants.

Attempt Private Sale - List the property on popular real estate sites like Zillow & Realtor.com while also trying niche land listing services like Lands of America hyper-focused on rural acreage sales. Beef up appeal with detailed photos showcasing any compelling features. Be prepared to wait many months, incrementally discount pricing every 6 weeks and market listings widely outside just Arkansas to attract serious cash buyers.

Hire Real Estate Agent - Land specialists know value benchmarking, marketing tactics and potential contacts for inherited properties. Their commissions are often worth this expertise to navigate sales hurdles specific to vacant plots, but vet agents carefully first. Not all realtors excel at the unique aspects of raw land deals despite general credentials. Ask for case studies selling nearby rural tracts successfully.

Negotiate with Local Farmers - Stop by active farms surrounding the inherited parcel to inquire if they want to expand acres. In-person farm visits show sincere interest to deal. Established agricultural names know the area well and have equipment ready to utilize added land quickly, though won’t pay premium prices given thin farmer margins. Offer slight discounts compared to market figures listed through agents if forgoing their added costs.

Cash Land Buyers - If inherited land has lingered unsold despite reasonable pricing and active attempts to market towards various buyer types, contact local or national land buying companies specializing in direct purchases for cash like Land Boss. These specialized buyers purchase land at discounted rates to flip or add to investment portfolios, but simplify sales as hassle-free cash closings without contingencies common with traditional land listings. Selling off-market to a cash investor often makes the most sense to resolve unwanted inherited properties. Be upfront about known defects impacting use or redevelopment potential which could severely diminish bids.

Final Thoughts

Whichever path taken with inherited land in Arkansas, conduct thorough due diligence beforehand. Survey exact property lines, verify legal clear title transferring ownership cleanly, tighten security against trespassing, address any cleanup needs from illegal dumping and confirm tax payments are current. This protects against ownership hassles and maximizes salability.

Seek assistance from attorneys, real estate agents, developers and farming neighbors when evaluating options to leverage localized intelligence. Join county Extension Office workshops to educate on managing vacant land. With thoughtful strategy guided by professionals versed in rural properties, inherited acres can either transform into a valuable income-generating asset or needed liquidation cash to reinvest elsewhere more suitable to personal lifestyle. Consider all possibilities before determining what to do after inheriting property in Arkansas.

Frequently Asked Questions (FAQs)

What taxes do I need to pay if I inherit land in Arkansas?

You will need to pay both state and county property taxes on inherited land in Arkansas. These are typically billed annually. There is no inheritance tax in the state, but inherited property valued over $100,000 may be subject to federal estate taxes.

Do I have to keep paying the mortgage on inherited property?

If there is an outstanding mortgage on land you inherit in Arkansas, you are not personally responsible for paying this debt unless you co-signed on the original mortgage. However, the land can still go into foreclosure if mortgage payments lapse, so you'll want to either take over payments or settle the loan.

Can I sell inherited property if other heirs are involved?

Yes, you can sell an inherited property with multiple beneficiaries on the deed. However, you may need consent and signatures from all heirs to finalize a sale. Consider hiring a real estate attorney to handle the details if dividing proceeds between heirs.

What happens if someone else claims ownership of land I inherited?

If you suddenly face claims contesting your inherited property ownership, don't panic. Gather all documentation proving your inheritance like the filed deed, will, estate records etc. Then hire a real estate litigation lawyer to handle defending your rights through proper legal channels. They can dispute questionable challenges.

Should I keep or sell vacant land I inherited in Arkansas?

If the inherited land doesn't hold sentimental value and/or poses a tax burden, selling is likely the best option. You’ll want to compare proceeds from a sale versus ongoing costs and liabilities of retaining vacant rural land. If selling, list with a specialty agent skilled at marketing rural acreage for top dollar.

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