Buying More Land Next To Our House

When Mrs. C. and I first bought our home there were two factors that I loved about the lot it sat on.  The house sat on a 1 acre lot, but came with the two lots beside it giving more acreage and a buffer from our neighbors,  it also butted up to a heavily wooded area, which meant no neighbors on the backside of the property.  Upon further investigation after purchasing the house we found out that part of the wooded area behind our house was actually an old abandoned railroad bed. In the back of my mind I wanted to find out the owner of it and buy it in the distant future, but figured it would be decades out.

Last January the owner of the property wanted to sell and we acquired the 3,000′ long 4.5 acre portion directly behind our house.  Since then I have see the value in buying the rest of the railbed, but in October of last year the owner and myself could not come to an agreement on price and our communication dropped off. He owns another 2 adjoining chunks which total roughly 4.25 acres and about 2,800′ in length.

Buying More Land Next To Our House

In Early March he got in contact with me and explained that upon inspecting his property he has reduced his ask price from $10,000 to $4,200.  This brought him back down to the realm of reality on the property.  Mrs. C. and I talked it over for a few days and decided to wait until after the outage season to make a move.  I sent an email back to him explaining that we needed to wait until Mid May to make a deal, but that we were still interest and will present a counter offer at that time.  Mrs. C. and I had previously offered $2,000 for the property, but had discussed increasing our max price to $3,000.

In early May I let the seller know that we would be comfortable offering $2,750 for the property.  We closed last week for $2,750, plus $300 in back taxes and I now own over 1 mile of railroad bed! With a total cost of $3,050 the price per acre is only $717.65!

The Vacant Land:

Buying more land next to our house Railroad Property 1 The property is 66′ wide and about 2,800 feet long, covering just over 4 acres. it adjoins the railroad bed piece I already own that runs behind my house and continues south to the main road.  It actually continues past the main road a couple hundred feet where it stops at the boundary of the highway.  The entire area is heavily wooded and a stream runs across it twice.

bridge2At one of the stream crossing there is a concrete culvert bridge, and the other crossing has some remnants of a 40′ metal truss bridge. It appears that at one point in time the bridge was removed in order to scrap the supports.  Only 1 and a half metal supports are left.  I plan on building a small foot bridge across at a lower level in the future.  Over the years vegetation has overtaken the railbed and I have a lot of work to do to clear a path, including cutting up several downed trees with my chainsaw.  I recently purchased a self sharpening bar and chain combo for my saw, which so far is working great to keep up with the fallen trees.  I hope to have a decent walkable path cleared all the way through by the end of June.


The primary use for this property is to clear the overgrowth in the center and use it as a nature trail.  It runs about 3/4 of the way to the local park and will provide a fun and shaded walk to the park.  At some point in time I would like to harvest maple syrup, and the addition of 4 more wooded acres would certainly help increase my max capacity.  This acquisition brings our total acreage to 11.75.  3 Acres for our home and the two lots beside it, 4.5 acres for the first railroad property, and 4.25 acres for this railroad property.  It’s a lot of fun to go on nature hikes with the kids and while walking down the trail we occasionally find railroad spikes and tie plates left behind.

Although it is a long shot and wouldn’t happen for at least another 5 years, there is the possibility that I could install a billboard next to the highway.  Highway billboards in this area can command $1,000 per month, of course there is a long costly process just to be able to put one up, and I would have to supply power for lighting for it and build one, which is not cheap. I found out that some of the billboard companies simply lease the land from you and handle everything from permits to sign installation and maintenance themselves. The lease is usually for a percentage of the revenue of the sign.  This may be the route to go down if its doable.

Reducing Taxes:

The first step is to file a personal residence exemption, or PRE for the property.  Any land zoned residential that is adjacent or congruent to your primary residence qualifies for an exemption on taxes in Michigan.  Effectively this cuts out taxes on the property by around 40%.  Because these two chunks are congruent to my primary residence they qualify for a PRE. This is a black and white deal, so there is no question that these lots qualify, which is why I am going after the PRE first. I sent this out to our township assessor the day we closed on the property.

The second step is to challenge the assessment. I successfully challenged the assessment on the section I bought last year, and reduced my property assessment from a value of $15,200 to a value of $3,800.  Currently these two chunks are assessed at a value of $14,200.  I should be able to appeal this valuation and get it reduced closer to the $2,750 I paid for it. The board of review only meets for 2 days in March, so rather than waiting a full year I am writing a letter to our assessor to see if he can do something to help us out now.  If not, I will file the offical appeal in March of 2017.

Overall I should be able to get the taxes combined on these two land segments to under $40 a year.  Combined with the chunk I bought last year I will be paying under $90 per year for property taxes on my railroad bed.


Driveway2As part of the deal to acquire this property I needed to give Mrs. C. a home improvement she wanted as well.  Mrs. C. had negotiated to have the end of our driveway paved when I bought the first chunk of land.  Due to timing and other constraints, this did not happen last year, but we did get it done at the end of April and now have a nice end of our driveway.  This allows us to play baskeball with the basketball pole we installed last year, it greatly improves the drainage of our driveway, and we added an extra parking spot.  We had about 1000 square feet paved for $2,150.

Other Land Prospects:

Overall I want to own as much wooded land adjacent to my principal residence as possible.  Now that I have purchased the entire railroad track,  I have my sights on a 14 acre chunk of forest that sits behind the railroad bed.  This forest has been owned by the same family for over 60 years.  I have seen the owner out there maybe one or two times a year during hunting season.  Perhaps in the future I can strike a deal to purchase the property, but give him a right to hunt for a select period of time during deer season.  I would own the entire woods, and he would get to continue using the property as he does now, but with some extra cash in his pocket.

I can’t see making a move to purchase another chunk of property until after our house is paid off AND we have updated Mrs. C.’s vehicle AND we have redone the upstairs bathroom and kitchen in our house.  This should put further land acquisitions at least 5 years out.  If/When we acquire this property it would bring our total acreage to 25 acres.


Have you ever bought land adjoining your house, or wanted to buy land adjoining your house?  

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John is the author of the book For My Children's Children: A Practical Guide For Building Generational Wealth.

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