Is a Rural Retirement Right for You?

Why some retirees skip the golf course and buy land in the country.

By + More

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.)