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Cautions to Watch Out for When Buying Rural Real Estate – The PropTech VC with Kehan Zhou and Zain Jaffer

In this episode of “The PropTech VC Podcast,” guest Kehan Zhou speaks with host Zain Jaffer. They discuss the major challenges of buying and selling rural property: location, distance, and information. They talk about how most sellers are hooked by the deals in front of them and jump on the purchase without considering these major challenges. They also emphasize how rural properties can still be a great investment when certain tips for finding rural properties are followed.

In This Episode, You Will Learn: 

• Common motivations and mistakes made by buyers looking for rural properties
• The variables and information to take into account when buying a rural property
• How to overcome the information disadvantage when buying a rural property
• The upsides to buying a rural property when you’ve done your homework
• The benefits of using a real estate agent like Terrascope.io for rural properties

Good Question & Answer 1:

Zain Jaffer: Are you saying that there are flippers coming into the rural market trying to get rich quick by trading land and causing unnecessary inflation in prices? The core value that land provides is not in being bought, it’s just the greater fool theory. And while this is happening in all asset classes like Bitcoins, NFTs, stocks, real estate, you name it, you’re saying that it’s also happening inland specifically?

Kehan Zhou: Yeah, for example, Northern Ontario. It’s extremely cold and the land is not good for vegetation. So, if you see someone selling there it’s usually because they’re trying to flip it. In regions that are more frontier than residential, the land is cheap, easy to buy, and people are looking to sell it to someone that doesn’t know what they’re doing. The first thing you want to consider when buying land that can appreciate is location. Location is very, very important, especially when it comes to rural properties. Buy something that’s close to basic infrastructure. For me, I want to buy a farm because they’re proven to be fertile and have the necessary infrastructure to sustain vegetation. The neighborhood is also set up in a way that lets people cultivate. Even if it seems like a good deal, you don’t want to buy a barren plot of land out of nowhere for $100,000, especially if it’s your first time buying.

Good Question & Answer 2:

Zain Jaffer: So, how does one go in with their guard up here? Should they need a buyer’s agent? Is there any way that people can avoid mistakes? Because you know, we’re chasing a dream and we’re emotional. You don’t think about all these variables, especially if it’s your first time doing it — you just see the price tag for acres and acres of land and think, “I can build a 5,000 square foot dream home.”

Kevin Zhou: The first thing is that people just need to be more rational. Information is very important because you’ll be starting at a disadvantage. You just see “$300,000 for a large farm.” To overcome this disadvantage, you need to have a framework of things you should think about. Like the local regulation, or where the powerlines are, or are there easements that go across the property; even localized climate change impacts e.g. California is drier, for Florida, you’re going to need to think about water. You need to have a more cinematic way of looking at these issues. You can check with the previous owner, the land registry, and other authoritative data sources. All the information is out there, but the important thing is to slow down and not be carried away by the price tag. That’s the benefit of having a specific search agent like Terrascope.io for rural properties because the information has to be handled differently from urban. Rural buyers, on average, have to consider three times more variables than urban buyers.

Additional Topics Discussed:

• How buying land can be an emotional decision
• The responsibility of the buyer in finding and verifying information
• The difficulties of litigation when buying the wrong land

Host/Podcast Bio: 

Zain Jaffer is an accomplished executive, investor, and entrepreneur. He started his first company at just 14 years old. Eventually, He moved to the United States as an immigrant, where he founded Vungle in 2011 after securing $25M from tech giants (including Google & AOL). Vungle recently sold for $780m. His impressive achievements have garnered international recognition and acclaim. He is the recipient of prestigious awards such as “Forbes 30 Under 30,” “Inc. Magazine’s 35 Under 35,” and the “SF Business Times Tech & Innovation Award.” He is regularly featured in major business and tech publications such as The Wall Street Journal, VentureBeat, and TechCrunch.

Guest Bio:

Kehan Zhou is the co-founder of Terrascope. Terrascope is the first AI real estate agent for finding and browsing rural properties online. Terrascope uses a cutting-edge machine learning algorithm and intelligent design to provide a brand-new online property search experience by reimagining the rural real estate search process. Its search algorithm learns each user’s unique preferences to recommend the best listings like an expert real estate agent.

Resources and Links Mentioned in the Show:

• https://terrascope.io/ 
• https://www.tiktok.com/@terrascope.io