What Should Investors Know About Owning Property Near Federal Land or National Parks?

Properties located near federal lands or national parks offer unique opportunities and challenges for investors. From breathtaking views and high tourism potential to various zoning and environmental restrictions, these properties attract investors interested in natural beauty, rental income, and long-term appreciation. However, owning property near federally protected areas also involves unique responsibilities and legal considerations.

This guide explores what investors need to know before purchasing property near federal lands or national parks, covering such investments’ benefits and potential restrictions.

Benefits of Owning Property Near Federal Land or National Parks

Investing in properties close to federal lands or national parks can bring several advantages in terms of financial returns and lifestyle perks. Here’s what makes these properties attractive to investors.

High Tourism and Short-Term Rental Potential

One of the most appealing aspects of owning property near a national park is the potential for rental income. National parks and federal lands attract millions of visitors annually, creating a high demand for nearby accommodations. Properties near these locations can serve as short-term rentals for tourists, campers, hikers, and nature enthusiasts.

• Increased Occupancy Rates: Properties near popular parks, such as Yellowstone or the Grand Canyon, can command high occupancy rates, especially during peak tourism seasons.
• Higher Rental Income: Proximity to natural attractions allows investors to charge premium rates for short-term stays, providing a steady income stream.

Investor Insight: If short-term rentals are part of your strategy, check local regulations on vacation rentals. Some areas near federal lands have restrictions or permit requirements for Airbnb and other short-term rental platforms.

Scenic Beauty and Quality of Life

Owning property near national parks provides residents and renters access to stunning natural landscapes, wildlife, and outdoor recreation. For buyers who prioritize lifestyle factors alongside financial returns, these locations offer peace, beauty, and direct access to trails, rivers, forests, and open spaces.

• Enhanced Property Appeal: The natural scenery and tranquil environment attract tourists, long-term renters, and retirees seeking a lifestyle close to nature.
• Health and Wellness Appeal: Proximity to nature is often associated with health benefits, including mental well-being, making these properties more attractive to wellness-oriented buyers and renters.

Investor Insight: Scenic properties often have higher resale value due to the natural appeal and low supply, as land near national parks is limited and protected.

Long-Term Appreciation Potential

Property near national parks tends to appreciate over time due to limited supply and high demand. Since federal land cannot be developed, properties near these areas often become more desirable as the surrounding land remains protected and undeveloped.

• Supply Constraint: The inability to develop on or near federal land creates a scarcity effect, which can drive up property values over time.
• Investment Security: Federal protection ensures the natural environment remains undisturbed, preserving the scenic and recreational appeal for future buyers.

Investor Insight: Consider the historical appreciation rate of properties in the area to understand the potential for long-term growth and how it fits into your investment strategy.

Key Considerations and Restrictions for Investors

While the benefits of investing near federal lands are significant, investors must be aware of unique restrictions and responsibilities tied to owning property in these locations. Here are some key considerations to keep in mind.

Zoning and Land Use Restrictions

Many properties near national parks and federal lands are subject to strict zoning laws and land use restrictions to protect the surrounding environment. These rules can limit development, renovations, and even the permissible uses for the property.

• Zoning Limitations: Properties close to national parks may fall under specific zoning categories that restrict commercial use, property expansion, or construction of additional buildings.
• Permitted Uses: Zoning laws may limit the number of structures, types of businesses, or rental activities allowed on the property, impacting its rental potential.

Investor Insight: Review local zoning regulations before purchasing and consult with a real estate lawyer or local zoning official to understand what you can and cannot do with the property.

Environmental and Conservation Regulations

Properties near federal lands are often governed by environmental and conservation regulations designed to protect natural habitats, wildlife, and ecosystems. This can affect how investors maintain or alter the land.

• Environmental Impact Studies: Some areas may require an environmental impact study (EIS) before making significant changes to the property, especially if it could affect nearby ecosystems or wildlife habitats.
• Wildlife and Plant Protection: In certain regions, laws protect specific plants or animals, which can impact landscaping, land use, or expansion efforts on your property.

Investor Insight: If you plan to make modifications, check for any required permits or environmental assessments. Working with conservation groups can also help you understand best practices for land stewardship.

Access and Infrastructure Limitations

While federal lands provide stunning scenery, they may have limited access and infrastructure. Properties near remote or wilderness areas often have restricted road access, limited utility services, and slower emergency response times.

• Road Access: Some properties may be accessible only by gravel or seasonal roads, which could impact property values and restrict accessibility during certain times of the year.
• Utilities and Services: Properties in these areas may need easier access to municipal utilities like water, electricity, or sewer services, requiring alternative solutions like wells or septic systems.

Investor Insight: Consider how access and utility limitations might impact property value, upkeep costs, and suitability for certain types of rental or personal use.

Financial and Investment Insights for Property Near Federal Land

Beyond zoning and environmental considerations, owning property near federal land has financial implications that investors should understand.

Higher Insurance Costs

Property near wilderness areas or federal lands may face unique risks, such as wildfires, flooding, or earthquakes. Due to these risks, insurance premiums for properties near national parks can be higher than in other locations.

• Wildfire Insurance: Properties in forested areas may require wildfire insurance, which can be expensive in high-risk regions.
• Liability Insurance for Rentals: If the property is rented out, liability insurance may also be necessary to cover potential injuries or damages involving renters and guests.

Investor Insight: Research the specific risks associated with the location and factor in insurance costs when estimating potential income and expenses.

Maintenance and Conservation Costs

Owning a property near protected lands may involve additional maintenance to preserve its natural surroundings. Conservation efforts, landscaping, and ensuring wildlife safety may require ongoing investment.

• Landscape Management: Natural landscapes near national parks may have restrictions on fencing, pest control, and landscaping methods to maintain natural habitat and support native species.
• Erosion Control and Land Stability: In some areas, maintaining land stability through erosion control measures, especially near rivers or mountainous terrain, can be necessary.

Investor Insight: Allocate a portion of your budget for upkeep and potential conservation efforts that local regulations or associations may require.

Tax Benefits and Potential Deductions

Some properties near federal lands or national parks may qualify for tax incentives or deductions, especially if they participate in conservation easements or other environmental protection programs. A conservation easement restricts development to protect the land’s ecological or scenic value, and in return, property owners may receive tax deductions.

• Conservation Easements: Properties that preserve their land under conservation easements may qualify for federal income tax deductions.
• Local Tax Incentives: Some states and municipalities offer additional tax incentives for properties dedicated to conservation or preservation efforts.

Investor Insight: Speak with a tax professional to explore potential tax benefits for properties that align with conservation efforts or participate in state or federal preservation programs.

Conclusion: Weighing the Pros and Cons of Investing Near Federal Lands

Investing in property near federal lands or national parks offers a unique blend of benefits and challenges. These properties are often in high demand due to their scenic appeal and access to nature, making them attractive for short-term rentals and long-term appreciation. However, investors should be mindful of the zoning, environmental, and access restrictions affecting usage and profitability.

For those willing to navigate the regulations and embrace the natural landscape, properties near federal lands can provide financial rewards and the satisfaction of preserving and enjoying some of the nation’s most treasured natural resources. Whether for personal enjoyment, rental income, or long-term investment, understanding the unique aspects of owning property near federal land will allow investors to make well-informed decisions that align with their financial goals and values.