Often times a lender's biggest competition is cash. Buyers often face the decision on whether to pay cash for a property and deplete some of their cash reserves / liquid accounts, or to leverage low interest rates and hang on to their cash. Below are the advantages and disadvantages of borrowing money to purchase farms and ranches:

Advantages: 

Low rates- Take advantage of historical all time low rates

Ability to keep your investment: Wealth managers are often times able to earn their clients money to help offset their interest expense of financing land.  Land buyers can take advantage of Texas Farm Credit's long term fixed rates and will notice higher earnings as market rates increase.

Cash is king- Everyone knows once your cash is gone it can be difficult to replenish. Homestead laws can make it a challenge to pull equity out of land at a future date.

Cash dividends- Texas Farm Credit has paid back significant patronage distributions in previous years. The association issued patronage back in 2014 which lowered the customer's effective rate, on average, by 1.90%

Experienced lending staff- Texas Farm Credit's staff is well experienced and trained in farm and ranch financing transactions with a wealth of knowledge and value to pass on to customers.

Disadvantages:

Potentially slower process- An appraisal is often times overlooked by cash buyers. Appraisal benefits include: justifying purchase price, setting a cost basis for future tax implications, and providing better awareness of the property being purchased.

Closing fees on front side- Fees account for the expertise of a lender to guide in the process to ensure a successful and smooth transaction. Although setbacks may occur whether purchase is cash or financed, an experienced lender is another set of eyes looking out for his or her clients best interests in what could be considered a significant purchase.

Volatility of increasing rates- The longer the fixed term, the less risk involved. Subsequently, the higher the rate the more expensive it is. Texas Farm Credit can offer short and long term rates. If rates climb up, clients can pay off their note, or utilize Texas Farm Credit's Rate Conversion to fix in a long term rate.

Working Capital- Depleting working capital could potentially cause problems in times of adversity, or if other purchase opportunities become available at a later date.

Buyers should consider weighing their options before making a decision. A joint meeting with a lender and wealth advisor could potentially save you money and headache in the long run.