Things To Know About Owning a Ranch

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For many, the possibility of owning a ranch is simply a dream. But, for some, it can become a reality, if you are willing to do your homework ahead of time, and work hard once you purchase. Life on the ranch is a great place to raise a family, and owning ranch land is something that can be passed down to future generations. But, there are a lot of considerations to take in before you just go out and buy land on a whim! Examine why you want a ranch and what you expect out of it.

Time

Ranching is a full time job. Even if you choose not to keep livestock, there’s a lot of time invested just caring for the property, whether you want to farm field crops, have fruit or nut orchards, or log timber.

Furthermore, if you buy a ranch, but aren’t going to live there, consider time spent commuting. You might enjoy the drive at the onset, but it may become burdensome when you “have” to go out to the ranch.

Livestock

If you want to maintain some livestock, consider what type of animals. If you don’t have livestock experience, read up on their requirements. Consider the type and quality of the stock you may want to own, and where you may be able to purchase good, healthy animals. To learn more about livestock, check with the local farm bureau or university extension offices for some guidance.

You will also need to know how many animals can be kept on land you are looking to buy. Some areas have restrictions on numbers by acre. You also need to know about the potential grazing land and how many animals it can handle.

Taxes

Potential taxes or tax savings should also be checked out before you buy. What are the property taxes in the area? Are there advantages to buying ranch land and working it? Having your ranch classified as a hobby farm, residence, or working ranch all have different implications for what your tax liability can be.

If at all possible, do not make decisions based on tax savings however, it may backfire. Take the time to meet with a local account or tax management service before you buy land, to discuss all potential tax advantages or disadvantages. The IRS also has guide specifically for farmers and ranchers.

Networking

Networking is very important in most any situation. Joining the local farm bureau and attend any informational meetings or events to meet other ranchers, farmers, bankers, investment counselors, genetic experts, nutritionists, and more. Those connections will prove invaluable when you have questions arise, and those questions will come.

Income

One misnomer is that ranchers and farmers earn a lot of money. Some may, but they are not new to their work. They have spent years working their ranches, learning and ins and outs of what they do.

Before buying land, meet with an accountant or financial planner who specializes in ranching services. Discuss with him, or her, what you need to know about buying land in the area. Talk about the type of land you are considering, the location, and what you want to do with it.

Additional expenses

When working a ranch you will need a good truck, tractor, implements, a trailer for livestock or harvesting equipment for crops, and general supplies need on a routine basis. For livestock, there are supplemental feeds, routine veterinary bills, and nutritional supplements. For crops, there are fertilizers, weed, insect, and rodent control measures, watering equipment, and soil supplements.

On the ranch, there are always unexpected expenditures. Equipment breaks down, animals get sick or injured requiring emergency calls to the veterinarian, and unfortunately, herd losses can be expected and costly. Make sure you maintain a rainy day fund.

Other things to consider

Before you buy land, make sure everyone involved is in agreement of a location. You are going to spend a lot of time on your ranch, whether you live there or not. If you plan to live there, think about accessibility to town for trips to the market, the bank, medical offices, and other routine needs.

Consider the condition of the roads leading to the property and whether you may require the use of neighboring easements to access it. Also, find out whether the property you are looking into has any of its own easements and what that may entail.

Lastly, but importantly, think about water rights which you may use to irrigate the land or water animals. Does the property have a well or wells, or will you need to drill one and if so, learn about the groundwater table in the area. Furthermore, consider the accessibility of electricity to and on the property, as well as internet and television. Think about cost-saving measures, such as installing solar power for a reduction in energy bills.

Before investing it is essential for the buyer to know what they are getting into when buying land. Owning a ranch can be a rewarding lifestyle choice, but you need to understand the pros and cons going in and before you invest in the land of your dreams.

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