Real Estate Industry

6 Key Things to Know Before You Buy a Ranch

Beautiful ranch in front of mountains

Owning land has been a corner of the American Dream as long as America existed. To have some space in nature that you can call your own, that you can raise your family in– there’s no greater pleasure in society. 

Or maybe you’re an investor looking for a solid place to invest your hard earned cash. Or maybe you’re looking to start down a new career path, and harvest the land to make your living. Whatever you’re reasons, you’re eager to get going on buying your ranch. 

But hold on, partner. Before you leap into ranch ownership, there are a number of things that you should know. Read on, and we’ll walk you through six things you should be aware of before you buy a ranch. 

Relaxing in a hammock

1. It’s Not All Relaxation

One of the biggest benefits of ranch ownership is enjoying the land. If you’re buying a ranch, we can assume you’re looking forward to enjoying the sunrises, sunsets, and the rolling streams and pastures. 

But if you think you’ll be able to sit back and relax without any work, you’re about to have another thing coming. Grazing and running livestock is an essential part of ranch ownership, whether you want to or not. If you come at ranch ownership as purely recreational, you’re sure to be disappointed. 

Not only are such tasks essential for land upkeep, but they will decide whether or not you get to keep your agricultural tax status. Without such work, you can lose money and grazing rights on nearby public land. 

Stream

2. Water Rights Are Complicated

Understanding the water that runs through your land might require more work than you think. This is especially true if you’re an angler or are looking to catch fish as part of your livelihood. 

Buyers should understand their water rights, but also take time to understand the historic flows and patterns of their portion of a stream or river. There also different laws concerning public access that vary greatly from state to state. If you’re planning to own a ranch, you probably don’t want stranger passing through. But if you don’t check your local water laws, you might find yourself getting just that. 

Possible flood

3. Flood Potential and Drainage

Speaking of water, local laws aren’t the only thing you’ll be wanting to look into. It’s essential to look at the risk that an overflow of water might have to your land. If a heavy rain comes through for a few days, will you be essentially underwater? 

That’s not something you want to wait to find out until it happens. Studying drainage breakdowns of your potential ranch and understanding the potential for flooding can cause you a serious headache down the road.

In some cases, it might just mean you need to have a plan of action when it comes to heavy rain. But in others, such lack of drainage may even be a dealbreaker when it comes to acquiring land. It all depends on the severity of the situation. 

Population growth and city expansion

4. Expected Population Growth

You may go visit your potential ranch and fall in love with the beautiful isolation. But just because something is as it today doesn’t mean that it will be that way tomorrow. It’s important that you look at the rate of population growth in the area around your ranch. 

If things are expanding rapidly, within five to ten years the land around your ranch might be unrecognizable. As cities grow and expand, new encroaching properties are built, and stores pop up closer and closer. You might even find land developers coming after your land later on. 

All this can be fine if you can make peace with it, but it might not be the picture perfect image you had in mind when signing. If you’re looking to get a ranch, it’s important to check the population growth rate ahead of time for these reasons. 

Ranch hand and horse

5. Strongly Consider Getting Ranch Hands

There are some ranch-buyers who think they’ll be able to handle the work of owning. ranch all on their own. While this isn’t impossible, it’s more than a full-time job and can be quite exhausting. 

More than likely, you’ll want to get a few ranch hands to help out and take care of the land and livestock for you. If your hesitation is the price of employment, don’t worry. A well-run ranch can produce enough income to cover any and all such costs. 

If you hire ranch hands to manage your land, there is a typical management fee. It is 50 basis points of market value plus 7 percent of income.

Old wind turbine on ranch land

6. The Market is Testy

If your only reason for getting into ranch ownership is the potential profit, you may want to look elsewhere for your investment. The market for ranches is unsteady and fairly inefficient. In many years overall, owning a ranch has the potential to leave you in the red. 

How to avoid this? Many ranch hands suggest starting small. Don’t immediately jump in and build your dream house on the land. Work your way up to profitability before jumping in on any lavish proposals. Do your research and learn more about ranch ownership, and make sure such a move is the right one for you.

Ranch Gate

What To Know Before You Buy A Ranch

Ranches can be wonderful and beautiful. But they can also be complicated, expensive, and require a wealth of knowledge to run properly. The above points are just some of the most essential things to look into before committing to buy a ranch. 

Have more questions about ranch ownership? Try asking in our community forum.

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