10 Things to Know Before You Buy Your Ranch

What are the Most Important 10 Things to Know Before You Buy Your Ranch?

Are you one of those people who “always dreamed” of owning a ranch? When the rough and tumble of life gets you down do you stop and daydream about your beautiful green land with a stream flowing gently through it? Maybe you are an investor looking for a nice place to park some of your money?

Owning and managing a ranch has become an increasingly popular and steady alternative investment class. According to Paul Sullivan with the New York Times (nytimes.com), average returns for ranch lands have been holding at about 3 percent per year, and that doesn’t include income that may come from the products and/or livestock raised on the ranch, or other business that may be conducted on the ranch such as lodging and guest services. Some ranch lands have been appreciating at a much higher rate, and have been sold for literally millions of dollars when they were bought just a few years ago for under a hundred thousand.

Whatever your purpose is for buying a ranch, there are some common pitfalls that you must be sure to avoid before purchasing your ranch.

Remember that sellers are generally going to highlight the positives aspects of the property, so you will need to know what questions to ask. Here is a list of items to consider and ask about before purchasing a property (the list comes from noble.org – the Samuel Roberts Noble Foundation has been helping ranchers and farmers since 1945):

  1. Access to property (such as crossing another person’s property, quality of roads).
  2. Wetlands or archeological sites.
  3. Zoning and other land use restrictions (pesticide use, burning, etc.).
  4. Existing easements.
  5. Flood potential and drainage.
  6. Old dumpsites on or around property that may contain hazardous waste.
  7. Groundwater contamination.
  8. Population growth potential.
  9. Uncontrolled hunting and fishing.
  10. Low pH, high salt content, or low organic matter in soils.

If your heart is really in it, and you do your homework, a ranch can be a fantastic investment, and it truly can be a dream come true.