Owning a ranch or a piece of farmland can be an extremely rewarding experience. Rural living and fresh air can be appealing, but there are pitfalls to avoid. In this guide, potential buyers can learn about the problems they may experience when evaluating Colorado ranches and land for sale, along with some possible solutions.
Some buyers of Colorado horse property overestimate the land’s carrying capacity and, in some cases, a seller may inflate the number of horses a parcel of land can support. Before buying ranch land, the potential buyer should visit the nearest Natural Resources Conservation Service office. This branch of the USDA can provide information on precipitation, soil type, forage conditions, and vegetation, which makes it easier for buyers to predict the productive potential of the property.
Many believe things will simply fall into place but, on a ranch, that’s not the case. Cattle, horses, and other animals require a substantial amount of care, and many people buy Colorado ranches only to see that they spend most of their time managing the land. Other times, a buyer may not consider how long it takes to get to the property or to an outside job. By planning ahead and considering the time needed for ranch maintenance and animal care, buyers can learn how rural living will affect their lives and those of their families.
New buyers often pay too much for animals, buy low-quality stock, or both. In some instances, an inexperienced buyer may purchase genetically inferior animals that produce substandard products. This can be problematic on for-profit ranches. However, with advanced research, the development of a support network, and conversations with experienced livestock buyers, new ranch owners can learn enough to avoid losing money and wasting resources.
Knowing the Right Practices and People
Many land buyers significantly underestimate the sheer difficulty of ranching and farming, and some believe that anyone can do it. However, as many have found, this is far from true. Ranch and farm owners must know about topics such as:
- Fertilization and grazing management
- Management of the genetics, nutrition, and health of livestock
- Business management (taxes and accounting)
Furthermore, a rancher or farmer needs a reliable source of information. Many landowners get advice from the wrong places, and to make matters worse, some offer assistance in hopes of making a sale or taking advantage of a buyer’s inexperience. Potential ranchers should learn about the process before purchasing a Colorado ranch for sale. Cooperative extension meetings are a great place to start, and they can put new landowners in touch with experts who can provide real advice and help.
Some landowners run into issues when they overestimate their annual production’s value. Cattle and other livestock are agricultural commodities, and prices may fluctuate based on the world or national supply and demand. Therefore, gross income can vary significantly. The average weaned calf is worth anywhere from $250-$400. If breeding failure, herd replacement, and mortality are considered, an owner may gross $200-$350 per breeding cow per year. To prevent disappointment and losses, it pays to be conservative when estimating the potential for gross income.
Realizing Tax Savings From Agriculture
People often believe that buying agricultural land and property will bring them significant tax savings. Oftentimes, bad management decisions are made in efforts to cut taxes. Before buying Colorado hunting property and ranches for sale, it’s important to review the plans with an agricultural tax expert.
Buying Things Other Than Livestock and Land
In their excitement, buyers of Colorado ranches and land may buy too much or the wrong kinds of equipment. Some believe it’s necessary to buy a new truck, tractor, trailer, ATV, and more. While buying these things can be exciting, they can also increase production costs and eat into profits. On bigger ranches, an owner may also fail to consider expenses for hired labor. The solution is to carefully consider each purchase and to ensure it’s really necessary for the operation of the ranch. If something is needed, the owner should find out whether it can be borrowed or rented instead of being purchased. Ranch owners have many qualities, but frugality is one of the most desirable.
Estimated Spending Per Year
Owners frequently underestimate the cost of ranch life. While bills are paid at various times throughout the year, sales typically occur much less frequently. If there’s no land debt and the rancher is efficient, the annual cost per breeding cow may be $200 or less. However, it’s more likely that the cost will reach $300 or $400 per year. Avoid significant losses and other pitfalls by planning for the worst, developing a workable budget, and working with knowledgeable financial experts.
Owning ranch land in Colorado can be the realization of a lifelong dream, but it’s not without its share of risks. By following the tips above, planning carefully, and working with the right team of advisors, even a new landowner can be successful.