Monthly Archives: March 2018
Land is a valuable commodity, and many owners often purchase land for investment purposes. Others have been in the ranching trade for generations and are just looking to change things up during their retirement. Whatever the reason, there are several steps you need to follow when getting your ranch or land ready to sell.
It Is Never Too Early to Start
When you decide to put your land up for sale, it is vital that you prepare long before any prospective buyers show up. It even makes sense to prepare long before you meet with a broker, so they can get straight to work when they come to value the property.
There are many things to do to make your property presentable, and your broker will want to take photos and videos of the property at its pristine best. Without these, you are going to have problems selling your property.
Make Sure the Maintenance Is Done
Nothing is more likely to put off potential investors than seeing a property in a sorry state of repair, as they will not want the additional cost of fixing things. Yes, some investors do like the challenge of developing a ranch from the ground up, but this is a niche market, and you shouldn’t expect a long line of people waiting for the opportunity to buy.
Therefore, you should make sure all fences and buildings are in excellent condition and that any trash or obsolete equipment is removed before viewings. Also, make sure that the access roads are clear and not overgrown. This helps to build up anticipation in buyers and makes a favorable first impression. If buyers feel like they are driving into the jungle, then they may very well turn back around before even getting to the door.
Have Your Records Organized and Ready to Show
Regardless of what operations you do on your ranch, it is important to prepare your financial documents before a visit from the broker. For example, if you have cattle or grow crops, you need to show the inventories and production records. These will help the broker make an accurate valuation and enable the potential buyers to have a clear idea about the potential of the ranch.
Another area that you need to have accurate records on is any conservation easements, zoning rulings on areas of your property, and any mineral or water rights that your property has. All of these factors can have a significant impact on the valuation and attraction of potential buyers.
Hire a Broker
Selling a ranch is a complicated process, so hiring a broker can make the process much smoother for you and the buyer. The broker will be able to help you market the property and find the right kind of buyers without you having to do any of the heavy lifting. Also, they will be able to advise you on how to best proceed with the sale from a legal and financial standpoint.
Once you have authorized a broker to act on your behalf, it is crucial that you are available to welcome potential buyers when they visit the ranch, as they will want to get an accurate lay of the land. They will most likely have a lot of questions, so be prepared to be a gracious host when they come to look around.
Moving to the great American West has been a dream for many souls for as long as this country has existed, and today the urge remains just as strong as it did in the pioneering days. But before you up and move to the country, there are many things to consider.
Buying a ranch is a complicated process which takes a lot of time from the initial idea to the completion of the sale. Therefore, it is crucial that you have someone on board that is well versed in the complexities of the process, as they will know how to buy a ranch that best meets your dreams and expectations.
What Do You Want?
Before you start looking for properties, it is vital that you think about what you want from your ranch and the lifestyle you are planning to lead. You should start by drawing up a shortlist of your requirements, as this will help you to narrow down the available options when you start looking for a ranch. Think about the location and ranch attributes, as well as specific features and functions you would like.
Make sure you create some clear objectives by asking yourself questions such as: Do you want a working cattle ranch or a great escape? Will you be on the ranch full or part-time? What recreational activities do you want to enjoy? Do you want to escape from it all or be close to civilization? Do you want a turnkey operation or a site which has no fixed operation?
Meet a Broker
Once you have a clear idea, you can start your initial search. Meeting with an experienced and reputable broker is an excellent place to start, as they will be able to help you refine your objectives and then start the search.
Using a broker has many advantages, as they will have built up many longstanding relationships with members of the ranching community and will have extensive knowledge of many different types of ranching operations.
When you meet the broker, they will assist you with your search criteria and get a clear picture of your budget and your goals. This is important, as it will save time later and will ensure that they present properties to you that closest meet your goals.
Finding That Dream Ranch
The search for your dream ranch is not a five-minute job, and alarm bells should ring if you meet a broker who says it is. This is because there is extensive due diligence to be carried out before going ahead with a purchase.
When you hire a broker, they will carry out a thorough evaluation of the available properties in a way that you would find difficult to do by yourself. There are many factors to consider such as:
- Legal and tax issues
- Conservation easements
- Mineral and water rights
- Federal regulations
- Access to the land (public or private)
- Ranch management
As you see, there is a lot to cover, and all of these factors can have a significant impact on the valuation of the land and whether it represents a sound investment or not.
Have a Look Around
After the due diligence has been completed, your broker will come back to you with a list of the best options. At this point, you should allow time in your schedule to spend looking at the properties. Again, a cursory look will be insufficient, and you should arrange to spend time in the local area and get a good feel for life where the ranch is located.
When you meet the owner, you should have a list of questions about the property and get the opportunity to have a look behind the scenes. Try to picture yourself living on the ranch and whether it is the right move for you. It is easy for the heart to take over when you are faced with a fantastic view from a veranda, but you need to analyze the pros and cons of each property.
Ready to Buy
Once you have found the right property, you can authorize your broker to go ahead with the negotiation of sale. At this stage, they will discuss the options for the transfer of the deeds and go through any legal obligations you may have to meet before the purchase.
They will also discuss whether you will need any ranch management during the transition or on a more long-term basis. How long this whole process will take depends on many factors, so it is essential to remain patient, because the time spent on the groundwork will help you find your right slice of the American West.
Buying a ranch is a serious investment, so it is important to do your homework before signing on the dotted line. Start by drawing up a list of what you want in a ranch and what sort of lifestyle you plan to lead. Ask yourself if it is a full-time pursuit or a recreational escape? And do you have the time, knowledge, and skills to make it a reality?
Once you have looked at these factors, then you can start searching for properties, but before you do, please bear in mind that there are many things to know before buying a ranch, so take the time to carefully vet the properties. To get you started, we have written down four areas which need your full consideration.
Living out in the great outdoors is a dream for many people, but the reality is that cultivation of that dream takes handwork on an almost daily basis. There are so many moving parts, and you should always be prepared for the unexpected. The good news is that at the end of a hard day’s work, you will be able to sit back and enjoy the view.
For some people, working in the open changes the whole meaning of work, and it soon becomes a way of life, but for some folks, there is a real possibility that you may be overwhelmed by the number of things to do. One solution is to take on staff or hire a ranch manager, but this may be unnecessary if you come into this new venture with a full awareness of what it will take to make it a successful venture.
We advise you to discuss life on a ranch with existing ranchers and people in the areas you are looking at. They can be an excellent source of information on the local area – its unique attributes, the pros and cons of the land, local flora and fauna, government rules, and a whole plethora of things that are worth knowing before investing.
The Lay of the Land
Once you have a good idea of what sort of thing you are looking for, it is worth spending some time on the ranch lands of the local area. This will enable you to get a real feel for life in your chosen part of the country and the unique opportunities and challenges that you are likely to face.
Spending time on the ranch and questioning sellers will enable you to learn all about the harvests, quality of the local water, the local wildlife, and what cattle can thrive in the area. The last thing you want to do is buy a ranch and then find out it isn’t suitable for your desired goals.
State and Federal Rules, Taxes, and Conservation Policies
Whatever your goals, you will need to learn all about the various laws, rules, and projects that are running in the area. This can significantly impact your operations, so you will need to have a good understanding before diving into a purchase. Ranch management companies can be indispensable in this area because they will have a clear idea of local zoning laws, hunting licenses, conservation easements, etc.
For example, allowing part of the property to remain undeveloped to cultivate local ecosystems can result in certain tax breaks or credits. This can have an impact on the value of the land and its future selling price.
Mineral and Water Rights
Another tricky area of land ownership is mineral and water rights, which is a potential minefield for people unfamiliar with the intricacies of the law. When looking at properties, you need to ask what rights the property has and how long they are valid for. If the property comes with significant water rights, then you will have the opportunity to manage the water on the property as you see fit, ideal if you are planning on developing new irrigation channels or setting up fisheries on the property.
Also, mineral rights mean you own the land above and below the surface. This may be an excellent source of income in the future if deposits are found, as you would control access to these resources. However, if someone else owns the rights, then this can lead to disputes over access to the land.
If you have always dreamed of buying a working ranch or a retreat from the city, then you probably have an idea of what life may be like. Unfortunately, many prospective owners often underestimate the sheer volume of work which comes with owning a ranch, no matter the size. This can soon become an expensive headache for owners who don’t want to move out to the country full-time or hold off-ranch jobs.
Regardless of the size of the ranch, hiring a knowledgeable ranch manager is often a sound strategy to ensure the successful day-to-day operation of the land. In this article, we will look at the benefits of hiring a ranch manager.
Why Hire a Ranch Manager?
Landowners decide to hire a ranch manager for many different reasons. For example, some owners want to scale up their operations, while others don’t have enough time to manage the ranch operations successfully. Whatever your reasons for considering hiring a ranch manager, there are some key factors to think about:
What are your objectives, and can you realistically do them yourself?
How much time can you realistically spend on the ranch?
What is your knowledge of the ranching industry?
Do you have the necessary skills?
While you are considering these different questions, it is worth thinking about what a ranch manager can bring to your ranch.
There is a reason that ranch managers command five and six-figure salaries and that is that they come to you with a wealth of experience. After going through a rigorous hiring process, you will have learned about their extensive knowledge of ranch management, and they will have a clear idea of how to best meet your objectives.
If you are new to ranching, then having a team around with the right skill set and experience will prove invaluable and worth the initial expense. However, it is vital that you find the right fit for your ranch, so take the time to get local recommendations and speak with ranch management companies and brokers to see if they know anyone that might work out.
A Link to the Local Community
This is important if you are new to the area, as a ranch manager will most likely be the face of the ranch and the one that builds working relationships with the local community. In ranching, this connection can provide help and assistance during times of need, as many farms cooperate with one another.
An experienced ranch manager will understand the importance of building relationships and will set about doing so straightaway regardless of whether they are local to the area or not.
Taking Care of Everything
If you have off-site responsibilities or just don’t plan to spend a lot of time on the ranch, then the ranch manager will be able to manage every aspect of the day to day operation, from budget control to maintenance, and staff supervision to managing crops and cattle. Of course, as the landowner, you would have the final say on significant expenses, but by building a good working relationship with your ranch manager, you will have the peace of mind that your investment is in good hands.
Knowing the Small Print
Running a ranch involves knowing lots of details regarding legal and financial obligations. Having a ranch manager in place with sound local knowledge will help you meet these obligations and avoid any unnecessary problems occurring further down the line.
No Substitute for the Real Thing
Unlike many jobs, it is almost impossible to fake being a good ranch manager, as the role is so hands-on. During the interview process, you should invite the prospective candidates to the ranch to show you what they can do. At this stage, it would become apparent quickly if there were any imposters about. Therefore, when you have met the right candidate, you can be sure that you are hiring someone who has a proven track record and knows the ins and outs of a ranch operation.
Running a ranch is hard work, but the rewards are well worth the effort. Not all ranches and farms are created equal, with each one having its own unique selling points as well as its problems. But if you have decided that you want to run a successful and profitable ranch, then it is helpful to focus on the things that will help you get the best results.
Many new ranchers have put the focus on the wrong things and neglected things like the paperwork, which is not recommended. We find the most successful ranchers can efficiently prioritize jobs and continuously analyze what they are doing and how they can improve upon it. So, if you are thinking about moving out West, then here are some tips on how to run a ranch.
Plan for the Unexpected
Life on a ranch can be challenging, and every day can bring a new problem to address. This can be more easily managed if you have an adaptable and flexible management approach. For example, storms can cause damage to fences or cause a tree to fall. These issues will need to be addressed as soon as possible, especially if you are running a cattle farm.
There may also be unexpected costs caused by broken equipment or damaged buildings, which will need to be dealt with. Therefore, it is a good idea to be organized with your books, so you have some spare working capital should the need arise.
Do the Paperwork
Some people love this, while others loathe it, but it pays to stay on top of it. If you need to borrow money or want to get a valuation on your property, then the banks and brokers will want to see up-to-date, accurate, and well-organized financial documents such as cash flow statements, inventories, and profit and loss reports. Without these, you are going to have a hard time getting the money you need or an accurate valuation of your property.
Having someone in the family who likes doing paperwork and managing the financial aspects of the business is always going to be a valuable asset. Some people choose to hire a ranch manager or accountant to look after this side of things, which can also free you up to take care of the daily operations.
Whatever approach you decide on, it is much better to get the books done today, rather than tomorrow.
Running a ranch involves a lot of trial and error irrespective of the kind of ranch. You may have problems with your yields or struggle to attract paying guests, so you should be prepared to change things up if your current strategy isn’t working. Sometimes, simple changes in pastures, irrigation, or management can have a major difference.
Also, try not to get stuck in your ways. Just because your ranch focuses on certain kinds of cattle doesn’t mean that you always have to do that. Many landowners have diversified their operations by opening up lodging for recreational use such as hunting, or they have leased out parts of the land to other members of the community.
Don’t Live in a Bubble
Ranching is all about community, and you should try to get to know your neighbors and other important members of the community. You never know when you will need an extra pair of hands, and you will be amazed how quick people are to help.
Also, keep up-to-date with changes in local and federal laws regarding zoning, land taxes, and conservation, as well as changes in the local environment which may have an impact on the eco-systems on your property. All of these factors can affect your bottom-line and the overall success of your ranch.
When you initially start looking at ranch properties, it will soon become apparent that it is not a simple process, and there are many things to look at. An experienced broker will be well aware of the ins-and-outs of the process and will be on hand from the beginning of the search all the way through to completion.
Therefore, choosing a ranch broker is one of the first things you need to consider, as they will be able to help you draw up a list of your requirements and then search for ranches that best meet your criteria and available budget. Take the time to meet a few brokers before you move forward, as this is going to be a long road, and you don’t want to waste any precious time.
What Is a Ranch Broker?
Ranch brokers specialize in the buying and selling of ranch properties for a wide range of clients. They may have a specific specialty or offer a broad range of services, but in all cases, they will have extensive knowledge of their chosen field and play a pivotal role in the sale.
For buyers, the broker will help you create search criteria and then search for available properties, providing a thorough evaluation and analysis of each option that they suggest for purchase. We will briefly go through the services you should be looking for from a ranch broker.
Reputation and Contacts
The ranching industry is a longstanding one and plays a crucial role in their respective communities. Therefore, you need to find a broker that has been in the game for a number of years. This is because they will have built a comprehensive list of contacts which enable them to find properties of which others might not be aware.
As we mentioned, ranching is built around community, so if you hear a lot of bad reviews about a particular broker, then there is likely some truth attached to it. The best advice is to meet with the brokers in person and see how you feel about them. Do they seem like they are trustworthy and knowledgeable? Do they give you realistic assessments or do they say yes to everything you say?
Range of Services
You need to know this up front, so there are no surprises later on in the process. Look for a ranch broker that offers a range of services starting from initial searches all the way through to after completion. Ideally, they will provide the following:
- Development of search criteria
- Access to exhaustive buyer resources, such as databases and local contacts
- Targeted buying strategies
- Due diligence – Evaluation of properties
- Reporting – Clear and accurate analysis of the properties
- Full assistance in closing the deal – legal, financial, and regulatory consulting (Keep in mind, a broker’s review does not replace consultation with your attorney. )
You can find out whether a broker offers these services on their websites or through specialized publication, but there is no harm in checking when you meet them.
When you meet the prospective brokers, they should lay out a plan of action on how to proceed with the search and future purchase. You need to have a clear picture of what is going to happen and when it is likely to happen. If you leave the office confused or uncertain of what is going to happen, then that broker might not be for you.
Specialized ranch brokers will be aware of the lay of the land and the sheer volume of work that goes into the due diligence process. They will also know about the intricacies of the sales process and the transferring of the deeds. General realtors might not have a full awareness, which causes problems later. So, make sure you feel confident in the broker before starting to work with them.