Things to Consider When Buying a Ranch

October 4, 2021

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At M4 Ranch Group, we know that purchasing a ranch can be a very exciting experience, but there are many things one must take into account to ensure they’re making a sound investment. Being thorough in going through the many things to consider when buying a ranch can seem like quite the time-consuming task but it’s an important one that you should trust to experts like us. We’ve been helping individuals in Colorado and New Mexico just like you find and purchase the ranch of their dreams for years, and in that time, we’ve become experts in rural property and helped every client understand all the things to consider when buying a ranch. We want to share some of this knowledge with you, so here’s our guide to all the things to consider when buying a ranch:

Land History & Quality

Depending on what you intend to use your ranch for, the history of how it’s been used in the past is critical information. Say you want to plant certain crops on the land, you’ll need to know if they can be planted in the soil there, the quality of the soil, and if that crop has ever been grown there before. Soil depth, topography, and water availability are important too. Perhaps you’re looking to raise some livestock, you’ll be needing to know animals have fared on the land in the past. Even if you don’t plan on growing crops or raising livestock, you should consider the terrain variation, current or past flooding issues, water and soil erosion, and the type of irrigation so you know all the potential risks with the land you’re considering.

Local Zoning laws

Certain local laws could prohibit ranching or farming in the area a ranch is located and there may be restrictions on how homes can be built, or a zoning permit may be required to use the land in the way you intend to. It’s best to get this information as soon as possible so you don’t have your heart set on a ranch only for you to realize that you can’t use the land as you intend to because of local zoning laws at the last minute. Even worse, you could face certain fines, penalties, or even imprisonment if you violate a zoning law you’re unaware of. It’s because of these reasons that taking into account local zoning laws are one of the most important things to consider when buying a ranch.

Time and Attention Required

There is a common misconception that ranches and the land they sit on will “take care of themselves,” but this couldn’t be farther from the truth. This is one of the things to consider when buying a ranch because even smaller properties may require upwards of 15, 20 hours a week to be maintained properly, so if you don’t have that amount of time to dedicate, you’ll need to hire some help. This increases costs and gives you a smaller return on investment that you planned on having.

Finances and Taxes

Obviously, knowing the property value and purchasing costs will help you understand how big of a loan you’ll need from an agricultural lender, but you also need to consider the amount of tax exemptions you could be up for. Depending on your tax status, you may be eligible for certain exemptions, including agricultural and wildlife exemptions. This will drive down management costs, meaning that the ranch you may have thought to be out of your price range could actually be within reach.

Water Rights

If the ranch you’re interested in has a natural water resource on it, consult local access laws so you know what activities are allowed and who can be using the water. Like with local zoning laws, there will likely be certain regulations which will influence how you’re able to use the land and it’s best to know such things as soon as possible. This is another of the more important things to consider when buying a ranch considering there could be certain consequences for violating water rights laws.

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