U.S. ranch buying guide
Jason Spaeth unexpectedly came across more than 7,000 acres of pasture in western Wyoming, USA, in which miles of gurgling creeks flowed through it, and it was also the habitat of sika deer. So broke the first commandment to buy a ranch.
"The first commandment is not to use emotions, but this is my case," said the retired financial services industry executive. In June 2016, he bought this ranch for about 10.5 million U.S. dollars. "I really fell in love with it at first sight."
Speth, who lives in Minneapolis, the capital of Minnesota, plans to raise cattle here and spend the summer with his wife and three sons. But he realized that raising dairy cows alone is difficult to make a profit.
"Our whole family loves outdoor activities." He said. The purpose of this purchase is not only to build a profitable pasture, but also to protect the land well.
Owning a coveted ranch in the western United States is often not economically cost-effective. The price of the ranch is high, it requires long-term care and maintenance, and it is difficult to make a profit.
"Usually, the decision to buy a ranch is not so much for making money, but more for emotional reasons." Joel Leadbetter, general manager of Hall and Hall, a real estate company that specializes in ranch sales )Say.
The vast western region of the United States is like a catnip for spiritual comfort. Buyers from all walks of life who want to try the cowboy life but disregard rationality and prudence have flocked to it. Celebrities such as movie star Harrison Ford, CNN founder Ted Turner, and former talk show gold-medal host David Letterman have set up ranches, and they are racing in between. The image makes modern people fascinated by the pasture.
However, even in a prosperous economic year, it is difficult to make a profit from operating a ranch. Daily operation of a ranch with dozens of cows usually requires the hiring of a manager and at least two or three full-time cowboys. Raising these cows (and cowboys) is expensive. In addition, additional equipment such as tractors and trailers will require additional costs. In addition, as a valuable commodity, the price of dairy cows often fluctuates sharply. In the past year alone, cattle prices have fallen by nearly 30%. In addition, disease and drought can sometimes cause devastating blows to entire herds.
"The livestock breeding industry is complex." said Robert Burch, a Philadelphia venture capitalist who bought a 9,000-acre ranch in Big Timber, Montana in 1998.
Burch sees the ranch as a hedge against inflation, but like Spes, he did not buy the ranch out of investment. He has been working on the ranch since he was a child, and he was intoxicated.
"My dream at the time was to be a cowboy." He said, "I bought the ranch out of passion."
For those who dream of being a cowboy, now may be the perfect time to buy a ranch. Due to the decline in cattle prices, the prices of US ranches have also fallen sharply in recent months. Speth bought the ranch that had been on the market four years ago at a price 30% below the asking price.
Mason & Morse Real Estate is now selling a 4,000-acre ranch in Wyoming for US$14.5 million that integrates animal husbandry, trout fishing, and hunting. The goal that Jiakui is looking for".
"Hot money is everywhere today, but many buyers can't find a suitable investment target." said John Stratman, director of Mason & Morse Real Estate.
If investors want to buy a recreational pasture (perhaps fishing or hunting), then there is more than enough choice. Hall and Hall's latest report stated that recreational ranches had "overall inventory surplus." Stratmon said, "The investment intentions of recreational ranches are not satisfactory, and they have been uninterested."
In Steamboat Springs, Colorado, there is a 1,145-acre recreational ranch with streams converging into little ponds. The sale price in 2010 was $27.95 million. Today, Realtor.com's listing price has plummeted to 16.9 million. US dollars. In 2016, Sotheby’s International Realty sold a 490-acre ranch in the town for $13.2 million.
Precise pricing of various types of ranches is “not so much a science as an art,” said Jim Taylor, a partner at Hall and Hall Real Estate. Accurately assessing the market price of trout-drenched streams or pastures adjacent to elk habitat can sometimes be tricky. The amount of irrigation land, whether it is adjacent to a national protected forest, and the distance from the nearby airport will all affect the actual price of the ranch.
Hall and Hall is now selling the 10,000-acre Miller Lake Ranch in Anaconda, Montana, for $22 million. It is also selling 15,000 acres in Colorado for $32.5 million. The acre of Kessler Canyon ranch. In Bozeman, Montana, Sotheby’s International Realty Branch in Big Sky, a ski resort, put up and sold a 640-acre North Ridge ranch for $5.99 million, with 9 miles of land on the ranch. Hiking trails, the mountains not far away have a sweeping view.
"It's hard to find such a cost-effective ranch anymore," said Ken Mirr, owner of the Mirr Ranch Group, a local real estate agency in Denver.
Box: American Ranch Buying Guide
●Many farms for sale usually come with hunting and fishing licenses, which are also valuable assets.
●Ranch is usually priced according to the "stocking rate", which refers to the number of dairy cows that the ranch can withstand for a long time.
●The degree of groundwater pollution, flood control capacity, and regional restriction planning are several important factors that affect the price of pastures.
●Having a public land lease for grazing or leisure can expand the land area of the pasture.
●Wyoming, Texas, and Nevada are all states that do not levy state income taxes in the United States.
●A freshly grown cow sells for US$1,500, and it costs about US$30,000 per person per year to hire experienced ranch workers. In addition, you have to pay for housing, utilities, and medical insurance; the ranch usually has to slaughter a cow every year for everyone share it.