Published on March 24th, 2016 | by Balanced Family0
Why Purchase a Ranch? Steady Returns are Just One Reason
Why purchase a horse ranch? As the New York Times points out, the benefits often extend beyond the financial (and, of course, the financial benefits are worth examining).
Over the past few decades, ranch ownership has emerged as a lucrative investment class for people who have the money to spare. Certain prize ranches are currently down in price by as much as 30%, even as returns equal out to about 3% a year for these properties. A 3% return is great — and it?s not the only thing you?ll get out of owning a ranch.
Farmland for Sale Offers Steady Returns
Agricultural land offers steady returns, something many investors prize — and the returns will only improve as food prices continue to rise. The Farmland Index says that last year, prices rose 8.6%. This makes the land the food is growing on inherently more valuable. While farmland is lucrative, though, it often comes back to the classic image of the ranch — horses and cattle. A horse ranch for cowboys.
It?s a Longterm Investment
Warren Burke has been a lifelong rancher, and over the years he acquired and sold numerous ranches, until he finally sold the EA Ranch in Wyoming for $7 million. He had originally purchased this ranch in 1989 for a fraction of the price, at $1.4 million. ?Cattle are a business; the ranch is an investment,? Burke explained in an interview with The New York Times.
Always Do Your Research, and Know Your Land
Johannes von Trapp — yes, one of the members of the Trapp family whose lives were fictionalized and immortalized in ?The Sound of Music? — advises potential ranchers to do their research and know what they?re getting into — especially if they?re not a local to the area. Von Trapp?s first ranch was in British Columbia, and he assumed that he could hire the indigenous people living there during the summer to help out with cattle and horses. He was in for a surprise when it turned out that they all went salmon fishing — 100 miles away.
Buying a ranch isn’t the right decision for anyone. It’s not like buying stocks and bonds, then letting it sit and allowing the cash to roll in — instead, ranching requires an active knowledge of the land you own, and the animals you’re keeping. For the right person, though, it can be a great experience.