Owning a piece of land – a piece of American wilderness; an equestrian property, acres of land, a ranch house – Whatever it may be, the desire is there but you want to do it wisely.
Rolling grassland, live water, hill country views; this becomes the dream of a lot of people moving to Texas and especially the hill country. The hill country is defined as a “25-country region of Central and South Texas featuring tall, rugged hills consisting of thin layers of soil atop limestone or granite.” It’s ideal for ranches, equestrian property, and farmland. Whether you’re moving from the big city or just want a little more land, start at TexasforSale.net for the ultimate tips to ranch living and buying as well as the newest listings in the area.
Owning a ranch can provide a variety of benefits such as true enjoyment of nature and uninterrupted family time. However, choosing the property and managing the land carefully can provide tangible benefits as well. Research shows that working ranches can yield 1% to 3% of income annually and they can usually more than pay for their expenses and provide returns better than a CD.
Class A ranches are those that provide the best location with profitable capital operations and wildlife habitat. Due to rising commodity prices, a limited supply properties and deep-pocketed owners, these type of ranches weathered the financial crisis and recession over 10 years ago. These are difficult to sell though in a down market.
Smaller, recreational ranches are easier to sell that may have it more difficult time weathering financial strains. But regardless, there’s tremendous value in owning land, especially if that land provides some sort of live water such as streams or rivers. It’s important to understand ranch ownership as it can be a very tedious and times consuming responsibility.
Here are some key points to consider when finding, choosing and purchasing a ranch in Texas Hill country.
#1. Water rights.
Water rights are an important part of the ranch process. Buyers need to understand the extent of their water rights and also how to handle their portion of the stream or river they may own. Public access may also be an issue that you are unaware of until you buy the home and then have the public traipsing over your land to get to the river. Make sure you understand your water rights before finalizing our ranch or property.
#2. Mineral rights.
Land rights and mineral rights often don’t go hand-in-hand so it’s important to understand what lies beneath your property. If another owner has a claim there is a possibility they could drill on your property in the future gaining you nothing. It’s important to understand mineral rights and if they affect the land you’re potentially buying.
Conservation easements protect land from future development but you’ll also want to clarify if your land has any additional easements either for roadwork, future development or from the government.
#4. The livestock.
Will you be purchasing the home for livestock needs? If so, you need to ask yourself how many animals with the property support? Where will you buy livestock and will you get any tax savings from the agricultural endeavors? Speak to your real estate agent that is proficient in ranch buying for details on livestock and income expected.
#5. Yearly costs.
It’s very common for land and ranch owners to under estimate costs. Although bills are typically paid throughout the year, sales usually only occur once or twice a year. Breeding, harvest, slaughter, or however the property is going to make money typically comes all at once but you’ll need to plan out budgeting each month’s expenses ahead of time.
Make sure you understand the boundary survey, access to the property, zoning and land-use restrictions, wetlands, potential flood or drainage issues, groundwater contamination and other issues such as uncontrolled hunting and fishing on the property. These are all things to consider when purchasing a ranch and issues to either ask the seller, the listing agent or the local land-use office.
Ranches can be profitable but it’s important to note that several years may not bring a profit while others may actually cost money. While owning a ranch is difficult in many parts of the country, it’s a little bit easier in Texas. There are five large cities and generally strong demand for ranches. Make strong considerations on where to improve the value and where to let things go. Put the money into what will actually make money rather than spending money on items that will not add value.
#8. Start small.
If this is your first time owning a ranch or farmland start with a small piece of property, typically between 10 to 20 acres. Owning a $300 ranch after you’ve lived on a 10,000 square-foot lot in the big city is too drastic. You may end up losing more than the farm.
If you’re ready to get started or have additional questions on buying a ranch in Texas contact my office today. Beautiful 5+ acre ranches in Tierra Linda Ranch, which is a great place to start.