Starting At Day One: Guaranteeing Ranch Success From The Sale Date, Onward

Posted on: 8 September 2020

Operating a ranch is hard work, and it requires a lot of dedication. Day by day, you will have to make decisions that can either make or break your success in the ranching industry. And this decision-making starts before you even buy the ranch! There are a few things you can and should do during the real estate sales process to help guarantee the success of your ranch once you start operating. 

Secure financing with a low interest rate

Do not simply buy the ranch land with the first conventional loan you are approved for. You can often get a much better interest rate through a federally funded agricultural loan program. For example, USDA loans often require less money down and have lower interest rates than conventional loans. An interest rate that's even a quarter of a percent lower will save you a small fortune over the life of the loan, which is really important since the cost margins on ranch operations are so low. Not having to put as much money down will help you too, since you will have that much more money to spend on equipment and start-up costs.

Don't over-buy land

Many ranchers make the mistake of buying more land than they really need. Some consider this a fail-safe in case they expand one day, and others simply have not taken the time to assess how much land they need, so they over-estimate. Sit down and calculate how much land is really necessary for the size of the operation you want to run. Then, don't buy much more than that. Buying 400 acres when you really only need 200 will leave you with higher loan payments that make turning a profit even harder. Plus you have all that extra land to maintain. 

Walk or drive the whole property

When buying huge tracts of land, it is tempting to just rely on drawings, photos, and word of mouth. But if you don't walk or drive the entirety of the property yourself, some things can spring up later that you did not expect. You may find a pond hidden behind what you thought were just weeds, which makes mosquitoes an issue after rain. You might find that the back 15 acres are too wet to graze animals on. Walking the land or driving an ATV all over it might take a whole day, but it could save you from buying less-suitable land.

If you want to run a successful ranch, you need to be smart about what you're buying from day one. Start by following the tips above, and go from there.

For information about ranch properties for sale in your area, contact a real estate agent.