How to buy a cattle ranch in the United States: don’t be moved

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Jason Spaeth broke the first commandment to buy a ranch when he stumbled upon a 7,000 acre cattle ranch with miles of streams and deer habitat in western Wyoming.

“Rule number one is not to get emotional, but I did,” says the retired financial services executive, who paid about $ 10.5 million for the property in June. “I really fell in love with the place.

Spaeth, who lives in Minneapolis, plans to run the property as a cattle ranch and spend summers there with his wife and three sons. But he realizes that it will be difficult to make money in the cow business.

“The family has a real passion for the outdoors,” he says. The goal is not only to create an economically viable ranch, he says, but also to preserve the land.

The dream of owning an iconic Western ranch often doesn’t make financial sense. Ranches are expensive, require constant attention and maintenance, and rarely make money.

“It’s often [a decision] more emotional than financial, ”says Joel Leadbetter, managing director of Hall and Hall, a broker specializing in ranch properties.

The image of the Wild West remains a form of catnip, enticing buyers willing to put logic and good judgment aside to live the cowboy life. Images of famous ranchers, such as actor Harrison Ford, CNN founder Ted Turner and former talk show host David Letterman, straddling the lineup have only increased the appeal for a generation. modern.

Kessler Canyon, Colorado, $ 32.5 million © Tom Reid

Yet even in a good year, a working ranch is a tough way to make money. Any property with more than a few cows typically requires a ranch manager and at least two or three full-time cowboys to manage day-to-day operations. Keeping these cows – and cowboys – fed and happy is expensive. Equipment such as tractors and trailers increase expenses.

In addition, cows are a commodity and prices can fluctuate considerably. Cattle prices have fallen about 30 percent in the past year alone. In addition, disease and drought can devastate a herd.

“It’s a very complicated business,” says Robert Burch, a Philadelphia-based venture capitalist who bought a 9,000-acre ranch in Big Timber, MT in 1998. “It’s really a tough way to go. earn money.”

Burch sees his ranch as a hedge against inflation but, like Spaeth, he did not buy the property as an investment. As a teenager, he worked on a ranch and caught the virus.

Fishing in Kessler Canyon

Fishing at Kessler Canyon © Tom Reid

“I really wanted to be a cowboy,” he says. “I bought it out of passion.

For aspiring cowboys, this might be a good time to buy. With the decline in livestock prices, ranch prices have fallen in recent months. Spaeth paid about 30 percent less than asking price for his property, which had been up for sale for four years.

Ted Turner at his ranch, Red Rock, Montana

Ted Turner at his ranch, Red Rock, MT © Ray King

Mason & Morse promotes a 4,000 acre ranch in Wyoming with cattle ranching, trout fishing and good hunting opportunities, which he describes as the epitome of “all. the qualities sought by today’s trophy ranch investor, for $ 14.5 million.

“There’s a lot of money out there, but a lot of buyers can’t find what they want,” says John Stratman, director of Mason & Morse.

Horses herded together at sunrise in Montana

Horses gathered at sunrise in Montana © Getty

If you are looking for a recreational ranch – perhaps for fishing or hunting – there are plenty of options. A recent Hall and Hall report states that there is “excess inventory at all levels” for recreational ranches. “There hasn’t been a lot of motivation to buy recreational property,” Stratman says. “They’re just sitting there.”

In Steamboat Springs, Colorado, a 1,145-acre recreational ranch with stream-fed ponds was originally listed at $ 27.95 million in 2010. It is now priced at $ 16.9 million, according to Realtor.com. This year, a 490-acre ranch was listed in the same town for $ 13.2 million via Sotheby’s International Realty.

North Ridge Ranch in Bozeman, MT, $ 5.99 million

North Ridge Ranch in Bozeman, MT, $ 5.99 million © Ryan Day Thompson

Putting an accurate price tag on any type of ranch property is “more art than science,” says Jim Taylor, Hall and Hall partner. It can be difficult to assess the market value of a stream full of trout or the proximity to elk habitat. Irrigated land, proximity to a protected national forest, and a nearby airport can all affect the price.

Hall and Hall sells Miller Lake, a 10,000-acre ranch in Anaconda, MT, for $ 22 million. The same agent is selling a 15,000-acre Kessler Canyon ranch in Colorado for $ 32.5 million. In Bozeman, MT, Big Sky Sotheby’s International Realty is selling 640 acres North Ridge Ranch with nine miles of hiking trails and mountain views for $ 5.99 million.

Steamboat Springs, Colorado, 490 acre ranch, $ 13.2 million

Steamboat Springs, Colorado, 490 acre ranch, $ 13.2 million

“It’s hard to find comparable sales,” says Ken Mirr, owner of Mirr Ranch Group, a Denver-based brokerage.

With a working ranch, experts say, for the numbers to add up, you need a big gap with a big herd.

“What you realize over time is that it’s gaining momentum [to be profitable]says Burch, who has now put his own expanded property up for sale. The Hobble Diamond Ranch, which now totals over 30,000 acres, costs $ 35 million. It includes six miles of frontage on the Yellowstone River and 1 250 acres of irrigated cropland.

North Ridge Ranch has nine miles of hiking trails within its 640 acres

North Ridge Ranch has nine miles of hiking trails within its 640 acres © Ryan Day Thompson

Yet Burch does not leave the ranch. In fact, he’s looking to buy something bigger. “From a lifestyle perspective, it’s great,” he says.

The Hobble diamond has been on the market since the spring and Burch is in no rush to sell it. He expects it will take time to find a buyer.

“It’s very subjective when buying these properties,” he says. “Everyone has their own idea of ​​the perfect. “

Purchase guide

● Many properties are sold with hunting or fishing licenses, which can be valuable assets

● Cattle ranches are often rated by “carrying capacity”, which is the number of cows the land can support.

● Groundwater contamination, flooding and zoning restrictions are some of the issues that can affect a property’s value.

● Public leases for grazing or recreation can help expand the size of a property

● Wyoming, Texas and Nevada are among the income tax free states.

● A young cow raised costs about $ 1,500. An experienced ranch man earns about $ 30,000 per year, plus the cost of housing, utilities, health insurance, and typically one cow per year for meat.

What you can buy for. . .

$ 2 million An undeveloped 35 acre “ranchette” next to a golf course

$ 10 million A 500 acre ranch

$ 25 million A 45,000 acre working cattle ranch with private hunting and fishing rights

More announcements on propertylistings.ft.com

Photographs: Tom Reid; Ray King; Getty Images; Ryan day thompson

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