Buying a ranch goes beyond the boundaries of owning a normal business. It is a lifetime investment: probably one of the biggest that you will ever have to make. If planned properly, purchasing a ranch is exciting, profitable and life-changing. If done badly, however, you could end up fighting to keep it going - leading to years of stress and potential bankruptcy. Before you make the decision, we have put together a guide of factors to be considered prior to making that huge purchase. Although there will be other questions going through your mind, these are some of the key, important ones:
How many animals will the property support?
Sellers are likely to tell you that there is room for more animals than there really is. Do not get fooled into believing the first thing that you hear. There is a simple solution to this dilemma: ask the local Natural Resources Conservation Services. They can give you details about a range of details on the farm, including the type of soil, estimated rainfall, and the condition of the vegetation, in addition to the production potential of the ranch.
What else will I need to buy?
Buying a ranch is not simply about buying animals or crops and leaving them to get on with making you a profit. A whole host of extra costs need to be considered, such as machinery (e.g. tractors), feed for the animals, extra buildings to build (for storage / homing the animals, etc) and wages for other members of staff. In order to make the ranch as profitable as possible, write down a list of all of your predicted expenses, and add some extra on to ensure that you have covered as many potential expenses as you can.
How will I finance the investment?
Coming up with the cash for a ranch is not easy, especially when you work out the amount of expenses that need to be covered. There are various options available to you; one of which is a guarantor loan . If someone is willing to cover your payments in the event of you defaulting on payment, guarantor loans are a fantastic choice of funding a new investment in a ranch.
How much of my time will I have to invest?
Do not underestimate the time as well as the financial commitment of owning a ranch! Even a small ranch can still take hours out of your week; owning one whilst holding down a full-time job is difficult. Consider how long each area of the ranch takes before investing in one. Even if you need to employ someone to take care of the ranch, this might be easier than you trying to take care of everything yourself.
Where can I buy livestock?
Although livestock is not always expensive, you need to check that you are purchasing good-quality livestock. Talk to some other ranch owners, or build up a network of respected contacts to ensure that you do not end up regretting your purchases. It is also worth speaking to the previous ranch owner if possible, who should be able to direct you towards a suitable supplier.