10 Things You Should Know About Buying a Ranch or Land

1. Choose a Professional

You need your ranch-land purchase to go as smoothly as possible. Ensure a successful transaction by choosing a specialized broker with the experience necessary to work with you throughout your purchase, from beginning to end and beyond.

2. It's all about the water

Water, water, water! This is an important element in profitable farming. Your professional can help you obtain the necessary reports to insure economical and good quality water.

3. Getting a Loan

Ranch and land loans have different terms than those of residential loans.  Typically they require a 35%-50% down payment, and rates are higher with a shorter term. You can expect to pay about 1%-1.5% higher rates than that of home loans.

4. Watch out!

Unresolved environmental issues can not only cause headaches, but heartaches as well.  Watch out for such problems as underground fuel tanks, chemical storage, and other potential environmental problems. We recommend a Phase One environmental review on all properties that may have concerns.

5. Size matters

Parcels that are 10 acres or less in size are more expensive per acre and usually don't reflect agricultural value.  These smaller properties are considered "home sites" and are usually offered at a premium price. The value in the smaller parcels is the "pride of ownership"

6. Income

Very few ranches in Ventura County will service the debt of their purchase with revenue. A higher down payment will help with the cash flow and an outside income source should be considered if debt is involved.

7.  Managing the ranch

First time ranch owners should recognize that they can do some of the ranch work themselves.  However, it's often a wise move to hire a farm manager for the first few years to help you learn the ropes. Your profit usually is directly proportional to the amount of effort you spend.

8. Know the history

In most cases, production history and knowledge of current farming practices is necessary in order to ascertain the value of a particular ranch.  However, the history is not as important if the property is purchased for alternative uses such as a change of crops or a conversion to a horse and recreational facility.

9.  Zoning

An understanding of Ventura County zoning laws and development plans is crucial for an investor with long-term goals. Your professional can help you identify current zoning and allowed uses.

10. Crops

Ventura County agriculture is constantly in transition. Profitable crops are always tested to replace those whose market is no longer in favor.

Feel free to contact me any time to further understand Ranch and Land purchases.