Considerations to Make Before Purchasing Ranch Land
Ranches for sale in Florida come in all shapes and sizes, so it is important to have a clear understanding of your objectives before taking on this new venture. Whether you plan to use the land as a for-profit venture or for recreational purposes, you must identify how internal and external factors will affect your investment.
To help you make a knowledgeable decision, our land experts have outlined three important considerations to help you choose the right ranch to meet your goals.
1. Consider Time Commitment
If your motivation for purchasing a recreational-use ranch is privacy, searching for ranches for sale in Florida outside of metropolitan areas may be perfect to meet your objectives. On the contrary, if you want the feeling of privacy with the luxury of being within a few miles of minor living necessities, being hours away from stores and other homes, may not be the right choice. It is also important to properly gauge the amount of time required to ranch the land yourself, while a few acres may not seem like a lot, be realistic in estimating the time commitment required to care for and maintain the property.
For-profit ranches can have multiple revenue streams, which what makes them such an attractive investment opportunity. Regardless of whether you plan to utilize the land for cattle ranching, as a guest ranch or for hunting, upkeep and maintenance alone will require a significant amount of time. If you plan to purchase multiple Florida ranches for sale, be sure to conduct a meticulous audit of operating responsibilities such as caring for livestock, marketing cattle and other resources to buyers, and managing financial records.
2. Consider Variable Cost
Every land purchase comes with certain variable cost. Even if you plan to use the land for recreation, consider how increases in ranch operational cost could affect your purchase. When it comes to ranch land, regardless of the size or use, your gross profit and net income are largely determined by the value of annual production and variable costs such as hay, the purchase of new machinery, and unexpected land maintenance. Operational costs typically run in cycles, so take time to go over previous years’ profit margins to help identify trends.
3. Consider Outside Factors
Even though variable cost can not be precisely pin-pointed, as a property owner you know they are there, and can somewhat identify them in your profit projections. There are, however, some factors that are not so easily identifiable. For example, have you considered how population growth and commercial building could affect your ranch property? Have you checked to see if the surrounding areas have uncontrolled hunting and fishing? What about old dump sites? Is your land on or near hazardous material that could harm your animals and damage the land? There are many outside factors that could potentially have an affect on your purchase. This doesn’t make Florida ranches for sale a bad investment, but it should prompt you to do a full risk analysis of your property to effectively plan for unexpected situations that may come along.
Purchasing ranch land is a very exciting opportunity, but like with any major investment, it is important to consider your objectives and make sure your purchase will allow you to meet your short and long term goals. If you are new to ranching, it is important to speak with an experienced land expert who can ensure a successful purchase.