Top Things to be Aware of Before Buying Ranch and Land Property
We’ve seen increased interest in Ranch and Land properties, both here in Central Oregon and throughout the Mountain West. In part due to the pandemic and people shifting away from cities and towards rural areas, maybe in part due to the “Yellowstone effect” – whatever is continuing to drive it, the interest is real.
Whether it be a horse property, hobby farm, or fully functioning hay operation, it’s important that you know your goals, understand the complexities of ranch life, and connect with the right real estate professionals to help guide you.
Understand the basics about land in Oregon
It is always wise to fully understand the ins and outs of any real estate purchase but especially when buying a ranch. Let’s start with the law. Land use laws in Oregon are some of the strictest in the country. It is important that you understand the laws and policies that affect your property, both now and in the future. Next, having a good understanding of well water versus city water is key to your success. Not only will the water be a source for your home, but it is how you will water your livestock and your crops. Finally, understanding zoning is crucial as it can potentially cut your property taxes in half. Exclusive Farm Use (EFU) is a clearly defined zone with big implications, both positive and negative. As well, being sure your property is zoned for the number of buildings that you desire is crucial.
Home or land, what’s most important to you?
If you’re looking for a ranch and land property, it’s very important that you keep your goals and desires top of mind. Some people want a big, beautiful piece of property for a large-scale operation and care less about the size or condition of the home. Others want a sprawling, upgraded residence with enough land to have a few horses. Before you start searching, it’s important that you get clear on what you want. It is rare to find a ranch and land property that has everything, and when they do, the price tag can be a deterring factor.
Water, water, water
As we know, water is a huge issue in the west and Central Oregon is no stranger. Water on a ranch property takes on a new level of importance as you’ll likely have crops and animals to keep hydrated and healthy. You will also have water rights to use and protect. It might seem obvious, but making sure you have a good, deep producing well is important. I recommend getting a water map of your property from your irrigation district to be sure you understand how to water the correct areas. And do not ever let your water rights go. You can go five years of none-use before your rights can be taken away. Further, understanding the different irrigation districts and the seniority of each is crucial. In years of drought, irrigation districts with senior water rights will continue to have water while newer water districts will not send water even if it’s already been paid for. And down the road, should you decide to sell, having numbers to show potential buyers is very important to prove your profitability and production.
Price and profitability
Determining value for ranch and land is very difficult. It is hard to find two that are alike. When we put a value on a ranch, we typically start with how much the land and water is worth and add replacement value to items such as the home, shop, barn, arenas, and fencing. Ultimately the market is going to tell you what a fair price for your ranch or land will be. If you can add sources of profit to your property over time, this will greatly help the resale value of your land. Boarding horses can raise substantial income and be an attractive profit stream for owners down the road. As well, keeping hold of your water rights and understanding the long-term value is important for your own investment and those that may hold interest in the future.
Farming is a way of life. It is a full-time job. There are no days off, no vacation days, and no sick days. There is so much pride to be had in raising your own food and living off the land and when done right can be very lucrative as well. This requires you to master your craft and to stay educated. Having a real estate broker that is educated on ranch and land is of utmost importance in guiding you to find the perfect fit.