Vail Daily column: Is a ranch a good investment? | VailDaily.com
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Vail Daily column: Is a ranch a good investment?

Dear Joan,

I have always wanted to be an owner of my own “little piece of the West.” The downturn of the economy in 2008-11 made me think twice about my plans to purchase some outlying property, as I fear it is not as “liquid” as residential or commercial property in town. I know you have sold a lot of ranches and large acreages. What do you think about the merit of my dream as a sound economic investment?

Dear Rancher-to-Be,

You have a legitimate concern about liquidity of an investment in Western Colorado ranches and acreages that might be considered outlying. Prior to answering your question in detail, I would like to qualify that in general, the “rural” properties that are close to town and on well maintained and/or paved roads can be a quicker sale at market value pricing than properties located far from a commercial hub.

It isn’t that you can’t sell ranch land quickly; it is just the fact that a sale for a good value price may take considerably longer than an in-town property. If the property you are buying is truly an outlying property, then it is often a discretionary buy, rather than a necessity, so there is a smaller pool of buyers desiring and capable of qualifying to buy ranch property. However, besides how fast you can sell the ranch you are looking for, there are other important factors to consider before making your decision as to whether or not your dream could be a sound investment:

• Many investments do not work as short-term or liquid-type investments. Most of the luxury homes in this valley are not necessarily quick (liquid) sales. But high value properties have historically held their values in good and bad economies. Prime property is always prime property and historically, always paid off.

• There are actually large investment groups starting to buy up ranch lands in the West as good long-time holdings. This might be an indication that even big business knows that the good properties have long-time value potential.

• There is merit in enjoying your investment. I personally believe this is a very important ingredient in building any wealth portfolio.

• There are ways to have ranch land pay for itself, or at least defray some expenses depending upon the size, location and assets.

• Once again, there is a limited quantity. I am not saying that we are nearly out of good ranch parcels, but there are less ranching properties locally and statewide as development continues to pay good money for land that can be subdivided.

If you choose wisely and acquire as many features as your budget will allow, then you can greatly enhance the value of your property. Your knowledgeable real estate broker will help you assess the value of the views; access to the property; type, quality and quantity of your well; water rights (if applicable), live water for aesthetics and recreation; minerals rights, if any; game animals on property; access to public ground and much more.

In my biased opinion, I think you should check with your trusted ranch broker and investigate your possibilities for now or in the future. What is the worst that can happen? You get to go on tours of beautiful property in our wonderful state, whether or not you decide to buy into today’s market.

Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or http://www.SkiAndTeeHomes.com.


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