Posted By socialseo Apr 03, 2020

Questions to Ask When Buying a Ranch

For someone that has dreamed of buying a ranch all their life but has never owned one, this will give you a few questions to ask when buying a ranch. While not an exhaustive list it will definitely help you get a start on some of your due diligence. I would always suggest having a ranch broker representing your interests in the transaction and not just talking to the listing broker. You want someone on your side of the table asking questions and helping to do the due diligence on the property.

Mineral and water rights are critical to value and understand in any ranch transaction. Brokers will usually be pretty vague when discussing these items. You can get a general understanding but likely if it is not easily understood a consultant or lawyer may need to be hired. Mineral rights are hard to come by these days when purchasing a ranch and purchasing 100% of all mineral rights is not the norm. Many times you will get the owners’ mineral rights to convey but they do not even know what they own. In non-producing areas, this may not be that big of a deal. If you are in a county that has mineral production in close proximity it is an important part of the decision. Water rights break down into domestic, stock and irrigation rights. You need to know how much volume you are getting, a window of use, whether the owner has been using the rights and the type of use.

Easements and access are another very important factor when considering questions to ask when buying a ranch. You want to know if you have good access to your property and that the type of access is what you need. If you buy a ranch with legal access but it is for agriculture or livestock use and you are wanting to build a 10,000 square foot mansion for residential use you may be in trouble. You also want to know whether there is an Easement across your property by someone else to be able to use your property. Many times there are Easements for utilities that are normally not a big deal but having an outfitter that or ranch that has a right to drive across your property anytime during hunting season would be a real bummer.

If you are buying a ranch for hunting or recreational pursuits you need to know the hunting district and the regulations. They do vary. Nothing like purchasing a ranch to find out you are in a draw with no landowner preference that has 5% odds of being drawn. This just needs to be looked into since many out of state buyers have a learning experience when dealing with big game hunting in the West.

Public land is also something that is something to look into. If it is adjacent you would like to know if the public land has full, little or no access. The ones you would really like are the ones that landlock public land where you effectively own that land. Flipside would be having land next to you that everyone and their dog use to hunt. Not always a bad thing since it may drive game to the private land but you just need to understand the situation.

Public land leases can be important. Are they transferable? Sometimes the value in a property is very dependent on keeping the lease. If your land is winter pasture but depends on the public land for summer pasture it is important to understand the situation. Normally they transfer or renew pretty easily but a general understanding is good to know.

Carrying capacity of the land if you want to have a ranch that brings in income from livestock is important to understand. Does the ranch have hay you can put up for feeding in the winter? Is it a year-round operation or do they feed during summer and sell fattened cattle in the Fall? Do you have the water supply and water rights to support the number of animals? Ranches will be rated for AUMs(Animal Unit Months)and that will help for you to understand carrying capacity but understand that varies depending on owners decision on range management.

If you are starting to learn and look about buying a ranch please feel free to reach out with questions. I love talking land and enjoy helping educate buyers on the hundreds of little factors that need to be considered. I would love to help you.

Buzz Tatom is an Advisor/REALTOR® for Engel & Voelkers in Montana. He specializes in farms and ranches. A ranch owner himself he knows the complications that a buyer or seller will go through and is able to help navigate the complicated process. Give Buzz a call or fill out his contact form and put him to work finding you the right property so you can start building memories with friends and family!Buzz Tatom