Over the last couple of years, investments in ranch land has generated considerable press. Majority of the press has been focused on Midwestern farmland where row crop production is high. Most investors are “going West” to buy the rich ranch land in the region.
You can invest in ranch land for a variety of reasons. For instance, you can buy the land with the intention of eventually selling it at a profit, fulfill a philanthropic goal of preserving land through conservation or passing it on to your heirs. Montana, New Mexico, Oregon, Nevada, Wyoming, Idaho and Colorado are some of the top states where ranch sales are booming.
While ranch sales are being driven by investor demand, activity has also been fueled by fringe benefits. You can buy a ranch to be your place of escape and rejuvenation. But there is more than that. Other benefits of owning a ranch include:
Beyond investment, another reason to buy ranches is to enjoy the outdoors. When you have a ranch, you can have a place to hunt and fish with your family and friends.
Competition for ranches has been driven by many factors. For example, traditional farmers re-investing farm income and institutional investors, such as pension funds looking for investment.
Over the years, younger investors have been looking to buy operating ranches rather than traditional farmlands. Investors are looking for quality ranches that can be used for livestock operations that offer economics of scale, protection against inflation, current income and a safe long-term investment.
Investing in ranch land comes with a large number of attractive benefits, including tax exemptions and incentives. As a ranch land investor, you should know which tax breaks will apply to your operations. Some of the potential deductions you may qualify for include capital and conservation expenses related to privately owned land that is used for ranching. You can also qualify for tax exemptions on the cost of constructing of dams and ditches, restoring oil fertility, and grading land.