This month my ranch update is about “the ranch re-set”.
While the residential real estate market is challenging, with hundreds of foreclosures on the market and prices dipping ever lower in western Colorado, ranches are a different story. In particular, we’re seeing some of the old-time neglected properties find new owners who are committed to investing serious capital with the goal of making them productive ranches again. You see, some sellers got an appraisal five years ago and received an eye-popping number and they just can’t get those multi-million-dollar dreams out of their heads. Quite often, they’re out-of-state relatives of the old rancher who finally passed away, and they think the old place is worth $10,000 an acre. Well, it’s not.
When buyers see caved-in irrigation ditches, tangled old fences, a back lot full of old vehicles and metal junk, and a house that needs to be scraped, they’re doing the math in their heads. I’ve seen several of these places go under contract lately, and have gotten clean-up bids of up to $50,000. One place cost $22,000 just for asbestos cleanup. Then you start factoring in $150,000 for irrigation improvements and $75,000 for plowing and re-seeding the hayfields—BEFORE you start building a house—and you really have to sharpen your pencil to make an offer. Quite often, the biggest factor is educating the sellers with a line-by-line budget of what it’s going to cost to re-set the ranch into production, factored against the value of the irrigated acreage, the dryland acres, the water rights, and any extraneous factors such as creek frontage or BLM access.
The beautiful part of it is seeing a worn-out, beat-up old ranch go to an owner who has the funds to put it into good working condition again. I’m not talking about 10,000-square-foot luxury mansions and ostentatious ranch gates—I’m talking about good functional corrals, an engineered irrigation system, a nice tight barn and a tasteful, well-built home. One by one, these properties are shining again. It’s a lot of fun to be part of that process.
Of course, well-managed properties with quality improvements are strong sellers if they’re priced right and marketed well, and we have several of those in our inventory. Whether buying or selling, call me for a market evaluation.
Wed, 04/13/2011 - 16:18 | 
gary
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The Ranch Re-Set
By Gary Hubbell
United Country Colorado Brokers
February 17, 2012
IT’S TIME FOR A RE-SET
This month my ranch update is about “the ranch re-set”.
While the residential real estate market is challenging, with hundreds of foreclosures on the market and prices dipping ever lower in western Colorado, ranches are a different story. In particular, we’re seeing some of the old-time neglected properties find new owners who are committed to investing serious capital with the goal of making them productive ranches again. You see, some sellers got an appraisal five years ago and received an eye-popping number and they just can’t get those multi-million-dollar dreams out of their heads. Quite often, they’re out-of-state relatives of the old rancher who finally passed away, and they think the old place is worth $10,000 an acre. Well, it’s not.
When buyers see caved-in irrigation ditches, tangled old fences, a back lot full of old vehicles and metal junk, and a house that needs to be scraped, they’re doing the math in their heads. I’ve seen several of these places go under contract lately, and have gotten clean-up bids of up to $50,000. One place cost $22,000 just for asbestos cleanup. Then you start factoring in $150,000 for irrigation improvements and $75,000 for plowing and re-seeding the hayfields—BEFORE you start building a house—and you really have to sharpen your pencil to make an offer. Quite often, the biggest factor is educating the sellers with a line-by-line budget of what it’s going to cost to re-set the ranch into production, factored against the value of the irrigated acreage, the dryland acres, the water rights, and any extraneous factors such as creek frontage or BLM access.
The beautiful part of it is seeing a worn-out, beat-up old ranch go to an owner who has the funds to put it into good working condition again. I’m not talking about 10,000-square-foot luxury mansions and ostentatious ranch gates—I’m talking about good functional corrals, an engineered irrigation system, a nice tight barn and a tasteful, well-built home. One by one, these properties are shining again. It’s a lot of fun to be part of that process.
Of course, well-managed properties with quality improvements are strong sellers if they’re priced right and marketed well, and we have several of those in our inventory. Whether buying or selling, call me for a market evaluation.