Time to Buy a Ranch or Duck Club?

Is this the time to buy a ranch? Duck club? Maybe not, but it is definitely the time to make serious progress towards buying hunting property. Here are some ideas to get you started.

 

If you want a hunting ranch, you must have the means to buy it and you probably won’t get enough money to buy a ranch by putting money in your savings account or buying stock – unless you can identify the next Microsoft and buy it early.

 

Why not? If you put money in savings or buy stock, you’ll have to use after-tax money to buy your ranch. The government will take 15-25% (or more) of the return you get on your earnings. So, unless you have a huge income, you’ll not be able to come up with enough buying power, or at least it will take longer to do so.

 

On the other hand, if you purchase investment real estate, you will likely be able to transfer your equity from real estate investments to the ranch you choose and defer the taxes indefinitely.

 

Yes you will have a tax obligation, but you won’t have to pay it until final liquidation of the ranch. If you own the ranch until you die, the tax consequences will be irrelevant in your lifetime.

 

We’re in a buyer’s market. Now is a good time to purchase some types of real estate investments. The first type is the “no-brainer.” A no-brainer is an investment that comes along very seldom, but when it does, you’ll know it. Buy it. But because you can’t count on no-brainers here’s some other ideas.

 

If I were a young aggressive investor with time on my side, I’d be looking for vacant land that has future development potential. I’d be trying to purchase with very little cash from a seller who could give me time to seek development approval before I had to come up with significant money.

 

Or, if I were flexible about where I could live, I’d be attempting to use the buying power for my personal residence to purchase a home that had surplus property attached to it. Down the road the surplus property could be subdivided off and used to generate funds for a ranch purchase or other real estate investment.

 

I’d also be looking for small residential properties that have investment bonus potential. Some properties have the potential to blossom as investments as time passes and neighboring properties come available. Often these properties sell for prices that do not reflect the “bonus” aspect.

 

One situation like this is a house that, when combined with the house next door, generates surplus property – sometimes an extra building lot. The extra building lot may not be anticipated by the sellers. Unfortunately the down side is you don’t know when or if the neighbors will sell. But, if the home is in a typical residential area, the odds are in your favor as statistics show home owners tend to sell every five years or so.

 

If you pull it off, you get the benefit of the appreciation of the property plus the bonus value created by subdividing off the generated lot.

 

Sometimes properties may become appropriate for zoning changes that cause the property to take a leap in value. The big guys have the advantage here, and zoning changes don’t always work to your advantage, so you’ve got to be careful with this one.

 

And, I wouldn’t quit looking for hunting property. An interest in a duck club or a small club you can purchase with a couple friends. You may find a small ranch that has enough hunting potential for you and also an occasional friend. Then as you accumulate more buying power, you can expand or combine funds from the sale of the smaller hunting property with other equity to purchase a larger ranch or duck club.

 

By purchasing any high quality investment real estate, you are getting closer to owning a ranch. When the right ranch appears, get it into contract and sell your other property. By using the IRS 1031 Tax-Deferred Exchange rules, the equity can be transferred to the ranch along with your tax obligation.

 

These are some of the ideas I’ve used to speed up the process of building up buying power, but don’t stop with these. Use your own creativity to make your investments successful. In order to do that, you’ll probably need to set asside time to study real estate investements in your area and ponder over investment strategies. Make good decisions.

 

As I’ve said before, once you get to the point where you can own recreational property, you have an investment that gives you a continuous source of personal enjoyment while you own it, along with long-term income potential for your future should you decide to sell.

 

The first step is to get started and today’s buyer’s market is a good time for that.