PROP­ERTY: COW­BOYS WANTED

How in­vestors can lasso their own piece of the Amer­i­can West with a lit­tle grit, re­search and pa­tience.

The Peak (Hong Kong) - - Contents - STORY ZACH REFF

How in­vestors can lasso their own piece of the Amer­i­can West with a lit­tle grit, re­search and pa­tience

Imag­ine wak­ing up to the morn­ing sun streak­ing across your face as it sneaks into your room through nar­row slits in an­tique wooden blinds. It’s si­lent all around you. Not truly si­lent of course, but the kind of tran­quil quiet­ness that only ex­ists miles away from the nearest big city on the open prairie. You open the front door and are greeted by a cool breeze blow­ing in from the grass­lands that seem to stretch on for­ever to the east. In the dis­tance, dozens of cat­tle graze in the fields and wild horses run with aban­don be­hind them, sil­hou­et­ted by the dawn sun. To the west, a gen­tle stream whis­pers through the land­scape with snow-capped moun­tains and un­touched wilder­ness loom­ing in the back­ground. Wel­come to the Amer­i­can West. Wel­come to life on a ranch.

GIVE ME A HOME WHERE THE BUF­FALO ROAM

The Amer­i­can West is the place you have in mind when you think of the Wild West. This is the land of old John Wayne films, where cow­boys and Na­tive Amer­i­cans once fought atop horse­back, and where train rob­beries be­came the stuff of leg­end. Even to­day in the mod­ern era, the re­gion still holds its sto­ried past close to its heart and a cer­tain rugged in­di­vid­u­al­ism per­me­ates the char­ac­ter of many peo­ple who call this their home, es­pe­cially those work­ing in the agri­cul­tural and ranch­ing sec­tors. For many, own­ing a farm or a ranch taps into deeply in­grained de­sires for free­dom, in­de­pen­dence, hav­ing open space and work­ing the land.

“Most of the large Mon­tana land own­ers love and en­joy the land,” notes Todd Phillips, bro­ker and owner of Phillips Realty, a realty firm spe­cial­is­ing in farm and ranch­land in cen­tral Mon­tana. “Buy­ers like pri­vacy, free­dom and re­cre­ation.”

Ranch­ing and farm­ing is a pre­dom­i­nant part of the ethos of the Amer­i­can West, an area that is com­prised of the west­ern­most ter­ri­tory in the United States, in­clud­ing the moun­tain­ous states of Ari­zona, Colorado, Idaho, Mon­tana, Ne­vada, New Mex­ico, Utah and Wy­oming. Rais­ing cat­tle and grow­ing crops is a way of life for many peo­ple liv­ing here and the rhythms of an agri­cul­tural lifestyle are deeply em­bed­ded in the cul­tural psy­che of the land, even for those work­ing in seem­ingly un­re­lated in­dus­tries.

These moun­tain­ous states con­tain some of the least pop­u­lated ar­eas in the con­ti­nen­tal United States, and much of the ter­ri­tory is made up of farm and ranch­land, along with un­de­vel­oped wilder­ness and pro­tected con­ser­va­tion ar­eas. Cli­mates and ecosys­tems vary greatly across the re­gion and na­ture is never far away; from grass­lands that buf­falo, coy­otes and prairie dogs call home; to deserts with hawks, lizards and taran­tu­las; to moun­tain forests with elk, cougars and even bears.

KNOW THE LINGO

Just as the Amer­i­can West has a unique cul­ture and way of life, so too does the re­gion have its own dis­tinct vo­cab­u­lary. The first step to in­vest­ing in farm or ranch­land in the re­gion is to un­der­stand the ter­mi­nol­ogy used in the prop­erty mar­ket.

Here’s a quick guide to get you started:

1. ACRE – An acre is a unit of land mea­sure­ment that’s equal to 43,560 square feet. Farm and ranch­land is tra­di­tion­ally sold by the acre in the United States, rather than by the square foot.

2. BUREAU OF LAND MAN­AGE­MENT (BLM)

– The BLM is a gov­ern­ment agency that owns and ad­min­is­ters more than 245 mil­lion acres of pub­lic land in the United States, equalling one-eighth of the over­all land­mass in the coun­try. Many larger prop­er­ties in tha are re­ferred to as BLM acres. This land can only be used for cer­tain pur­poses, such as for live­stock graz­ing, and must be leased from the BLM un­der spe­cific terms and con­di­tions. Gen­er­ally, BLM acreage can­not be de­vel­oped or used in a way that dis­rupts the nat­u­ral ecosys­tem.

3. IR­RI­GATED VS. NONIRRIGATED LAND –

Ir­ri­gated land means acreage that is wa­tered

by ar­ti­fi­cial means to sup­ple­ment nat­u­ral rain­fall. Ir­ri­ga­tion fa­cil­i­ties and equip­ment can in­clude things such as wells, pumps, canals, ditches, reser­voirs, lakes, tanks, ponds, rivers, streams and creeks. Non-ir­ri­gated land is sim­ply land that only re­ceives wa­ter through nat­u­ral rain­fall. Ir­ri­ga­tion vastly in­creases the value of land.

A con­ser­va­tion ease­ment is a re­stric­tion placed on a piece of prop­erty that pro­hibits new de­vel­op­ment with the in­ten­tion of pro­tect­ing the en­vi­ron­ment. Con­ser­va­tion ease­ments al­low own­ers to re­tain many pri­vate prop­erty rights to live on and use the land, while also pro­vid­ing sub­stan­tial tax ben­e­fits. Ac­cord­ing to Christy Bel­ton, a ranch bro­ker with Ranch Mar­ket­ing As­so­ciates who spe­cialises in moun­tain ranches, con­ser­va­tion ease­ments are “a great tool for in­vestors to have in their tool belt” be­cause of the tax ben­e­fits they en­able.

4. CON­SER­VA­TION EASE­MENT – LOW IN­VEN­TORY, END­LESS OP­TIONS

Ranch and farm prop­er­ties in the Amer­i­can West are nearly as di­verse as the re­gion it­self and can range from seven-acre parcels of dry, empty, un­de­vel­oped grass­land sell­ing for less than US$60,000, to huge moun­tain es­tates com­plete with nu­mer­ous houses, staff liv­ing quar­ters, sta­bles, ir­ri­ga­tion sys­tems, rivers and scenic over­looks that sell for more than US$100 mil­lion.

In the moun­tain state re­gion, the av­er­age price of farm and ranch prop­erty was US$1,616 per acre in 2015 – the lat­est year for which fig­ures are avail­able – ac­cord­ing to data from the United States Depart­ment of Agri­cul­ture (USDA). Kristina Nowak, a real es­tate agent who owns and runs an 80-acre farm and ranch in Agate, Colorado, says that five years ago

RIGHT The pri­vacy and cow­boy lifestyle as­so­ci­ated with ranch own­er­ship is of­ten what first at­tract buy­ers to these ex­pan­sive plots.

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