purchasing a big farm?

[apkjacks]

I would like some feedback here. i have owned a 10 stall boarding barn for over 10 years and know how that goes. you do not make any $. i do it to have people to ride with and love the horses. we do the day to day operations and of course maintain the property. we are looking at possibly purchasing a much bigger farm with 30 stalls, indoor, great turnout 5 times as much land as i have now, but only 3 times as much pasture.
what we'd like to do is to lease out the stalls to 1 or 2 trainers and let them operate their business out of the farm in exchange for a per stall fee. we would maintain the farm, ie plowing, manure removal, utilites, repairs, arena maintenance. i don't want to do the day to day work any more. we would also have our own horses there, which we would take care of.
I would love to hear from folk that have done this business arrangement. can you make a profit??? what are the plus and minuses here. i've done alot of thinking, but i want to know what we would be getting ourselves in for.
:confused:

[fivehorses]

I saw your post over on the yellow bb.
I just wanted to mention, different parts of the country as you know are extremely different.

I think its a good idea to get input, as well as ask locally.
I'd also ask myself....
Do you know any trainers who would be eager for something like this?
Could you run the place on your own without trainers income if need be?
How easy/difficult is it to get hired help(Barn maintenance, etc)?
What is your customer base like? Do you have ready and able students who will support an increased venture like this?
Ask yourself some really tough questions.
Crunch the numbers.
Of course, set this up for a business with legal and accounting help.
Good luck in your process.

[apkjacks]

fivehorses, thanks for the questions! it's definately something to seriously think about. that's why i posted! some i have thought about, but it's good to get someone else's opinion that is not involved and can look at it from a different view point.

thanks

[LauraKY]

Not too many boarding barns out there turning a profit unless they also do their own training and lessons. The boarders help pay the bills, the lessons and training are what will turn a profit (and not a very big one, at that). Might be able to at least break even, though, if you're not doing the work. The question is, will the trainers pay you enough on a per stall basis to cover the cost of purchasing a larger farm and the maintenance involved. Don't forget about electricity, water, etc. in your pricing!

[bludejavu]

I think right now you may not make it work with subleasing to a trainer due to economic factors. I have two friends who have scaled back their horse businesses and decided to sublease their barns to trainers. One barn is a 20 stall barn with indoor arena, loads of pasture - around 100 acres, outdoor riding ring and all normal amenities. They have advertised it quite a bit, even went thru a realtor, and in the last year to 14 months have had no takers. They dropped the price and dropped the price to where they would be making almost no money and still no takers. My other friend has a 26 stall barn and has pretty much all the same amenities but not quite as much pasture - it's been available for two years now at rock bottom prices and still no takers. I believe it's simply the economy affecting trainers' abilities to put themselves on the line for larger facilities.

[tle]

Another thought... while you don't want to be involved in the day to day of the horses, what will happen should you get a trainer in and their "style" of horse management does NOT match yours? Personally, THAT would make me insane enough to question the whole venture... but others may not be quite as OCD as I am. ;)

[Plumcreek]

You would have a much better chance in a metro area where you can attract horse show oriented trainers who's clients can and will pay a high enough rate that the trainers and you can make money.
A couple south of Denver built from scratch just that sort of 50 stall barn and indoor. They have 4 compatible dressage and arabian performance trainers and no single boarders. There is another one farther out that has way more difficulty filling their 100 stalls, but has a nice arrangement in that every trainer has their own tackroom and two grooming/wash stalls in an alcove and share the indoor. Again, no individual boarding.

Only exception is a reining oriented barn heavily weighted towards futurity horses. That can be a little farther out in the country, but must have the best footing and trainers in the area.

[apkjacks]

thank you all that have replied. the farm right now is full. it's a H/J training facility with one trainer who has clients. it's a well establish farm, that has always been full for years. i need to get the data on who's been there. it's in a good area fairly close to money, but far enough away to have alot of land and trails. the big question is whether a trainer would pay enough per stall, agreed. i have crunched numbers and with what i would want to get there would be a small profit for the trainer and then their lessons are on top of that, but they also need to carry liability and workman comp if they have employees, so hard to say. this will be a process that will be well thought out and researched to death before any decision is made.

please keep sending me your thoughts. i appreciate each an everyone.

[2ndyrgal]

the numbers right, unless you can steal the place, it won't work. If you crunch all the numbers on the maximum income and minimum expense, you might be able to convince yourself it will, but crunch it with the minimum income, maximum expense, subtract some for the bad economy and add up the mortgage and it won't work. Unless you have another business and need a huge tax loss for a couple of years.

[apkjacks]

thanks again for all your feedback. the farm we presently own, we have no mortgage on, so if i could make this work i am hoping to keep the purchase price close to the value of our present farm, if possible. we would be moving from a yuppy high end town to a more rural town where the home values are not as great, so i would hope we could get alot more property for the dollar. this particular farm has 80% of the land in a conservation restriction, which lowers it's value considerably. i would hope to not have a mortgage, but i maybe dreaming and that would be also a deal breaker for me. again alot to think about.
:confused:

[bludejavu]

Don't be afraid to dream! My husband and I have owned our farm for 14 years now that we never dared to even hope for. We got gosh darn lucky - the two owners ended up selling it as a distress sale and we looked long and hard for financing for a big chunk of property and finally found it, and lo' and behold, it was OURS! So I learned thru the experience to never be afraid of going after dreams. The realtor was so sure that no one would be able to purchase it that he had already put together a consortium of investors who planned to buy it and develop it - boy were they mad at us!:D

[Cloverbarley]

I'm wondering whether it would be more cost-effective for you to hire one full time worker to do all the chores for the 30 stalls/horses?

I don't know how much full care board is in your area but I imagine it is relative to employee costs?

I think you could struggle to find trainers to take over the running of the barn on a per horse basis. Have you looked at the accounts of the barn how it is run at present and is it a possibility to keep it running the same?

Many boarding stables do make profits; I suppose it depends on where you are located and how you run your barn. It's the same as running any business and seriously, anyone who runs a boarding stable and isn't making money might want to look elsewhere for their income and keep the stable as simply a means to help pay for their own horses or for companionship if that is what they want.

[KayBee]

this particular farm has 80% of the land in a conservation restriction, which lowers it's value considerably.

I'd check what restrictions those are and any impact they could have on your business. Is ag use grandfathered or does anything change when the property title changes hands?

Can't say I really know what I'm talking about but have overheard enough conversations -- people talking about trying to sell their property and how difficult it is when a portion of it is designated a wetlands or some such.

[SMF11]

I'd check what restrictions those are and any impact they could have on your business. Is ag use grandfathered or does anything change when the property title changes hands?

Can't say I really know what I'm talking about but have overheard enough conversations -- people talking about trying to sell their property and how difficult it is when a portion of it is designated a wetlands or some such.

Usually conservation easements encourage agriculture, but it is very important to actually read the easement document itself. Each one can be different, and there can be specific restrictions put in place just for that property.

We have easements on our farm, and sold off the farmhouse with 20 acres. The new owners never read the easement document itself. Luckily that wasn't a problem, but we kept back the right to put 2 apartments in the barns, and they didn't negotiate for the right to put in an apt. even though they bought one of the barns, for example. We also required that the 18th c. farmhouse be renovated in period appropriate materials. They did that on their own, but were very suprised when I told them that they were actually required to do so.