Expert Tips on Buying and Selling Horse Farms

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Credit: Photos.com Whether you look at buying a “turn-key” property that is ready to move in, a “fixer-upper” that needs varying degrees of maintenance or construction, or bare land that you build on yourself will depend on how quickly you need to be on the property and how much money you have to spend.

Credit: Photos.com Whether you look at buying a “turn-key” property that is ready to move in, a “fixer-upper” that needs varying degrees of maintenance or construction, or bare land that you build on yourself will depend on how quickly you need to be on the property and how much money you have to spend.

Spring is when people who want farms start dreaming of their own property, when farm owners who want to expand are looking for larger acreages, and when some folks have decided it’s time to move out of the country.

Whatever your situation, if you are in the market to buy or sell a horse farm or stable, there are a few things you should be aware of. Bill Justice of Justice Real Estate in Lexington, Kentucky, has been helping folks buy and sell horse farms for more than 35 years. He said while he talks to people across the country about horse properties, he is focusing his comments on Central Kentucky. However, there are some good tips from him for buyers and sellers no matter where you are located.

Where is the market for horse properties?

“I think the scales tipped and we probably leveled out in 2012,” said Justice. “In 2013 the Thoroughbred buyers started coming back into the marketplace big-time, especially high-end properties.”

He said there is still a lot of selection out there, so hasn’t gone into a seller’s market. “But the gap is changing,” he added.

He said there is still a good selection of horse properties, and it is still a little bit of a buyer’s market, but the market has improved.

Tips for Buyers

His first comment was that the type of farm you are looking to purchase will vary based on what breed and/or discipline you are involved with. “Depending on what horse breed you are in, you look for different things as a seller, and the buyers look for different things,” Justice said. “The Thoroughbred breeder, show horse stable, or Saddlebred owner all look for specific amenities.”

Obviously every buyer is different, he noted. “I think the one thing that is prevalent with any buyer is location. That is still the key in buying real estate, and it reflects over to farm real estate, also.”

The buyer (or seller) needs to look at the condition of the property, Justice advised. “If you have an older farm that’s been neglected, and the neglect is visible, you will see it in fencing and posts. But what’s not visible are things like water lines and waterers.”

Whether you look at buying a “turn-key” property that is ready to move in, a “fixer-upper” that needs varying degrees of maintenance or construction, or bare land that you build on yourself will depend on how quickly you need to be on the property and how much money you have to spend.

“Sometimes it is easier to start new than patch and repair,” said Justice.

So what properties are most in demand? “For properties that are 50 acres or less, show horse people basically have supported the Central Kentucky market during the recession and during the time frame when the Thoroughbred business was down from 2008-2012,” said Justice. “They have been continually buying.”

He said typically the 10- to 50-acre properties that are sought-after by show horse people competing at the Kentucky Horse Park are in high demand, especially if they are within 15 minutes of the Park.

“We find that they want to be minutes from the Horse Park,” said Justice. “So those properties 15 minutes from the horse park are more expensive, and there are fewer to choose from. That’s got to change because the inventory of farms that close to the Horse Park is slimmer and slimmer.”

He advised that like with the situation in Kentucky with buyers looking near the Kentucky Horse Park, if there is a highly sought-after location, go out a little farther and the availability rises and the prices decrease.

When do buyers start actively looking for horse properties?

“Starting in February we get calls from people who want to rent farms or barns for the show season, but that market is limited,” said Justice.

What should buyers expect to pay?

The smaller farm hasn’t increased in value like the larger farms did last year, but they will,” said Justice. “Once high-end properties starts moving, then the others start moving.”

Price per acre will depend on location, facilities and market demand.

When you are looking at horse farms, you need to see a variety of properties in various locations,” advised Justice.

“Your realtor should be able to show you different properties in different areas and in different price ranges,” he said. “You should want to be exposed to the entire market that fits your basic criteria.

“If you say you only want to be 15 minutes from the Horse Park, look at properties that are 25 minutes from the Park to see what you can get for your money,” he advised.

He said if you like a property that’s been neglected, “If you get it under contract, make sure you have a good property inspection done.”

One thing Justice added is that soils are more important to Thoroughbred property buyers than show horse people.

Tips for Sellers

Condition is important, stated Justice. “You’ve got to make the property as clean as possible,” he explained. “Freshen up the paint. The fences that you can see from road and driveway need to be painted and cleaned up. The property and buildings need to be fresh-looking. Spruce it up like you would do at a spring cleaning. Pay attention to barns, roofs and fences. Make them look as good in appearance as possible.”

Declutter is the key word with Justice. “You’ve got to make the farm look good,” he said. “Give it a fresh coat of pain. If you have fence boards that are down you have to tack them up. You might not replace that fence line, but you have to repair it.”

Maintenance and a fresh look is critical, he stated.

“If you go on two pieces of property that are basically the same, and one is cared for and the other isn’t, the one that is cared for will sell first,” he said.

“If the property looks good, the fence rows look good, then you feel good about that property,” added Justice. “If you have weeds everywhere, then a buyer questions everything.”

When should horse properties be “spruced up” and ready for market?

Justice said it used to be that you wanted to have horse property ready to be on the market at beginning of April. “Now we encourage owners to have it on the market the first of March.”

He said the show circuit horse owners who want to be here for spring start looking in February and March.

The farm-buying season typically ends by Thanksgiving for show horse or Thoroughbred folks, said Justice. “Obviously that changes for other locations, such as Wellington (Florida).

What are the first steps in selling a farm?

“I would suggest if they are going to sell that they should talk to realtors that have an equine background,” advised Justice. “Don’t talk to a residential realtor. Interview more than one farm realtor. Ask them about their sales. Make them give you a market analysis and a marketing proposal.

“Pricing is critical,” said Justice. You only have one chance to put the farm on the market the first time. You don’t want to “scare off” potential buyers by pricing your property too high or too low.

“That’s why we’ve been so successful; because we don’t sell houses in subdivisions,” said Justice. “And those realtors who sell houses in the subdivisions know little about 20-30 acre farms.”

Bill Justice has been in the farm real estate business for more than 35 years in Central Kentucky, although he advises on equine properties in other parts of the country. For more information visit JusticeRealEstate.net.