8 acres to 20 acres...Perspectives please

[ISitWithIt]

I currently own an 8 acre farm that has:

House (that I don’t love and is way too big for me)
4 stall barn with tack room (electric, cold hose access only)
8 pastures for rotational grazing
80x180 outdoor ring.

I’m trying to estimate the additional operating costs of moving to a 20 acre farm with

A house (still don’t love it but smaller with more renovation potential)
15 stall barn (electric, plumbing: hot/cold water and bathroom)
4 huge pastures and 2 smaller paddocks (majority of the property is fenced pastures)
100x180 outdoor ring
100x200 indoor ring with attached barn -5 stalls, wash stall with hot and cold water and tack room

Assuming I don’t add more horses (fat chance but let’s assume), where would increases or the largest increases in my operating costs come from?

Big decision and any thoughts are much appreciated!

[SusanO]

Property taxes in my neck of the woods are extremely low but that is not true in most parts of the US. You might compare taxes on both properties. Bigger pastures have a lot of advantages but your mowing and fence maintenance would be more on the bigger parcel. Are you planning on using the new property as a boarding operation? That brings on a whole new can of worms.

[2DogsFarm]

If possible, could you make hay on some of that acreage?
Around here it’s not uncommon for people to lease fields to those with the ($$$) equipment.
Some ask for part of the proceeds from sale of hay, some barter for hay they need.
Until this year, & for the last 5, a neighbor cut & baled my ~2ac L-shaped field that borders my pastures. I let him keep the hay off it.
In return, he provided hay for me at bargain-basement prices or free.
Besides the hay, it kept my acreage looking civilized
This year a BIL of his cut & baled rounds & is paying me in 20 small squares.

[B_and_B]

Here is my immediate reaction: property taxes on those buildings? But, more importantly: that 15 stall barn and the massive indoor with stalls attached? Those are liabilities. Can you afford to fix the roof on both of them? Can you fix the issues with siding, stall walls, or other things on that many spaces? Can you afford the footing maintenance of two arenas? Can you afford to maintain the bathroom, and the hot and cold water in the indoor?
Maintenance, Maintenance, Maintenance. Every single building is a sunk cost. If you don’t maintain it, you have bought it but thrown it out.
Do you have the equipment for it? Or the cash?
Sorry, but buildings, ALL buildings, burn money.

[PaddockWood]

And on the other hand…tell us more. What might you do with 15 stalls? What equipment do you have already? Do you have a DH or other handyman who can do most everything?
What is the fencing at the new place? What is the footing like? Would an indoor really help you ride more? Do you work away from home? Do you have time and do you have money?

We have 26 acres and it’s a lot of work. Either you work hard or you have money to burn. We also have an indoor and that is truly a luxury where we are - cold winters, hot summers, biting bugs in the summer.

[luvmyhackney]

Wouldn’t be cost per say but the equipment needed to maintain the property and finding help to maintain the property, lime, seed, fertilizer, etc… Plus fencing is $$ to replace and footing costs for rings. Footing doesn’t last forever.

Insurance and property taxes are all rising.

[ISitWithIt]

This is so helpful! Here is some more information:

Taxes: Shockingly, my tax bill would decrease from $16,250 to $8,700 as currently assessed.

Labor: No DH but I have a live in farmhand who does all pasture mowing and cleaning, fence & building maintenance as well as general landscaping. I also have an incredible barn assistant who helps with the horse care 5/7 nights a week in exchange for riding time and I pay for her lessons with our trainer. Both would come with me.

Buildings & Maintenance: I’m having an inspection done on the property tomorrow to assess the current infrastructure. I do know from disclosures that all major systems (HVAC, Hot Water Heaters) are less than five years old. The barn and indoor with the attached barn are less than 20 years old and have been well maintained but we’ll see what the inspector says tomorrow. No doubt they will require maintenance and repairs in the future and that’s an excellent point made!

Equipment: Currently I have an atv & little trailer I use with it, a nice arena drag, 7 hay huts that would come with me and everything from my fully functioning barn. The property conveys with a tractor, 2 bush hogs, 2 rakes, a bale spear, spreader and a riding mower.

What would I do with 15 stalls I am not planning on running a boarding operation. Would possibly board aforementioned barn assistant’s horse should she decide to get one of her own. I would most likely max out at ten horses so could use some of the land for hay. I am currently licensed as a lesson barn and sanctuary so would continue my small lesson program and educational events.

Two expenses I already know I’d have sooner rather than later is replacing the footing in both arenas and most of the fencing. Both are sand mixes that look like they need a lot of love and not my preferred footing regardless. The fencing is adequate but old and I’d feel a whole lot more comfortable with my two tb/perch mares being in pastures with way more sturdy and higher fences (even though I have yet to have an issue and could run electric-which they respect but one is still a baby and she’s a ding dong)

An indoor would help me ride more or really help my lesson kids and my own kids ride more. I ride a decent amount but during the winter, my kids don’t even get home from school until 4:30 pm and with no lights, it was dark by the time they were tacked up. Like many parts of the country, we’ve had a pretty brutal summer. Right now, I have to run all my lessons before 9:30 am when we lose all shade in my outdoor or after 6 pm when the heat starts to abate (slightly). If we had shade or lights, we would have more flexibility and get to ride year round more comfortably.

My lessons and non-profit work is on the side so my main job is in sales and I do fairly well. Not a millionaire by any stretch of the imagination. I do work from home and have a flexible schedule. It’s the kind of job where I work and then wait for responses so a typical day has me with the horses from 6-8 am, kids to school and work from 8-11am, farm chores for the next few hours, work some more then kids (usually riding with them) or evening horse care depending on the day. So, while I don’t have money to burn, I have some and I am an incredibly hard worker who luckily doesn’t need much sleep and thrives on staying busy

While there would be more buildings and land, one thing that’s a calculation for me is the actual house I’d live in. Current house is a dark, badly placed, 8,000 sq ft mess of additions, cheap materials and cheap fixes that I’ve been slowly trying to improve since I’ve owned it. Not sure if I could ever make it mine or something I love living in. It’s so big and so weird. New house is smaller and actually has renovation potential. It could be a house that I love. Plus…it has amazing sunlight.

[HPFarmette]

Better house and bigger pastures sound great.

[Texarkana]

@B_and_B

Here is my immediate reaction: property taxes on those buildings? But, more importantly: that 15 stall barn and the massive indoor with stalls attached? Those are liabilities. Can you afford to fix the roof on both of them? Can you fix the issues with siding, stall walls, or other things on that many spaces? Can you afford the footing maintenance of two arenas? Can you afford to maintain the bathroom, and the hot and cold water in the indoor?
Maintenance, Maintenance, Maintenance. Every single building is a sunk cost. If you don’t maintain it, you have bought it but thrown it out.
Do you have the equipment for it? Or the cash?
Sorry, but buildings, ALL buildings, burn money.

This was my immediate thought. And if you aren’t using all of those 20 stalls, they just collect spiderwebs, dust, and vermin who create nearly as much work as having a horse in there.

When we moved back to Maryland, I was offered a very similar situation: a great deal on a BIG property, way more than we needed, with an aging older barn, aging indoor, and far more land than we needed, all fenced in paddocks and pastures. It was only slightly over our budget. Yet all I could envision was never-ending maintenance.

[beowulf]

@ISitWithIt

Taxes : Shockingly, my tax bill would decrease from $16,250 to $8,700 as currently assessed.

How is this possible? Is this in the same state, is this property in Chapter?

[SusanO]

Maybe the 8000 square foot house in property #1 is running up the tax assessment. At least in my stretch of the woods barns do not add much to a property assessment. But I am in the backwoods so the rest of the country is most likely different. Alabama has the large out of state timber holders and farmer lobby to keep taxes at a minimum on rural farm properties. Maybe her state has some of those interests holding down assessments on rural properties.

[clanter]

@beowulf

How is this possible?

here ten acres and above can qualify for ag exemptions, I would think other states have similar restrictions Also our property taxes are calculated at the county level not state wide.

We are less than ten and our pastures are appraised at over $100,000 per acre

[PaddockWood]

@ISitWithIt Wow. Saving $7550/yr in taxes right to start and you can plow that into footing and fence. It sounded like you know exactly what you’re getting into, you’re a hard worker with lots of good help. It’s a no brainer to me. I vote YES!

Hope the inspection goes well and please let us know what happens

[beowulf]

@clanter

here ten acres and above can qualify for ag exemptions, I would think other states have similar restrictions Also our property taxes are calculated at the county level not state wide.

We are less than ten and our pastures are appraised at over $100,000 per acre

Yes, that’s what Chapter is and is why I asked if it was in Chapter. Each state has a different term for it but the goals are fundamentally the same: give farmers, horticulturists, and forestry land owners a significant (up to 75% reduced value) tax break. In my area, an acre’s value depends on the land neighborhood with the average being about ~$350,000 - but if you are near the lake, expect to pay $700,000+ per acre.

I’d be curious to see what the land, buildings, and outbuildings are assessed for. The good thing is, most assessors don’t know how much an indoor is really worth - so it is usually taxed as an outbuilding and depreciates rather fast (AKA, loses assessed value rapidly). It sounds like this property may be in chapter or, OP is in the city and this property is way out in a different district. The yearly taxes she quoted for her 8 acre farm make me think she must be in a high value area. That’s about what you would expect to pay tax-wise for a farmette with some improvements in my area.

@SusanO

Maybe the 8000 square foot house in property #1 is running up the tax assessment. At least in my stretch of the woods barns do not add much to a property assessment. But I am in the backwoods so the rest of the country is most likely different. Alabama has the large out of state timber holders and farmer lobby to keep taxes at a minimum on rural farm properties. Maybe her state has some of those interests holding down assessments on rural properties.

It could be. An 8,000 sq ft house is massive by most state standards. It’s likely driving a significant portion of her taxable value. Primary residences on a lot are assessed at different rates than an outbuilding, shed, or barn, like you pointed out. Most states would not assess a secondary structure with the same base rates (for value) that they assess a primary structure. Though these are enormous capital improvements from the owner’s perspective, outbuildings, sheds, fences, and barns don’t often add significant assessed value unless they are very big, or the Assessor has enough sales that really delineates their values.

It sounds like it might be a good deal for OP to pursue, but if the land is in Chapter, you will need to know more about the program, and you will likely need to refile every year depending on state. Whether it is worth it for you, depends on your own personal risk and financial tolerance. No one can say “yes this is worth it” but you. It sounds like a big change, that will come with its own endless maintenance. Being the owner of a farm already, you know that there is always something needing done, always new maintenance problems, etc – but it may be it is worth it to you, if you’d like to see your program grow.

[endlessclimb]

God that monstrosity of a house ALONE would send me to the 20 acres. I vote YES.

[trubandloki]

@beowulf

Though these are enormous capital improvements from the owner’s perspective, outbuildings, sheds, fences, and barns don’t often add significant assessed value unless they are very big, or the Assessor has enough sales that really delineates their values.

If only all property tax assessors believed your generalization and followed it.

@beowulf

Yes, that’s what Chapter is and is why I asked if it was in Chapter.

Thank you for clarifying what this meant. Google was not coming up with anything along those lines at all.

Where I live, simply having acreage, agricultural zoning and all that does not mean you qualify for an agricultural exemption.

[beowulf]

They may just have the sales to back it up. Some townships or counties are steeped in horse country but the average Assessor probably has very little agriculture (horse barn, dairy barn, etc) experience. Some hire out Appraisal contractors who pull sales from a broad range of towns, but contractors are prohibitively expensive for most small towns. Every state does it differently too. In my state, when a new outbuilding goes up you generally make the RCLD (replacement cost less depreciation) proportionate to what the building permit was – but the depreciation schedule for outbuildings is steep compared to houses. So they lose “value” rapidly and at 20 years of age the indoor and barn in OP’s post are probably significantly depreciated… if the Assessors are following procedure.

@trubandloki

Where I live, simply having acreage, agricultural zoning and all that does not mean you qualify for an agricultural exemption.

This is true here too. Chapter (Also called Chapter 61) has a lot of rules you need to follow. You need to demonstrate that you are farming/using every acre listed, and you need to also provide proof of revenue from these products via tax returns if filing for the Agricultural/Horticultural Chapter (61A). You need 5 acres minimum for agriculture (61A), and at least $500 in yearly sales. That number goes up as the acreage goes up, depending on what you grow and how you filed. Most horse barns file for 61B (Recreation) since boarding is not considered a ‘product’. Unfortunately 61B does not give as significant a tax reduction as 61A.

[Equibrit]

Depending on where you live you may be able to take advantage on tax exemptions on the larger acreage.

[Christa_P]

Smaller house and possibly changing towns or counties. I my area, if I were one county north my taxes would be much higher.

[lenapesadie]

That’s a lot of additional mowing.

I’d be less concerned about maintaining additional stalls and much more concerned about the extra mowing.

It’s entirely possible my reaction is due to where I live (hot, wet climate plus Bahia = need to mow every third day) and YMMV greatly.