I’m trying to help a friend looking down the road at the possibility of selling their farm which has a small boarding barn. Anyone have an idea of how to value that? All contracts have a 30 day notice, but a shortage of stalls should mean most would stay if possible.
Anyone have experience with this?
Others can speak more on-point from personal experience. These are just a couple of thoughts.
First, your friend absolutely needs a horse-property-experienced realtor who knows the local horse scene, above all else. Whether or not the property sells that way in the end.
Can this property be thought of as a ‘turnkey’ board business? A new owner could just pick up the board business where the previous owner leaves off, without needing to make any changes?
That is, the new owner could make changes, even not continue the board business of course, but if they wanted to keep things as-is, no new investment by them is needed (not for the first year, anyway). No major repairs outstanding, facilities all adequate for current boarder expectations.
The property can be marketed as a rural home that happens to also have a horse board business that the new buyer can keep or terminate. OR as a turnkey board business that also has a residence for the BO. Or both. That’s a choice that your friend’s realtor can help with. It’s likely to depend on the size of the facility and how it is doing financially to earn money in excess of direct costs.
Location will be a key factor.
Good luck to the friend! 
What adds value to the property is it being in a functional, well repaired state. The presence of pre-existing boarders does not add anything to the price/value of the property.
First of all, a buyer may not intend to use the property for boarding. Trying to sell the property pigeonholed as an existing boarding business likely would limit the number of interested buyers as many people are not interested in that. Someone might look at the farm and picture a wedding venue, a donkey rescue, or a vineyard.
Even if someone was interested in boarding, they very likely would have a very different vision for what type of boarding or training business they wish to run–different discipline, different type of client, etc. They would very likely want to establish their own brand and their own name.
There also are a ton of hassles/downsides associated with a buyer with regards to taking on current clients. The buyer would need to do new contracts with the existing boarders. They would be at risk to take on poor clients–people who are argumentative or slow to pay or refuse to follow rules. It could be an uphill battle to enforce new prices and new policies–people can be extremely resistant to change. Giving notice to boarders and getting them out can be a huge, messy headache.
I speak from experience–I have purchased a farm property that housed an existing boarding business and I insisted that all client horses be removed from the farm prior to closing.
You have 2 questions here.
(1) How to price a farm with stable/boarding facilities. – The price will be based on “comparables” for similar properties in the area.
(2) How to price a boarding business. One method used to price a business is priced as a multiple of annual earnings.
Perhaps the seller’s bank can help. Here is TD Bank on pricing a business
https://www.td.com/us/en/small-business/how-to-find-value-of-your-business-and-why
I think boarding businesses are a little bit unique, and I think it could only serve to hurt the seller to offer any financial information in an attempt to add value to the property, other than details/valuations about what equipment would sell with the property.
Boarding barn business numbers can be pretty depressing. Small barns in particular typically have pretty bad numbers–it takes a certain number of horses to support full time staff and the capital investments in things like equipment and arenas. Many boarding businesses don’t “make” money. They offset the cost of the land, providing some support for what is at heart, a real estate investment.
Boarding businesses that are actually financially successful are in many cases reliant on the reputation of a key person or team of key people–a manager, owner, and/or resident trainer that has relationships with clients and is trusted by them. It’s not like a shop where the items being sold are the same no matter who is selling it. If those people are leaving at the time of the sale, the value they add leaves with them.
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