Potential Horse Boarding Facility / Leasing / Trainer?

Hey everyone! My wife and I just had our first child, and are looking into purchasing our first house as a family! One of the houses that caught our eye was listed for 800K, which seemed like a ton of money, however it was a beautiful house that sits on 13 acres. It also has a 70 x 100 indoor arena, 60 x 180 outdoor arena, 3 pastures with auto waterers, a 70 foot round pen, 10 stall amish barn with auto waters, a piranha fly spray system, cameras in 2 foaling stalls, and a heated tack room. My wife is a mixed animal veterinarian who specializes in horses, and I grew up on a 100+ acre farm with horses and a few other farm animals, so animals are not foreign to either of us whatsoever. It’s an absolutely beautiful property, but in order to justify paying a mortgage of roughly 3.5-4K per month, I was hoping to be able to get some return on having the facilities / amenities provided. I did some basic research into boarding horses, and I concluded that simply boarding horses alone barely breaks even, and that you need a trainer / other services provided in order to make money. I then saw someone mention the possibility of leasing out the facility to someone else, but then that entails someone running all of the operation, and there are a lot of what if scenarios that could go wrong. Another option someone suggested was paying for a trainer to come part-time, but I don’t understand what they meant by that very well, and they didn’t do a great job of explaining. Do any of you have any idea what they were trying to say?

Some important information to know: my father owns a 100+ acre farm that is 4.5 miles away from this property, and he has tractors, gators, bobcats, and every other tool / piece of machinery that would ever be required. He could potentially also harvest hay, so that it would help with operating costs. Additionally, I am in the Army and work full time as of right now, so I am busy for the most part. On the other hand, my wife and I were talking about how we could potentially open up a veterinarian clinic for her on that property. Ultimately, we love this property a LOT and there are so many possibilities with it. But at 800K where we’d have to pay 3.5-4K per month, we would need to come up with something to make some extra passive income from it so that we would have a better time affording that. Ideally, leasing the facility out to someone else would be better as we’d only have to discuss operations with 1-2 people as opposed to 6-10. It seems that a lot of the other boarding facilities in the area charge roughly 500/month for a horse also FYI.

Any and all feedback is appreciated!

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So glad you found a property you like and can (kinda sorta) afford!

A couple of questions.

  1. Have you ever run a farm, day-to-day before?

  2. Have you ever been a landlord or done any property management?

  3. Are you pre-qualified to borrow for this property as your income and downpayment stand now?

I ask because leasing a farm to a pro isn’t quite “passive income.” There’s a ton of work that goes into keeping up a farm and my advice to you is to not ask your tenant to do that, but to include those maintenance costs in your monthly rental fee to them. But that means you need to do the work or hire it out.

The reason I say this is because most trainers don’t have enough time in the day to care for the horses (which makes them no money) AND do to the training, lessons and other stuff that does actually make them their income. So you might write a lease that requires they do things like mowing or fence fixing and all, but IMO, you are setting yourself up to be disappointed.

I know you aren’t a trainer, but it helps if you know a bit about how your tenant’s profession works, too. The farm might be a tad small: 10 stalls isn’t quite enough for a showing pro to make a living. And 10 horses on 13 acres might be tight, depending on how much grass grows in your part of the country. Keeping horses on too little space is just as hard and laborious as keeping them on too much land.

How do you feel about privacy? Can you live with having people on your place at whatever hours? There’s no way for the pro to make their living without doing customer service, so you’ll end up doing a bit of that as well. If your pro doesn’t make her living via clients that own all 10 horses, then she has to be doing lessons… which means more people in and out and, by and large, a less experienced group of people around.

You might hate this business or find that it doesn’t pay you enough or consistently. But you still get the tax advantage of writing off the depreciation for the buildings and, potentially, the interest you are paying on the parts of the facility that are commercial. Figuring out how to do that from a residential mortgage is something for a good accountant who knows the horse industry. So my questions would be about whether you need a given amount of subsidy from the leasing business or whether you merely want that.

If you remember that all those people on your farm are helping you with several things-- a place to live that you like, a real estate investment and some tax advantages-- you are half-way there to figuring out how to make this work. But if you don’t really need the money and aren’t someone who wants to do some customer service while he’s on his own place, this plan will bum you out.

Hope this helps! It’s great to find a property you can afford and love in our current market. I hope you guys get everything you want.

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Hey! Thank you very much for your detailed response! I greatly appreciate the dialogue, and I am going to answer them point by point! So, I have never technically “run” a farm’s day-to-day before as my dad mostly did that and I just helped with whatever task I was given, so I do have some knowledge, but not a subject matter expert. In regards to number 2, I have not done any property management/landlording before; however, the customer service aspect of it and running a business has always been intriguing to me and I do have rather good interpersonal skills, so I think I would be able to manage with building connections! Lastly, my wife and I have not applied to be pre-approved for anything yet, so I am unsure!

As far as general upkeep / maintenance of the property, I am totally okay with knocking the majority of that out. So to hire a trainer, you essentially lease your boarding facility to the trainer for let’s say 5,000 / month (to make it an easy number to work with), and then he/she is responsible for finding clients to board their horses at the property, who will pay them lets say roughly 500/month? So then in order for the trainer to make money, they would need a facility that can host a minimum of 10 horses to break even? Am I understanding that correctly? Then the trainings, and other services they offer are extra money, or that is usually included in the 500/month they charge?

As far as privacy goes, I was hoping to operate at roughly 50-60% boarding capacity, so 5-6 horses at any given time. It seems like a lot of the competition around that area charge around 500 per horse per month, so I would assume that we would be able to ask for that, if not a little more as well since the property has some above average amenities as well as we would have a veterinarian on-site 24/7, which would give the owners some peace of mind hopefully. The thought of only having 6 horses seems intriguing also. Maybe where we offer someone local free boarding for their horse in exchange they muck the stalls, or do other labor around the facility. Then the barn would hopefully be taken care of for the most part, and the other 5 horses generate some profit to help with the monthly mortgage.

Thank you very much again for your detailed feedback, and I look forward to hearing back from you!

It seems like you are forgetting about a lot of the costs and labor that are taken on when boarding.

I guarantee you won’t find anyone to take that deal. If they charge $500/month to board 10 horses and give you all $5000 for rent, on top of that they have to buy the hay, grain, shavings, pay for labor or do it themselves (which takes time out of the more lucrative training/lessons/shows), plus insurance and possibly utilities depending on whether you are including those. This person would not be breaking even, they would already be starting out in a giant financial hole.

Again, I don’t think it’s reasonable to have one person doing all the work in exchange only for $500 worth of board. Is this person going to do all of the chores to “take care of the barn for the most part” 7 days a week? It’s a lot more than picking a few stalls. Feed (possibly also supplements and medications), turn out (possibly changing blankets and fly masks), muck (and sometimes strip stalls), clean and fill waters inside and out, do whatever other random things need done on that particular day (drag ring, pick out pastures, etc), bring in, feed again, sweep up. Even if you have a super efficient setup and they magically only take 2 hours per day, that’s a value of about $8.30/hour. You might find someone to do this for a while, but they would need to be a special unicorn to last long term. This is also assuming you or somebody else is doing the big maintenance tasks like mowing, weed whacking, fence repair, snow removal, stacking hay delivery, etc.

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If your wife is a vet, why not do specialized rehab board for clients and layups?

In my area dry stalls rent from 250-300 a month and include a place to dispose of manure and an agreed upon amount of shavings. Plus insurance and cost of fixing things cause horses and general maintenance.
I spend about 250.00 a month on pasture maintenance, but mine needs substantial work. It’s going to be fab in the spring.

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If you have never done this I can only advise you to run away. Seriously, you have no idea about the can of worms you open when you board. You might get nice caring people like myself and my friends but you could also get picky fusspots, the seriously nutz and everything in between. Caring for a whole barn of horses is hard and think of the wear and tear and damage that will be done. Not might - will. And reliable barn help is hard to find and if you do find them, they are worth their weight in gold. Oh, it sounds all fun - until it isn’t. Horse boarding is NOT a money making operation. Seriously, dig a hole, throw your money in and set it on fire.

It sounds like a lovely property!

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As mentioned above, there is a lot to this you have not addressed and probably not thought of. Firstly, zoning, make sure it is zoned as commercial/business, since you will not only be a boarding business but also a vet business (though I’m assuming your wife isn’t setting up her practice there or is she?). Secondly, the mortgage, make sure they know you are using the property for a business (or two). Insurance, home, business, liability. Sit down and break down all your costs, mortgage, insurance, utilities, maintenance, feed, hay, etc. If you don’t know what the costs are going to be ask around and then make them slightly higher. Understand that a boarding barn means you will have people on your property a lot, is privacy an issue? Be realistic about just how much money you will be making from the boarding business, there are many threads that address this and most will read that you don’t make that much, some will say you will only cover your costs (feed, hay, labor) and a little profit; don’t count on it to pay your mortgage, especially if you consider that you will have to always have someone boarding to pay bills, what happens when you have some empty stalls?

Search thru previous threads on just this subject, there have been plenty just like you’ve posted, the advice is always the same.

My advice, if you can’t afford the mortgage outright without the need for boarding then you should rethink this.

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The first piece of research you might do is to look for the “dry stall” rate being charged in your area. “Dry stall” means just the stall and access to facilities-- no materials or labor.

Also, barn and farm labor is notoriously underpaid and therefore hard to keep. That changes if you are a bigger facility that can give someone a full time job with a legit salary. If I were you, I’d keep entirely out of the mess of supplying the day-to-day labor of cleaning stalls. If you don’t mind supplying equipment, even put the pro in charge of maintaining the arenas. The trainer will know how they like the footing to be. But the rest of it should be done and managed by you, to your specifications. Let the pro grapple with the problem of getting daily stall cleaning, getting that done the way he wants it and making the numbers work out.

That said, there’s a limit to how much that pro can charge for boarding… which means there’s a limit to what she can pay you per stall. To put it another way, when you offer your farm for lease, you are competing with any other farm in the area, so you need to know the dry stall rate for your location.

So, if I understand you right, your math doesn’t have the pro break even, but be under water. If your dry stall fee is $5000/month, they still have to pay for materials and labor on top of that. If full board (or whatever version of board gets done) in your area is $500/month, your pro will not be able to compete with that.

Full training is generally around the price of board. So remember that the clients in the area who will pay the pro who can afford to pay you are wealthy enough that they are paying double per month what all those boarders are.

A trainer might be tempted to lower her training rates to fill the stalls she has to pay for. But if your rates force her to make the board portion of her clients’ bill too high, it will be unsustainable for her.

But! Lots of boarding barns (and perhaps you) don’t want to lease a block of stalls to a pro. They perhaps worry about what happens when 10 stalls of income leave at once versus when the 1 stall of one boarder leaves.

In some areas, pros are looking hard for barns that are right for their businesses. If yours is a nice facility (and the rings, plus the quality of their footing will matter here) with a great location, they’ll be at your door. With a facility as small as yours, I’d try to lease it to one pro rather than two since they might have a hard time sharing the limited space.

Some of this will depend on the size business those pros are running. If you aren’t an established, full-time trainer with, say 15 or 20 stalls, the smaller business that works for them might be 10 or 5 stalls. The training business has changed a lot since the last recession, so you can find more small-time pros who want to base their businesses out of other peoples’ farms.

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Do you either currently own horses or have some other near-term personal goals that owning a purpose built horse property is a necessary condition to achieve? How much $ do you need to pull out of the property per month to make the mortgage? Do you really want to be yeeting your butt the 9 miles round trip to your father’s house every. time. you. need. to. bushhog to pick up the tractor?? Lastly, what would the total cash outlay per month, including interest, taxes, escrow, etc be?

Maybe a little off topic – Idk it’s a byproduct of having lived my whole life in a HCOL area or I’m just clueless, but I’ve never understood the logic espoused by most of the personal finance world that: a) a mortgage is sooooo much less than renting, and b) talking about mortgages as = only the estimated principal to support that. It has always seemed like dangerous advice to me. The interest, taxes, etc above the principal aren’t optional & can easily double or triple your monthly mortgage bill. To give you an idea, my total monthly out the door to the lender for my $450k farm was $3000.

The upkeep on a facility like the one you’re considering is eye-watering. The farm where my trainer rents the barns & other horse infrastructure is gorgeous & immaculately maintained. Trainer is responsible for mowing the pastures using the farm’s equipment . The farm owner takes care of the physical plant expenses for the buildings & maintaing common areas. I was paying $700-800 a month to have a landscaping service mow & trim an acre. At this farm it literally takes 4 men with zero turns & weed eaters all working simultaneously 6-8 hours to mow & trim the common areas. Unless the farm owner has some insane deal worked out, that’s got to be costing $2000+ a month. Easily. And the average market rate for dry stalls in this area is about $150-250 each per month. Board about $750- $950. Trainers with a reputation for taking good care of a rental & having pleasant clientele in this area usually aren’t pressed for options, either, and command terms that are advantageous for them.

If you only needed a few 100 bucks extra a month to help defray the mortgage I suppose you could rent the indoor arena out to trailer ins. But unless you & your wife love to ride with a “I will die if I go a day without horses” passion, why even bother? The upkeep on horse facilities is high, the ROI when you sell is nonexistent, and it’s harder to find a buyer. If your goal is a pretty piece of country to call home with a tax break for ag use, buy a property with open fields & hay it or rent it to someone to run cattle on.

Eta: Plus you have a new baby. Depending on your work schedules, division of domestic labor, & childcare situation, a boarding barn can be a source of considerable strain. Horse care is an unrelenting job. Keeping a small human alive without compromising your sanity or marriage is, too. Owning a boarding barn & being a parent can mean finally getting a colicky baby to sleep at 2:15am onky to be woken up at 3am by a sheriff’s deputy pounding on the door to inform you that the fence is broken & the horses are running on the road. It means spending your day off on a tractor instead of taking that fun family outing. It’s hard even for couples for whom horses are a driving passion for both partners. Personally, I can’t imagine signing up for it as an incidental way of making extra income though.

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I think that you have had great advice here already.
Depending on “boarding horses” to “make money” is a very difficult plan.
I think the only option here is to use the place in your wife’s veterinary business… this has been successful for others. It will require hiring staff to do the barn work, but what you can charge your clients for this service has at least a chance of covering expenses. Turn it into a vet clinic, and run it as such. If this is allowed in this area.
Otherwise, it is just a rich person’s pet barn, to keep their own personal horses in and enjoy.

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I guess my questions would be:

  1. Is your wife an experienced horse vet?

  2. Is she a partner in her current practice or just a vet hired on?

  3. If she starts her own practice at the farm will she have a decent client base come with her and where does the money to equip a new vet practice with all the things it needs come from?

Honestly( to me) it seems like finding a good , established trainer to lease out a number of stalls and getting a portion of your mortgage paid is your best bet. If your facility could be used for clinics or day shows there is another source of potential revenue.

If you father could commit to supplying good quality hay from his farm that a trainer could purchase that may help a lot in finding a decent prospect.

No matter what If you can’t cover the mortgage on the 2 combined salaries alone it is incredibly risky.

These two, in spades:

I don’t board and probably won’t, barring an exceptional person. But I work FT and do this alone, which I’m going to say is similar to a couple with a baby because 1. it makes sense that really only one person is available and 2. I don’t have a baby so I may be talking out of my ass and 3. it goes along with what I’m saying next. I do it alone, nine acres, about a third of which I don’t to actively manage because it’s in hay. The rest is on ME to mow, weedeat, drag, sweep, muck, scoop, scrub, refill, check for holes and wasp nests and do regular but not daily stuff like take down the lights in the barn and clean them, de-cobweb, keep tabs on meds and supps and feed for four horses, the farrier, the vet… Sure about once a month I can ask my Dad to run an errand (please dump the manure trailer for me today while I’m sleeping because I’m on night shift but the paddock mucker guy is coming tomorrow, or pick up feed, or take my dog to the groomer). And it only takes one thing to send it sideways, like coming out to a lame horse or a horse with a goopy eye (tonight, thanks baby horse), much less a nasty colic or a nasty injury. I have literally started crying when a horse has come in “off” on a day when I worked 14 hours at work, come home and remind myself to mow this weekend if it please doesn’t rain before I have laminitic horses and/or become “that” neighbor, and the house is a mess and I need to do laundry because apparently clean underwear is neat but so is more than 5.5 hours of sleep… Anyway, this post below sums it up.

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This was going to be my suggestion!

However, have you looked at the AG exemptions in your jurisdiction? Especially on small average it can be hard to meet the requirements… and then there goes your tax break, I ixnayed a property (that the realtor claimed was Ag) for that reason. No way could I have met the requirements… especially as in NJ the rules are stupid when it comes to horses and value.

Sorry if someone mentioned, but that killed my dream outright. And I pay crazy stupid NYC rent!

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Even with today’s low interest rates, that sounds optimistic

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