Why stall boarding rates need to at least double across the Midwest

[Lucassb]

I think boarding has always been a difficult business, but - as illustrated very well by mvp above - there is a very challenging dynamic that includes rising costs for land and infrastructure as well as perhaps different client expectations now as well.

In any case, though, the basic rules of supply and demand apply to this business just as they do to others, particularly for those that revolve around the way people spend discretionary income.

In my area, boarding at a facility that offers nice facilities and good care run by competent professional horsemen will run at least $1000/mo. There are very, very few that allow boarding only (without lessons/training packages.) That is simply the market rate for a place with certain amenities (turnout, indoor, excellent footing, etc.)

I haven’t owned horse property in this area so it’s hard for me to say for sure whether or not that is a profitable rate for the owners of those facilities. Given the dearth of boarding-only options, though, I am guessing that the margins are quite slim, and are thus bolstered by the requirement for lessons and training that most barns insist upon. With respect to the question posed above:

I have been told the way a barn makes its money is through training and selling horses. But let me get this straight : I have to take the money I make from training and selling horses in order to buy a new indoor arena for the clients that pay essentially nothing?

I can understand why you would see the situation that way, but I’d encourage you to also consider whether or not that indoor is an amenity that is expected or required in your market in order to attract clients who will pay for not only boarding, but also sales and training services. If you lose money on your boarding only clients, perhaps consider not offering boarding as a stand alone service, as so many other barns have done. Unless you are using boarding income as a cash flow device - and many do it to help with the expense of personally owned horses, or to help justify infrastructure they want but could not justify for only their personal needs - then running a service that generates no revenue is a tough one to persist with.

Of course, the other aspect to consider when addressing pricing is that key component of what the market will (can) bear. If you raise your prices to the point that the pool of potential customers is too small to support your business, that is obviously going to be a problem as well. (And the reality is that there are areas where certain types of facilities are perhaps simply not viable for that reason.)

[vineyridge]

Down here in self care with no fixed labor expenses, per horse:
Hay–1 round bale per month of good quality horse hay–$40-$50
Feed–3 bags per horse per month–$7.50-$15 per bag
Worming-$10 per horse every other month.
Shavings are $3.50-$5 per bag.

If we assume minimum wage for barn workers, that would probably work out to about $10 per hour with SS and unemployment tax. Labor costs would depend on how many hours are allocated to each horse.

Vet, farrier are separate expenses and have nothing to do with boarding costs.

The problem for BO is explaining to boarders just why it costs so much more than basic feed costs. That the cost of the facility and its taxes must be apportioned to each horse.

[TrotTrotPumpkn]

$1,000??

Maybe for a heated indoor with multiple rings, outdoor hacking, and access to FEI instruction.

Sorry, I disagree. Not that board needs to go up (I just saw $200 a month indoor board offered in MN somehwere–that’s crazy), but not to $1,000 a month. Personally, I prefer field board, and the bonus is no bedding to mess with and a lot less labor. I am also in the $110 a ton (the average right now) hay world (paid $145 last year and will probably pay $130 this year, which includes delivery, on very nice small square hay). $1,000 a month is more than I spend in 12 months feeding one horse at home (including spraying, mowing and fertilizing my pasture). Boarding barns in my area do not include grain or wormer in their rates, so that is a wash either way. I can build my own $20,000 ring for less than two years board on one horse at your proposed rates. Typical stall board here is around $350-$450, btw. I think most BOs get their labor by boarding someone’s horse for free in exchange.

Land around me sells for 8,000-$15,000 an acre. I have no idea what it is on the coast, or suburban Chicago. That is obviously a huge consideration in addition to hay.

I don’t think your home mortgage should be part of the equation. I don’t get to count that in my business either. Work site (barn, acreage, fencing, etc.) but not the house.

Property taxes are less for me in the country than in town and my current house is assessed at $70,000 higher than our house in town was (just because it is newer). I don’t have to pay the township tax. Ag is taxed at a lesser rate. The biggest thing that has hit me is that utilities are much higher in the country (propane vs. natural gas, etc.).

I’ve noticed the barns with crappy footing that barely feed the horses get the same board rate as ones that do a better job or have very small indoor arenas. A heated indoor/stall barn is more like $600 here (I only quoted cold barns above). It would be interesting to see cost-wise how that works out for the owner–much, much more expensive to build and operate.

[Mosey_2003]

$400 would be exorbitant here :lol:

[Casey09]

I don’t think it really matters which part of the mortgage is included or not included. It’s a business. Pricing should be determined by market analysis for what is competitive for a particular market. Then it is up to the owner to decide whether or not it is a viable business or not. If the barn owner can make be successful including a part of their home mortgage in the cost of board, then that would be fine with me. However, that isn’t how businesses determine pricing. Pricing comes from a market analysis because even if customers see an apportionment of costs system as fair, they won’t pay more because one barn’s mortgage is higher than another’s. Customers will only pay more for better amenities or better service.

[trubandloki]

I am willing to agree that it is reasonable that the cost of the house itself does not count as an expense, but the cost of the land and farm structures are part of the expense, and the taxes associated with them.
And since you (general you) are saying that the mortgage does not count then we have to make sure we add in labor costs, for the barn owner, so they can pay their mortgage out of their own pocket.

Field board is only tons less work and money if it is the type of field board that the paddocks are never picked and the horses are not fed individually and given a look over daily.

[QUOTE=Casey09;8280836]
I don’t think it really matters which part of the mortgage is included or not included. It’s a business. Pricing should be determined by market analysis for what is competitive for a particular market. Then it is up to the owner to decide whether or not it is a viable business or not. If the barn owner can make be successful including a part of their home mortgage in the cost of board, then that would be fine with me. However, that isn’t how businesses determine pricing. Pricing comes from a market analysis because even if customers see an apportionment of costs system as fair, they won’t pay more because one barn’s mortgage is higher than another’s. Customers will only pay more for better amenities or better service.[/QUOTE]
Yes, but this misses the whole point of the thread.
Boarding is getting to the point that to meet what people are willing to pay the barn owner is losing money.
Which means sooner than later there will be no boarding facilities.

[TrotTrotPumpkn]

What I’m saying is you can’t include the home mortgage and say you aren’t breaking even.

Yes, how you price is separate.

I looked at opening a boarding barn a few years ago and it was cost prohibitive with the land prices close to town. The only way to break even (if I hired labor) was to have about 30 stalls too…

I decided to just buy my own place. Conveniently my horse goes into her matted shed to poop in the corner and I can shovel it out daily (with no bedding) in about ten minutes. So my labor is pretty low AND I do pick up the poop! But I digress.

How do we make $500 a month board sustainable? Do you think it will all go to self-care (yuck)?

[AmarachAcres]

A farm is for sale near me.

500k

30 stalls, indoor arena, heated tack, hot water wash stalls, turn out, access to hundreds of acres of trail. 55 acres.

It also has two homes and a shop on the property.

It estimates the mortgage at $1,844/mo.

Seriously, I pay that for my place.

Shavings, let’s say at 5 a bag and two bags a week per stall, worst case all year round: 1500 a month.

A 60# bale feeds 3 horses per day. I can get those if I buy early at 4/5 a bale. So we will go with 5. So for 30 horses that is 10 bales a day, 300 a month: 1500

Monthly cost of the tractor/bush hog + fuel: 450

Spreader is about 3k for a good one, to spread that horse poo on your fields. That would be paid off quick but we will add it on that first year. So monthly you are talking 250.00

This one even has a second home, so you can rent that out in exchange for labor. Many many farms have that.

Most farms and this one have well water. Electricity is say 200.00 a month.

Then you have farm/liability insurance: This varies a ton. I’m going to go with 2k a year. 416.67 a month.

We are currently at: 5960.67

Now, these are average set costs per month. Not including repairs for stalls, fencing, etc… Let’s tack on 500 a month for that stuff.

Now we are at 6460.67

Leaving off feed. To me, feed is so personal per horse that I just will, for our hypothetical, leave that to the owners.

So what is 6460.67 divided by 30 horses? (we will pretend you don’t have your own horse stalled)

215.35.

So even if we had in another 2k of costs I’m not thinking of, PER MONTH: that is 66 extra per horse. So now 275.35. Toss on that profit margin and bump it up 100, or 150. (Again, your house and utilities are already being paid for, which are the reasons most people work in the first place)

$425.00

This number is how a lot of boarding owners I know go with the magical $500.00 and up. You should be allowed to make profit and have have money left over. So an extra 150 per horse on top of costs is 4500.00 extra per month.

Now, this farm price is NOT average but there were plenty of stables in the midwest for sale around that price when I lived there. I have friends who own boarding barns and do just fine financially while taking great care of their property.

That isn’t even counting the profit of lessons, trainers leasing, people paying to haul in, etc…

It also doesn’t include labor. So let’s do that. Even if you pay someone 2k a month that raises the board another 66. That is NO WHERE near 1k.

Tell me how you get to 1 K for the boarders with this farm or others that I KNOW exist in the same price point in the midwest. (non east coasters.)

http://www.zillow.com/homedetails/29303-NE-Timmen-Rd-Ridgefield-WA-98642/23323995_zpid/

[Lucassb]

[QUOTE=TrotTrotPumpkn;8280797]
$1,000??

Maybe for a heated indoor with multiple rings, outdoor hacking, and access to FEI instruction.

Sorry, I disagree. Not that board needs to go up (I just saw $200 a month indoor board offered in MN somehwere–that’s crazy), but not to $1,000 a month. Personally, I prefer field board, and the bonus is no bedding to mess with and a lot less labor. I am also in the $110 a ton (the average right now) hay world (paid $145 last year and will probably pay $130 this year, which includes delivery, on very nice small square hay). $1,000 a month is more than I spend in 12 months feeding one horse at home (including spraying, mowing and fertilizing my pasture). Boarding barns in my area do not include grain or wormer in their rates, so that is a wash either way. I can build my own $20,000 ring for less than two years board on one horse at your proposed rates. Typical stall board here is around $350-$450, btw. I think most BOs get their labor by boarding someone’s horse for free in exchange.

Land around me sells for 8,000-$15,000 an acre. I have no idea what it is on the coast, or suburban Chicago. That is obviously a huge consideration in addition to hay.

I don’t think your home mortgage should be part of the equation. I don’t get to count that in my business either. Work site (barn, acreage, fencing, etc.) but not the house.

Property taxes are less for me in the country than in town and my current house is assessed at $70,000 higher than our house in town was (just because it is newer). I don’t have to pay the township tax. Ag is taxed at a lesser rate. The biggest thing that has hit me is that utilities are much higher in the country (propane vs. natural gas, etc.).

I’ve noticed the barns with crappy footing that barely feed the horses get the same board rate as ones that do a better job or have very small indoor arenas. A heated indoor/stall barn is more like $600 here (I only quoted cold barns above). It would be interesting to see cost-wise how that works out for the owner–much, much more expensive to build and operate.[/QUOTE]

Obviously the market price depends a lot on geography. Where I live now (in the southeast) that is the going rate. When I lived in the northeast, I paid quite a bit more, (without a heated indoor, LOL… which I would have paid a LOT more to have!) Many of my friends in the midwest and southwest pay a lot less. (Other economic factors vary a lot as well, of course… housing/salaries etc.)

There is also the issue of what sort of clients a barn owner wants to attract. Riders who will train/show/buy horses? Those who want full training? Pleasure/recreational riders? Are outside trainers (vets, farriers etc) allowed? Are there other amenities (trailer parking, for example) that might influence customer choices?

[TrotTrotPumpkn]

I need to move to Washington State. That place would be over a million (and with a rental!). The bare, unimproved land alone here in SE South Dakota would be over $550,000 most likely.

[MustangSavvy]

I can’t imagine paying 500 a month, let alone a 1,000. I moved to the PNW from CO a year ago and at really nice facilities you could see 650 for full care indoor board, but these were NICE barns. I mean heated stalls, two outdoors, heated indoor, etc!

Here in the PNW I pay 300 a month for full care indoor board at a very nice facility.

[FineAlready]

[QUOTE=HorseCzar;8280317]
After offering stall boarding for up to 16 boarders, I have come to one conclusion : The stall boarding industry is broken - at least in my city. My rates per month are competitive with the rest of the city barns at about $500/month. After buying hay, water, shavings, labor, mortgage, utilities, etc. I make $0 profit. This seems to be the same story for MANY boarding barns. How is this an acceptable standard in the industry? How is a barn to make improvements, pay the owners, provide good care? The stall boarders are staying at these barns essentially for free. For the amount of work, complaints, and overtime hours for the horses care, the requested additions (like bigger indoor arena, bigger turnouts, etc) how is this sustainable?

I used to look at old barns and think " why don’t they improve XY and Z?" the truth is, it’s unaffordable!

I have been told the way a barn makes its money is through training and selling horses. But let me get this straight : I have to take the money I make from training and selling horses in order to buy a new indoor arena for the clients that pay essentially nothing?

Horse boarding should be at minimum, $1000/month across the Midwest. I don’t see how stall boarding can sustain itself.

I’m Probably the only one that feels this way, but I’d like to know your thoughts![/QUOTE]

Unless you are intimately familiar with the entire Midwest, it’s pretty crazy to say that board should be “at minimum, $1000/month across the Midwest.” I have lived in the three largest cities in Wisconsin (Milwaukee, Madison, and Green Bay), and the property prices varied considerably between them. Property is downright cheap in more rural locations, especially in the far Northwest part of the state. The more rural areas in Wisconsin would never support a $1,000/month board rate - not in a million years! That’s at the top of the range even for the Milwaukee area. $500 is at the low end of the range for the Milwaukee area. Most good places are somewhere between $500 and $1000. There are a few below $500, and the care is generally quite poor unless it is a small private facility.

In the Chicago area, where I have also lived, board was $1,000 up at most large facilities.

I can’t speak to other parts of “the Midwest” because I’ve never lived in them. But a blanket statement that board should be at least $1,000 is obviously unsupportable, even for just ONE state in the Midwest (Wisconsin).

[PaperPony]

Maybe not quite Mid-west, but NW Arkansas near Missouri:

$500/month sounds awesome. When I started out boarding horses I charged $175/horse/month, but boarders had to buy their own grain and I only offered field board. No indoor, crappy outdoor ring, jump field. Of course whenever the weather was bad I usually brought horses in anyway, did blankets, etc. Finally “raised” my price to $250/month including feed.

Recently built and moved to new facility, still no indoor, outdoor pasture board with shelters, still end up bringing horses in a lot during severe weather. Charge $300 a month and am considered on the high side for the area, but can get away with it because I have huge beautiful fields with safe fencing and feed very high-quality grain 2x Day and do lots of extras like blanketing, medication, etc. Boarders are supposed to provide their own bedding and clean stall if they leave their horse in, but this has almost never happened. Recently cut down on number of boarders/students due to drama/stress etc, but am making more money now if I consider my time worth anything and there’s less damage to the property. Probably make a small profit off boarding if I do not include insurance, mortgage, tractor, time, repairs, mowing, utilities, etc.

[mvp]

[QUOTE=TrotTrotPumpkn;8280797]
I can build my own $20,000 ring for less than two years board on one horse at your proposed rates. [/QUOTE]

Yes, but that $20K ring isn’t worthy of an upper Midwest winter. (Or tell me how you can build an indoor that’s at least 60’ x 120’ for $20K.

So when you use that number and complain that BOs are making an appreciable amount of money or their offerings compare to yours, remember that you are comparing apples and oranges. The infrastructure they need to build and maintain in order to keep boarders is probably much more expensive that what you’d build in your backyard.

I will say that I run into that problem here in the rainy/clay-soiled Willamette Valley. I don’t want to own a horse if I can’t ride it 7 months a year (or cope with bad footing and wet tack All.The.Time. So any place I’d board must have an indoor. And those come in better and worse forms here. But I don’t think I could afford to build an indoor that would make all the hassle and expense of running a boarding barn worth it.

That is to say, the saying “Go big or go home” really applies here… and with a lot of money and work involved. I think that’s how it is that our market gets bifurcated into people who can barely afford their horses and will forego riding the in the winter (heck, they gave up lessons and training long before) and those who own horses in order to learn on or show. Those of us who want to ride year round and improve our horses have a hard time if we don’t want to be in full training with someone.

[mvp]

[QUOTE=Casey09;8280836]
I don’t think it really matters which part of the mortgage is included or not included. It’s a business. Pricing should be determined by market analysis for what is competitive for a particular market. Then it is up to the owner to decide whether or not it is a viable business or not. If the barn owner can make be successful including a part of their home mortgage in the cost of board, then that would be fine with me. However, that isn’t how businesses determine pricing. Pricing comes from a market analysis because even if customers see an apportionment of costs system as fair, they won’t pay more because one barn’s mortgage is higher than another’s. Customers will only pay more for better amenities or better service.[/QUOTE]

FWIW, I consider someone living on the property and being within ear-shot of the horse to be a pretty crucial part of a boarding barn’s services. The times I have boarded horses at barns where no one was on the property at night…. those were periods in my life where I always held my breath a little bit when I left the barn for the night.

[TrotTrotPumpkn]

[QUOTE=mvp;8281282]
Yes, but that $20K ring isn’t worthy of an upper Midwest winter. (Or tell me how you can build an indoor that’s at least 60’ x 120’ for $20K.

So when you use that number and complain that BOs are making an appreciable amount of money or their offerings compare to yours, remember that you are comparing apples and oranges. The infrastructure they need to build and maintain in order to keep boarders is probably much more expensive that what you’d build in your backyard.

I will say that I run into that problem here in the rainy/clay-soiled Willamette Valley. I don’t want to own a horse if I can’t ride it 7 months a year (or cope with bad footing and wet tack All.The.Time. So any place I’d board must have an indoor. And those come in better and worse forms here. But I don’t think I could afford to build an indoor that would make all the hassle and expense of running a boarding barn worth it.

That is to say, the saying “Go big or go home” really applies here… and with a lot of money and work involved. I think that’s how it is that our market gets bifurcated into people who can barely afford their horses and will forego riding the in the winter (heck, they gave up lessons and training long before) and those who own horses in order to learn on or show. Those of us who want to ride year round and improve our horses have a hard time if we don’t want to be in full training with someone.[/QUOTE]

No, I never said not to raise rates, or that my way was the way. Absolutely not. I am objecting to $1,000 a month. I still haven’t heard how that number is the breakeven + ____% profit? I am genuinely curious. I imagine the OP is in a more metropolitan area. I will say I am always surprised at some of the rates I see in the metro Minneapolis area (very reasonable) for decent facilities. I wish those BOs were on here to elaborate. I suspect with the fixed costs (tractor, arena, etc.) that 30 + stalls may be more affordable than 16, but I don’t know.

Regarding a $20,000 outdoor (and I can build a draining, proper outdoor with base here for less than that luckily, as dirt work is cheaper and there are really close quarries), well personally, I take January and usually most of Feb off. I give my horses at least a month off each year (and that’s past tense, as I haven’t been in a program, so to speak, for several years as I had a youngster). But back when I was, I needed a break and I think they like a break. I do that at home and I did that as a boarder. I just can’t deal with the super short days and that is my absolute busiest season at work. I don’t work horses much at 10 degrees or less in a cold indoor anyway.

I can haul ten minutes away to a nice indoor for $10 a ride March-April, so not really applicable for most. But, I’m digressing, my point was why $1,000?

I’m not trying to be argumentative. I just think that would take out most of the middle class.

Perhaps I won’t have to budget paying for horse boarding into my early retirement plans.

[Mosey_2003]

I would never have a horse again if it cost $1,000/month to keep it. But, I don’t show or anything.

[Guilherme]

[QUOTE=AmarachAcres;8280914]
A farm is for sale near me.

500k

30 stalls, indoor arena, heated tack, hot water wash stalls, turn out, access to hundreds of acres of trail. 55 acres.

<snipped for brevity>[/QUOTE]

You missed some stuff, I think:

Taxes

Insurance (Fire, extended coverage, liability)

Barn and outbuilding maintenance (would include, but not be limited to, normal wear and tear; periodic painting; electrical and plumbing; insect and pest control; driveway and access repair and maintenance; etc.)

Fence maintenance and repair

Equipment repair, maintenance, and depreciation.

Fertilizer for fields

Lime for Fields

Chemicals for weed control

Advertising

Tax Preparation/CPA

Local licensing and taxes, if any

Professional licensing costs, if any

Phone and Internet service

J-Factor for unexpected expenses

I’m sure I’ve missed a few, too, but when you start adding these things up you start to see some real cost.

The rental homes are not part of this discussion as we are talking about boarding horses not renting houses to people. If one or both were used as part of the $2000 monthly compensation then they would be part of the mix.

I suspect these items, combined, could easily double you base figure.

G.

[Sparky_Boy]

$1k per month, left and right coasts sure. Mid-west? Not a chance.
If you were VERY convenient to a MAJOR city, had an on-site BNT and all the amenities (indoor/outdoor, turnout, etc.) then you might get a few willing to pay that.

Cost of living is cheaper (and salaries) in the Midwest. You have to really travel to get to the bigger shows so generally barns seem to be two categories - Fancy and travels to big shows or very low key/4-h type barns.

I have a facility that is as nice as any commercial barn near me. I have my 3 horses and just one boarder. I store hay in empty stalls The only reason I have a boarder is because that boarder is expected to help with chores a few days per week. Otherwise, they are not worth having around.

[BeeHoney]

FWIW, I’ve never been able to hire a decent barn worker (or any barn worker) for minimum wage. That’s not realistic. Workmans comp adds 15-20% on to that cost. Obviously payroll taxes add to that as well. So that $10 or $12 and hour salary represents a LOT more money coming out of the employer’s pocket. And benefits–I don’t know too many workers that will work without some level of benefits–vacation, sick time, bonuses. Also, remember that employees don’t just magically show up and do everything they are supposed to. Employees have to be hired, trained and supervised. That costs a lot of money. You cannot reasonably expect any worker to do a decent job for very long if they are not supervised. If you are in business long enough, you will run into other employment expenses–employees who accidentally/carelessly damage equipment or the premises, employees who steal, or employees that damage your business out of anger (at being fired, for example) or just total lack of professionalism. Oh, and don’t forget, when you hire employees you also have to hire an accountant to help get all your tax paperwork filed every month, and accountants also add to your actual labor cost.

No matter what size your farm, one employee is never enough because that would put someone working every single day, which most people (quite reasonably) aren’t willing to do. Also, farm work is way more than feeding, turnout and mucking. Mowing, repairs, and general maintenance on the property and all of its associated equipment take a huge amount of time.

Amarach, I don’t know how a 30 stall barn could possibly remain remotely operational with an actual labor budget of $2K per month.