Purchasing a Small Horse Property
By Crista Vesel
Originally published in Today's Horse Trader Magazine, May 2006
Owning property is one of the greatest privileges we share as Americans. Smaller horse properties that can support under ten horses are in high demand and becoming difficult to find in all urban and most suburban areas. This high demand and low inventory can lead to growth of equity in your real estate investment that exceeds normal market increases.
Purchasing real estate that supports both you and your horse can be a wonderful accomplishment, but the process can be laden with challenges. Finding adequate acreage in a horse friendly neighborhood can be very difficult and few real estate agents know what to look for when it comes to land purchases or horse properties. All parties need to be aware of pitfalls, such as restrictive covenants, home owner associations, water usage restrictions and zoning requirements. The days of “a man has a right to do what he wants on his own property”, are over in most areas of the country. Armed with the willingness to do a little research, the small horse property buyer can still find a great deal and protect his legal interest.
Acreage
The majority of home buyers only require a suitable home on a 5000 square foot lot. In contrast, the horse property buyer needs enough land to support both horse and human. One acre is about the minimum amount of space that can support a horse or two. There is little opportunity to graze your horse on a small acreage property without depleting the vegetation completely. According to grazing management principles, one horse will need six acres of grazing area per month to accommodate nutrition requirements. Each pasture area should also be given a three month rest period after the plant growth has been removed by 50%.
As this article is about small acreage properties, home buyers should be aware that they will have to supplement their horses diets with hay. If allowed by neighborhood covenants, you may choose to give your horse exercise and something green to nibble on by rotating your horses through different areas of the property. Care must be taken with any property to keep the soil and plants in reasonable condition or you will most certainly end up with a dust bowl! A great resource for livestock, soil and plant management is the USDA Natural Resource Conservation Center, www.co.nrcs.usda.gov/
Manure disposal is another issue that small horse property owners will have to face. With most of your property taken with the barn and corrals, there is little room to spread manure to dry, which works quite well if you are in a dry climate. Spreading your manure, however, will give you an increased risk for weeds -- the seeds are often contained in the hay you feed. If you plan on having your manure hauled away, you will find that most garbage companies will reject manure waste due to the weight or charge you a very high fee. Even the best neighbors will have every right to complain about the smell of manure, if you are in a confined neighborhood. Drive the neighborhood before purchasing a home to research how other horse owners are handling this issue and read the covenants carefully.
Zoning
Zoning ordinances set in place by county regulation are designed to control the use of the land. Zoning laws may indicate how the land can be used, what kind of structures may be built, setbacks, and natural resource protection. Zoning permits must be issued by this agency before development of land can occur.
Check the zoning of your potential property before submitting a contract to purchase. You must decide whether you can live with the zoning guidelines, even if it seems the neighbors are all “stretching the law”. Check into the setbacks for structures, fence lines and utilities. You have the right to research any piece of land through your county assessor’s office, which can often be found online for free. A property record search can also give you a lot of other information, including the sales history, price and date of past sales, and a parcel map.
Covenants
Many subdivisions adopt a private set of rules that regulate the development and use of the land. Enforced covenants are great for keeping neighborhoods looking neat and organized and can definitely add value to a property. Covenants can also be a burden to those who do not agree with them. If possible, before purchasing a property get a full copy of the restrictive covenants and home owner association (HOA) documents (this is required in any Colorado real estate transaction). Your real estate agent may assist you in contacting the HOA, but an attorney may be necessary for full legal interpretation of the documents. Spending a couple of hundred dollars now, may outweigh the future thousands in HOA fines that may be imposed on a non-compliant property owner.
Restrictive covenants may set simple guidelines for property usage, or they may be extensive. They may tell you how many horses you can have on the property, whether you can own a stallion and if you can use your property for breeding purposes. They can also dictate if and where you can build a barn or other outbuildings, their size, style and color. Most likely, if there is a HOA, you will be required to get any building plans approved by the architectural committee. Plan ahead and submit your plans to the county zoning department and the HOA at least one month before beginning a project.
Water
Water is becoming a scarce resource in many areas of the country. In states like Colorado, it is very rare to acquire water rights with a property purchase. Even if your land parcel has a beautiful pond or stream that you think your horses would love to drink and swim in, check with the county water department! Unwary purchasers have ended up with properties designated as wetlands or with water regulations that forbid the use of surface water for horses or other livestock.
The same caution should be applied to any wells on the property. Find out from the county water department if there are any restrictions on water usage. Areas such as the foothills of Denver can designate a well as “domestic use only”. This can mean that you have to dig an additional well for your horse useage, or even truck water onto the property to be held in a designated cistern. Sometimes, the previous owner of a property will not know about these restrictions. It is best to over-research this area to protect your interests.
Fences
County zoning, subdivision guidelines and geographical features can all affect your fence line. Remember that the more restrictive land use control takes precedence! It only takes one call from a disgruntled neighbor to alert the local zoning district or the private land use controls. It is much easier to build a fence correctly the first time, than to move it at a later date.
In rural areas, you may want to find out whether your state is a “fence-in” or “fence-out” state. Colorado is a fence-out state, which means that a property owner must provide private fencing to keep out the neighbor’s visiting livestock. Fencing laws can often be found online through the state livestock board or the county equivalent.
After you “go under contract” with the property, you will have the opportunity to have a survey completed. If your home is in a subdivision, there will most likely be a survey on record from the time the neighborhood was platted. This may be an economical way to learn about your boundaries and some features on your lot.
Faulty information about surveys often leads buyers to get an Improvement Location Certificate (ILC). An ILC is not a survey! An ILC was originally designed as a piece of information for lenders, not buyers. It is not meant to provide accurate lot lines, which can be used to establish a fence or other improvement. The information given by an ILC will not be legally backed by the surveying company. Notice that the word "survey" does not even appear in Improvement Location Certificate.
A real survey, of which there are several kinds, can be quite expensive and take several days of field work by a reputable surveying company. A boundary survey, for example, might provide an improvement survey plat and show any easements or encroachments. A survey is the most reliable form of property description and can be used to establish fencelines and building setbacks. If the survey is done in a "lot and block" neighborhood, it may cost under $1000. However, if you have a rural, mountain or "metes and bounds" legal description, the survey may cost much more!
Reputable Title Companies will often provide title insurance on a property without a survey. They will be guaranteeing the established legal description for that property. If you choose to get a survey and it shows any problems, the Title Company will then treat these problems as exceptions -- and not insure them unless the issues are cleared before closing.
Lending Issues
Colorado and Alaska are the only states in the U.S. that do not require lenders to be licensed. Recent legislative actions will hopefully change this in Colorado, which has the highest number of foreclosures of any state, by three times! Predatory lenders are certainly a problem, but land and horse property purchases can also be a challenge. Most lenders will not even consider providing a loan on unimproved land and those that will often require a very high percentage down (50% is common).
Horse properties often do not fit into the lender's idea of an "ideal property", due to wells, water rights, or difficult appraisals. It is critical to find a lender that is not scared away by such issues and that can give some sort of guarantee that they will loan on the property. A real estate broker who specializes in horse properties should know which lenders are open to challenges.
Finding Your Dream Property
Finding acreage on which to keep horses can be a daunting task. Most real estate agents do not have a clue about horse property issues like the ones listed above. The highest percentage of agents deal in city properties on small lots and will not even know where to search for properties that allow horses. Find an agent that knows the horse community, as well as the home community!
Even if you have an equestrian savvy agent, take the time to drive the areas of town that interest you on your own. If your agent relies solely on the multiple listing service for horse property leads, you will probably miss out on many great opportunities. While you are looking, you may run across “for sale by owner”(FSBO) properties. Take down the address and phone number and give it to your real estate agent to research. Though FSBO's seem like they would be a great buy, most are highly overpriced. Your agent can dig deep into the details of the property and help expose potential legal issues, as well as negotiate a reasonable price -- usually at no cost to the buyer.
Many pitfalls await the buyer of a small horse property. Careful research can ensure that most problems are avoided. Buyers should be prepared to follow the spirit of the restrictive covenants to protect themselves and their investment. Understanding these limitations will help the buyer to determine if their own concept and plan fit into the community.
Ride with passion!
Purchasing a Small Horse Property
By Crista Vesel
Originally published in Today's Horse Trader Magazine, May 2006
Owning property is one of the greatest privileges we share as Americans. Smaller horse properties that can support under ten horses are in high demand and becoming difficult to find in all urban and most suburban areas. This high demand and low inventory can lead to growth of equity in your real estate investment that exceeds normal market increases.
Purchasing real estate that supports both you and your horse can be a wonderful accomplishment, but the process can be laden with challenges. Finding adequate acreage in a horse friendly neighborhood can be very difficult and few real estate agents know what to look for when it comes to land purchases or horse properties. All parties need to be aware of pitfalls, such as restrictive covenants, home owner associations, water usage restrictions and zoning requirements. The days of “a man has a right to do what he wants on his own property”, are over in most areas of the country. Armed with the willingness to do a little research, the small horse property buyer can still find a great deal and protect his legal interest.
Acreage
The majority of home buyers only require a suitable home on a 5000 square foot lot. In contrast, the horse property buyer needs enough land to support both horse and human. One acre is about the minimum amount of space that can support a horse or two. There is little opportunity to graze your horse on a small acreage property without depleting the vegetation completely. According to grazing management principles, one horse will need six acres of grazing area per month to accommodate nutrition requirements. Each pasture area should also be given a three month rest period after the plant growth has been removed by 50%.
As this article is about small acreage properties, home buyers should be aware that they will have to supplement their horses diets with hay. If allowed by neighborhood covenants, you may choose to give your horse exercise and something green to nibble on by rotating your horses through different areas of the property. Care must be taken with any property to keep the soil and plants in reasonable condition or you will most certainly end up with a dust bowl! A great resource for livestock, soil and plant management is the USDA Natural Resource Conservation Center, www.co.nrcs.usda.gov/
Manure disposal is another issue that small horse property owners will have to face. With most of your property taken with the barn and corrals, there is little room to spread manure to dry, which works quite well if you are in a dry climate. Spreading your manure, however, will give you an increased risk for weeds -- the seeds are often contained in the hay you feed. If you plan on having your manure hauled away, you will find that most garbage companies will reject manure waste due to the weight or charge you a very high fee. Even the best neighbors will have every right to complain about the smell of manure, if you are in a confined neighborhood. Drive the neighborhood before purchasing a home to research how other horse owners are handling this issue and read the covenants carefully.
Zoning
Zoning ordinances set in place by county regulation are designed to control the use of the land. Zoning laws may indicate how the land can be used, what kind of structures may be built, setbacks, and natural resource protection. Zoning permits must be issued by this agency before development of land can occur.
Check the zoning of your potential property before submitting a contract to purchase. You must decide whether you can live with the zoning guidelines, even if it seems the neighbors are all “stretching the law”. Check into the setbacks for structures, fence lines and utilities. You have the right to research any piece of land through your county assessor’s office, which can often be found online for free. A property record search can also give you a lot of other information, including the sales history, price and date of past sales, and a parcel map.
Covenants
Many subdivisions adopt a private set of rules that regulate the development and use of the land. Enforced covenants are great for keeping neighborhoods looking neat and organized and can definitely add value to a property. Covenants can also be a burden to those who do not agree with them. If possible, before purchasing a property get a full copy of the restrictive covenants and home owner association (HOA) documents (this is required in any Colorado real estate transaction). Your real estate agent may assist you in contacting the HOA, but an attorney may be necessary for full legal interpretation of the documents. Spending a couple of hundred dollars now, may outweigh the future thousands in HOA fines that may be imposed on a non-compliant property owner.
Restrictive covenants may set simple guidelines for property usage, or they may be extensive. They may tell you how many horses you can have on the property, whether you can own a stallion and if you can use your property for breeding purposes. They can also dictate if and where you can build a barn or other outbuildings, their size, style and color. Most likely, if there is a HOA, you will be required to get any building plans approved by the architectural committee. Plan ahead and submit your plans to the county zoning department and the HOA at least one month before beginning a project.
Water
Water is becoming a scarce resource in many areas of the country. In states like Colorado, it is very rare to acquire water rights with a property purchase. Even if your land parcel has a beautiful pond or stream that you think your horses would love to drink and swim in, check with the county water department! Unwary purchasers have ended up with properties designated as wetlands or with water regulations that forbid the use of surface water for horses or other livestock.
The same caution should be applied to any wells on the property. Find out from the county water department if there are any restrictions on water usage. Areas such as the foothills of Denver can designate a well as “domestic use only”. This can mean that you have to dig an additional well for your horse useage, or even truck water onto the property to be held in a designated cistern. Sometimes, the previous owner of a property will not know about these restrictions. It is best to over-research this area to protect your interests.
Fences
County zoning, subdivision guidelines and geographical features can all affect your fence line. Remember that the more restrictive land use control takes precedence! It only takes one call from a disgruntled neighbor to alert the local zoning district or the private land use controls. It is much easier to build a fence correctly the first time, than to move it at a later date.
In rural areas, you may want to find out whether your state is a “fence-in” or “fence-out” state. Colorado is a fence-out state, which means that a property owner must provide private fencing to keep out the neighbor’s visiting livestock. Fencing laws can often be found online through the state livestock board or the county equivalent.
After you “go under contract” with the property, you will have the opportunity to have a survey completed. If your home is in a subdivision, there will most likely be a survey on record from the time the neighborhood was platted. This may be an economical way to learn about your boundaries and some features on your lot.
Faulty information about surveys often leads buyers to get an Improvement Location Certificate (ILC). An ILC is not a survey! An ILC was originally designed as a piece of information for lenders, not buyers. It is not meant to provide accurate lot lines, which can be used to establish a fence or other improvement. The information given by an ILC will not be legally backed by the surveying company. Notice that the word "survey" does not even appear in Improvement Location Certificate.
A real survey, of which there are several kinds, can be quite expensive and take several days of field work by a reputable surveying company. A boundary survey, for example, might provide an improvement survey plat and show any easements or encroachments. A survey is the most reliable form of property description and can be used to establish fencelines and building setbacks. If the survey is done in a "lot and block" neighborhood, it may cost under $1000. However, if you have a rural, mountain or "metes and bounds" legal description, the survey may cost much more!
Reputable Title Companies will often provide title insurance on a property without a survey. They will be guaranteeing the established legal description for that property. If you choose to get a survey and it shows any problems, the Title Company will then treat these problems as exceptions -- and not insure them unless the issues are cleared before closing.
Lending Issues
Colorado and Alaska are the only states in the U.S. that do not require lenders to be licensed. Recent legislative actions will hopefully change this in Colorado, which has the highest number of foreclosures of any state, by three times! Predatory lenders are certainly a problem, but land and horse property purchases can also be a challenge. Most lenders will not even consider providing a loan on unimproved land and those that will often require a very high percentage down (50% is common).
Horse properties often do not fit into the lender's idea of an "ideal property", due to wells, water rights, or difficult appraisals. It is critical to find a lender that is not scared away by such issues and that can give some sort of guarantee that they will loan on the property. A real estate broker who specializes in horse properties should know which lenders are open to challenges.
Finding Your Dream Property
Finding acreage on which to keep horses can be a daunting task. Most real estate agents do not have a clue about horse property issues like the ones listed above. The highest percentage of agents deal in city properties on small lots and will not even know where to search for properties that allow horses. Find an agent that knows the horse community, as well as the home community!
Even if you have an equestrian savvy agent, take the time to drive the areas of town that interest you on your own. If your agent relies solely on the multiple listing service for horse property leads, you will probably miss out on many great opportunities. While you are looking, you may run across “for sale by owner”(FSBO) properties. Take down the address and phone number and give it to your real estate agent to research. Though FSBO's seem like they would be a great buy, most are highly overpriced. Your agent can dig deep into the details of the property and help expose potential legal issues, as well as negotiate a reasonable price -- usually at no cost to the buyer.
Many pitfalls await the buyer of a small horse property. Careful research can ensure that most problems are avoided. Buyers should be prepared to follow the spirit of the restrictive covenants to protect themselves and their investment. Understanding these limitations will help the buyer to determine if their own concept and plan fit into the community.
Ride with passion!
Crista Vesel
