By Gary Hubbell, ALC
United Country Colorado Brokers
Almost everyone has the dream of owning a property in the country. And for those of you who don’t…well…we feel sorry for you. But sometimes the job market isn’t nearly as rewarding as it is in urban areas, and the new buyer may need to earn some cash flow in order to pay the bills. But how? Here are five ways to think about earning income while living on a country property.
- Short-term rentals—a great way to earn income on a rural property
Those of us lucky enough to live in the country can tell you what a surge we are seeing in the popularity of short-term rental properties. Just ask yourself—have you stayed in one? I have, several times, and really enjoyed the experience. The advent of AirBnb and VRBO sites have made it possible for people to leverage an unused garage apartment, basement apartment, bunkhouse, tiny home, cabin, even large lodges, vacation homes, and entire resorts are renting for big bucks. Some experts say the annual ROI (return on investment) for short-term rental properties is as high as 35-40%. As with anything, there are drawbacks. You’d better have a cleaning crew lined up if you don’t like flipping beds, and if you don’t like having strangers around your property, it’s not for you. Many local governments have regulations on short-term rentals, so check before you rush in and buy a property based on its short-term rental potential. However, we know several people who run short-term rentals, and it’s an important part of their annual income.
- Small animal husbandry—a source of income for country homebuyers
There are worlds of enthusiasts out there of which you have no idea. People will pay big bucks for certain heritage breeds of sheep, rabbits, goats, and chickens. Many people don’t have the space and the resources to raise them, but if you do—and you have the time, temperament, and marketing skills to do a good job of it—you might be surprised at the returns. Did you know that goat meat is the most-consumed meat on an international basis? Just like the Bible story where the brother complained of the prodigal son to his father, “You didn’t even give me a young goat to roast with my friends!”, goat meat is considered a celebratory meal in many cultures. One nanny can birth three kids at a time, each young goat can sell for $300 or more, and that’s why more and more country folk are raising goats. Do your research and find out which animals produce good returns, and look into raising small animals.
- Wedding venues are hard to find and country weddings are becoming increasingly popular
CoVid-19 caused a lot of weird things to happen, but many people agree that a return to country roots was an unanticipated blessing of the pandemic. With urban venues locked up tight because of CoVid restrictions, people looked for outdoor wedding venues instead, where fresh air is circulating every second. And then people found out they enjoyed what they discovered by getting married in the country. I had a property owner call me to talk about listing his country wedding venue, saying that he and his wife were getting close to retirement from their “real jobs” and wanted to slow down. I’ve called him three times about listing the property, but apparently they’re having too much fun and making too much money to sell. It’s not uncommon at all for a good wedding venue to rent for $5,000 a day or more. There are some crucial elements to a good wedding venue. First, you have to have good access. If the access is via a bumpy 4-wheel-drive road, you will definitely limit your bookings. Catering trucks, tent rentals, old grandparents and in-laws—everyone will complain if the road into the venue isn’t good. You have to have plenty of parking. You need to be in a neighborhood where a band rocking into the night won’t tick off the neighbors. You’ll need to check with the local governments and likely get a special use permit. It’s also likely that you may have to install an oversized septic system to serve all the guests. You may discover it’s a big hassle and you don’t like doing it. But those in the industry have figured out how to make it fun and exciting for wedding parties, and extra amenities such as providing a rental cabin or house for the bride and bridesmaids can add another $1,000 a night or more. A classic old pickup, a rope swing on a cottonwood tree, a trellis to use for wedding photos—these extra touches can earn big bucks. A good wedding venue can definitely add serious income to the right country property.
- Raising registered dogs—an income source for a country property
I know we already talked about small animal husbandry, but this deserves its own category. I raise AKC registered Labrador retrievers, and I’m pretty sure I can make more net annual income from my kennel of Labs than a similar-sized property running 40 or 50 cattle. CoVid also caused a boom in puppy sales, as many isolated people sought companionship. I had two litters of 10 puppies each this spring, for a total of 20 puppies. I sold 18 of them at $2,500 each and my total costs were not much more than $3,000. It takes 62 days of gestation from breeding until birth, and most breeders let their pups go at 7 weeks, for a total of about 16 weeks in each breeding cycle. I also sold 6 “started dogs”—10-12-month-old young dogs with a good amount of basic training. Those dogs brought $3,000-$5,000 each, and I realized that I had underpriced both my puppies and my started dogs. I’m now getting over $2,000 for each Lab pup and I won’t sell started dogs for less than $5,000. Despite my proven bloodlines, Labs don’t make as much money as other breeds. I have three different real estate clients who are planning on breeding Bernese mountain dogs, a very sweet Swiss breed. Bernese mountain dog pups are selling for $4,000-$5,000. Whether it’s French bulldogs, golden retrievers, Yorkshire terriers, Great Danes, or German shepherds, you can make a good living raising dogs. As with anything, a certain level of professionalism must be involved. Almost every breed of dog has undesirable genetic conditions that can cause all sorts of regrettable maladies, including hip dysplasia, blindness, and even aggression. If you’re going to become a breeder, study each breed carefully and get your breeding stock animals from a highly qualified breeder who has had their breeding stock animals genetically tested for undesirable traits and conditions. Again, research local regulations on running a dog kennel. In particular, many country properties are in homeowner’s associations, and most HOA’s have restrictions against raising animals for sale, particularly dogs. I spent about $25,000 building my kennel building, which has 9 runs, an outdoor hydrant for water, and a mini-split heating and cooling unit. You can spend less or you can spend more, but if you’re going to be serious about breeding dogs, build a kennel. Otherwise you’re just another “backyard breeder” and people won’t take you seriously. Keep in mind various factors such as whether a property is near a busy road or next door to a sheep farm. You don’t want your prize animals getting hit on the road or attacking the neighbor’s sheep and getting shot. Labs love water and ponds are a big plus for water dogs. As an aside, if you want to participate in this garbage of breeding poodles and any other breed of dog, don’t call me to help. Anything “doodle” is an overpriced mutt, in my opinion, and I won’t have anything to do with it.
- Raising specialty vegetables and fruit—income from a country garden
People are craving good food! The same old hothouse tomatoes, cucumbers, and peppers in the grocery store are turning people away. The flavor isn’t there, the uniqueness is gone, and people want a new alternative. And they’re willing to pay for it. Of course, many of my real estate clients become my friends, and my buddy Frank is one example. He retired from head of snowmaking at Aspen Skiing Company and I helped him buy a 7-acre country farm. The farm is in a nice climate zone and has excellent water rights, so Frank put in a big garden—bigger than he and Meg need. One of his products is called “elephant garlic”—a really tasty variety of garlic that has unusually large cloves. It’s hard to get into some of the more popular farmer’s markets, but established farmers are happy to take some of Frank’s garlic with them because it doesn’t take much space, it sells for top dollar, and it’s popular. He’s carved out a nice niche for himself, and his tomatoes are world-class, too. At the Aspen farmer’s market, a big organic beefsteak tomato can bring five bucks. Other growers specialize in organic honey, goat cheese, melons, rosemary, CBD hemp, “bubble gum” plums (an especially sweet, tasty variety), sweet corn, apricots, asparagus—the possibilities are almost endless if you have a green thumb, good water, organic soil, and a little marketing expertise. You probably won’t get rich off it, but you will have some satisfaction and your own dinner plate will be blessed.
No doubt you have your own ideas on how to make income on a country property. Feel free to share them in the comments section below!
Gary Hubbell, ALC, is based in the North Fork Valley town of Hotchkiss, Colorado, which is known as the fruit basket of Colorado. He brokers country homes, horse properties, orchards, vineyards, B&B inns, outfitting businesses, ranches, farms, and commercial properties in small and medium-sized markets. Gary and his wife, Doris, raise horse hay and Labrador retrievers on their 118-ranch near Crawford. Gary is an Accredited Land Consultant and an expert on water rights, irrigation systems, and productive properties.