Ranching Operations

How to Add Value to Your Property with Ranching Recreation Activities

For many people, there’s a mystique to visiting a ranch that simply can’t be found anywhere else. Maybe it’s riding horses on the range and feeling like a rancher for a day, or maybe it’s just sitting around an evening campfire under the stars with friends and family. Whatever it might look like, you have an opportunity to host activities that can earn your ranch more income, maintain good relationships with the public, and help finance your operation for generations to come.

If this sounds appealing to you, Redd Summit Advisors has a few thoughts on different ways you can add more value to your ranch operation.

Exploring Recreational Activities for Your Ranch

The scale of the activities you offer will depend on how much time and money you are willing to invest in this element of your livelihood. You could choose to operate on a day-only basis and provide activities like hiking, ziplines, horse rides, shooting sports, and guided tours. Or … you could set up something like a dude ranch where guests can book overnight stays and help with the cattle operation, go on cattle drives, or participate in other ranch activities.

As far as overnight accommodations, some ranches choose to just add a few cabins to the property and rent them online through AirBnb or Vrbo while some have gone as far as building lodges that can cater to leisure travel or business groups. Right now, larger lodges with capacity for 30 to 50 people are popular for events like family reunions, weddings, business meetings, and retreats.

The great thing about hosting recreational opportunities on your ranch is that you can implement them at whatever level works best for you. In addition, all activities can be leased out to a company that specializes in those types of businesses; this alleviates you from the day-to-day footwork while still providing supplemental income.

One thing to note: Make sure to set accurate expectations when doing your marketing. While there are many people interested in rustic adventures, there are just as many who want a more upscale experience and will not be happy if they find themselves cleaning a horse pen or eating cowboy beans on a tin plate.

"Set accurate expectations when doing your marketing."

Pricing Recreation Activities on Your Property

Admission, lodging, and activity rates vary widely from ranch to ranch, so you’ll want to do some research on your business’s potential income and expenses. The more upscale you go, the more you can typically charge for activities and accommodations. To give you an idea of monetization, here are some numbers:

  • Horse rides can be set up on a per-hour or per-day basis, and it’s not uncommon to get $50 an hour or $350 and up for a day of guided riding.
  • You can charge by the hour for zipline activities and earn between $50 to $100 an hour per visitor.
  • Cabin rentals cost from $50 per night to $350 or more, depending on your area, your level of accommodations, and season.
  • Large lodge rentals often run from $500 to $1,000 per night, and full guest ranch experiences can gather anywhere from $2,000 to $4,000 per week.

Don’t Forget These Liability Protections for Your Ranch

No matter if you’ve booked guests to visit your ranch or people arrive unannounced, you need to arrange legal protections in case of an accident, injury, or death, including:

Liability insurance. This protection secures you against losses to people and property.

Standard Operating Procedures (SOPs). Every employee and family member on your ranch should have documented SOPs available so they know how to handle all situations that could arise on the property.

Release of liability. Have an attorney draft you a release of liability so you cannot be sued if a guest damages property or gets injured or killed while participating in activities on your property.

Lease agreement. If you lease your property to a recreational vendor and have them run activities, be sure to have a strong agreement in place. There should be requirements for insurance coverage in the agreement plus a clause that protects your ranch from any liability incurred under the vendor’s direction.

Another thing to note: Corporate structure can help with your liability concerns. Consult with an attorney to see whether setting up an LLC or corporation might be in your best interest. Setting up a separate recreational entity that leases the facilities and rights from your ranch might be the best approach to protect your ranch business and personal assets.

LRP Insurance Can Help Monetize Your Ranch Operation

If you’re looking for more ways to provide supplemental income for your ranch, consider a Livestock Risk Protection (LRP) policy. This USDA-subsidized insurance product helps protect your operation against market declines in cattle prices and through this program, you can lock in a floor price for your cattle (similar to a put option) and get paid an indemnity if market prices dip below the coverage price for the endorsement period.

For more information on LRP insurance, contact Redd Summit Advisors here or call 1-800-825-2355 for a no-obligation consultation.

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Jess McCartney
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