Most horse farm businesses are owner-operated, due to the 24/7 aspect of the business. Be aware that anyone who wants to lease the business from you is also going to want/need to be living on-site. So it seems like your target market is someone who wants their own horse farm but doesn’t have the financial means to do it themselves.
It sounds like you have a pretty good business management background, so rather than leasing the business, you may be looking to hire a ‘horse farm manager’ (more likely a husband/wife team) who will take care of the day to day running of the business whilst you do more of the strategic planning and longer term decision making. Depending on the size of the farm, you may need to employ other hands as well, so the management team would be taking care of that too.
Do you have access to the financials of the current business? Is it profitable as-is?
I probably can’t offer much more advice than that as I’m assuming you’re in the US and I’m not. I actually live on a very large horse farm in the UK (our house is one of eight converted from the original brick stables of a stately home) and I can see how much work it is to maintain the business. Workers are out from dawn to dusk, but then it is a much bigger operation - international horse trials are held here.
Your first conversation should be with a local insurance broker. You used the word liability, but I’m not sure you truly comprehend the breadth of it in this enterprise.
If a woodchuck digs a hole, and a horse steps in it, and his leg is irreparably broken, you’ll be liable. If he had a rider on his back at the time, who is now paralyzed, you’ll be liable.
If his daughter is heartbroken by the death of the horse and needs therapy, could you be liable?
If his wife is heartbroken and sues for loss of enjoyment, (for him or for the horse? Maybe both!) could you be liable?
If the feed goes bad, regardless of whether the toxin is colorless and odorless, could you be liable?
If a new horse is sick, and the illness spreads to the other horses, could you be liable?
I could go on and on. Even with someone else leasing the land and owning the business, there are extremes of liability here.
The title to this thread made me chuckle to myself. Reading “We know nothing about horses” made me laugh out loud. We had some horses growing up as pets and several neighbors with “horse farms” (yeah right).
Seriously… everyone who likes horses and has money thinks about having a horse farm and those that follow through find out it’s the opposite of profitable.
Please don’t waste any further time in this endeavor. If you want horses, get horses, put them up at a stable, enjoy them, and accept that they will always be a cash outflow. Trying to make them a cash inflow will destroy your peace of mind, wallet, and more. I truly don’t intend this as unkind and I am certainly not impugning your ability, it’s just the horse farm market is stacked against the owner/investor/hobbyist.
Here’s another way of looking at it: is the property being sold or is the horse farm business being sold? You and the seller have already answered that and thus have valued the horse farm as less than the property value. So it’s not such much a horse farm as property with a barn, stable, and fences waiting for the next dreamer/sucker.
You know, my mother had some standard bred horses, and always joked that if she ever hit a big lottery win she’d just keep on raising horses until it was gone.
A horse is a big, dumb animal. One end eats and bites, the other end shits, and both ends kick. Stay away from horses, I can’t stress that firmly enough.
You know how to make a small fortune in horses? Start with a large fortune. Really, there is no money in this, especially for someone who doesn’t know a whole lot about horses. You’d be better off leasing the land to a cattle farmer.
Just no… You don’t know enough and if you and your wife studied from now until you were 90,you might know enough to have one horse. Maybe. I say this out of love… for the horse. Oh,when you think you know all there is to know about horses that only proves you know nothing at all.
The one thing I know for sure about horse farms should tell you something about the odds of making money:
When the IRS audits a business that loses money, there’s a general rule that if a business has profits in 3 out of 5 years, then the presumption is that it’s really a business, with the burden of proof on the IRS to prove that it’s actually a hobby.
With horse farms, the rule is that it’s profitable 2 out of 7 years. Talk about setting the bar low.
So… my guess is that the seller is the only one coming out ahead when it comes to horse farms.
I recently asked my accountant a general question about how much money a small business can get away with losing for how many years. I didn’t mention horses.
Her response was that they don’t pay too much attention, depending on the type of business. But they do watch out for horse farms because so many of them are hobbies and not businesses because they don’t make any money.
If you own a few horses and charge one or two people for lessons in your small barn, you have a hobby not a business. By far it seems there are many people losing money for every one having a successful business.
Former horse owner here, whose daughter rode at a barn for years.
Buying one as a horse farm is not a good idea unless you grew up loving horses.
You need a clientele of people with lots of money. You need to have people to give lessons. You need to coordinate the owners going to horse shows, which involves trailering the horse to the show and organizing everything there, and getting enough people to attend to show a profit. People take their horses to barns with horses that do well at shows.
As Urbanredneck said, the bottom fell out during the recession. We got lucky - just while we couldn’t sell our horse we donated him to charity, and got a nice writeoff. After that people were abandoning horses. I don’t know if the market has recovered.
The owner of our barn made her money as a dealer, but that requires a very good knowledge of horses. The OP is not going to do that.
And you need some rich people around to rent stalls. At our barn we had one of the founders of a big tech company who commuted to work on helicopters and the wife of a guy who owned a big mattress chain. Joe Montana was also very active (and known to be a sucker.) Let’s just say that when we got rid of the horse when my daughter went to college paying her tuition was about break even.
Oh, and even around here there were horse thieves. Another reason to stay on the property.
I’ve heard one of the worse things about Girl Scouts is these little girls go to GS camp and fall in love with horses then the parents get suckered into getting her a horse. She gets into barrel riding and such and it all sounds good until she has to go off to college or otherwise loses interest.
Now granted there are people who have money to burn and are into the sport of polo where a polo horse cost around $100,000 and they bring 5 to a match.
Back to the OP, I still say switch to cattle. Or if you serious raise a mini horse as a kind of hobby. They are very cute.
Riddle me this OP, when a horse breaks down a board, wanders into the street is struck by a car and is laying in the road screaming in pain, are you going to be the one who puts a bullet in it’s head when the vet’s an hour away? It’s all well and good to offer self-care, but where the rubber meets the road it’s all on you. Don’t forget up price out “care and custody” insurance.
Where there 'a livestock, there’s always dead stock.
Old joke:
How do you make a small fortune in horses?
Start with a large fortune.
Long story short, the issue’s been discussed to death on horse boards, conclusion: boarding never more than a break even business and comes with copious emotional turmoil and plenty of crazy people.
I have a hobby business, and when I picked up my tax returns, my accountant told me that one reason why a lot of entertainers, professional athletes, and other very wealthy people invest in (specifically these two things) horse farms or auto racing is because they are extremely expensive hobbies, although two that have the potential to pay off spectacularly if you are lucky. It’s a big tax shelter.
The only way for this not to be a money and sanity-losing proposal is if you have a riding arena with lights and you lease the entire equine facility to a well regarded trainer. S/he fills the barn with their students and horses-in-training, carries his/her own C&C insurance, brings in their own equipment, lives on site or provides a night manager, you do zilch but take the trainer’s rent.
caveats
If you don’t already have a small house or barn apartment on property for staff to live onsite, don’t do it.
If you would have to build a riding arena, don’t do it
Background: I was night manager/morning chore person/assistant instructor at an owner-operated farm for two years.
Another danger to horse farms are the complete and utter idiots who get on your land and do stupid things. Chase the horses with off road cycles, get kicked by a horse, steal your horse, leave the gates open, steal your equipment, dump horses on you, shoot your horses. You name it suburbanites are a blight on the planet. Then they sue you.
My favorite was the woman who let her kids drive ATVs on the farm, and when the farmer pointed out her kids were destroying his pastures, acted as if it was the farmer’s fault he wasn’t running the farm as a free park. Stupid, stupid, stupid.
No matter how pretty, never put horses on land next to a development.
