Buying a Ranch vs. Resort Life

By: Jim Taylor

This is the classic dilemma for a family looking to make an investment that will double as a place for the family to convene. How often does one hear from members of families that have had family retreats of one kind or another “we loved it” “we went every year” “everyone in the family came”. These are places where memories are made and they often represent the “glue” that holds a family together.

So, do you buy a place in a private residential community/resort or do you buy a family ranch? If you opt for a classy resort like the Yellowstone Club, Aspen or Jackson, the cost is likely to be about the same even though the ranch might have hundreds or thousands of acres for every acre one buys in the resort.

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Put very simply, a resort is a place where one goes to be entertained. A ranch is a venue where one can entertain oneself.  The resort is the easy answer because there is something there for everyone, from a latte to all forms of cultural and social entertainment. In this day and age of people having the ability to be instantly gratified, it is difficult to sell anyone on the concept that there is value in waiting and working for one’s gratification – much less selling the entire family on the concept.

Every successful development has been forced to become family friendly – to serve all the generations. Family offices set up to service the needs of extended families are proliferating and are reported to have over $4 Trillion in investable assets. Family offices are the obvious home for these types of investments and they tend to impose an important discipline on the process of making the resort versus ranch decision.

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The bottom line we would contend is that the resort “investment” choice is hardly an investment. The bulk of any resort property is generally tied up in a structure which tends to either depreciate or require a high level of maintenance. All expenses related to ownership are not business expenses – rather they come out of after tax income. The real difficulty is that during periods when the families’ use of the property is limited, the maintenance goes on.

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A family ranch, on the other hand, is a true investment in itself. The family is buying a piece of land at its lowest use that, quite apart from being loaded with wildlife, is being operated as a cattle ranch. Land of this type is in increasingly short supply and there is growing demand for the high-quality protein it produces. These factors cause it to have a high probability of increasing in value. The fact that it is beautiful and might have a trout stream passing through it is simply an added bonus that allows its owners to derive a lot of pleasure from being on it.

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The benefits for the coming generations of children to appreciate nature and experience the ranching life style is impossible to calculate. And, if there is a period when the family does not use it, a ranch has a productive life of its own. In fact, there is really no comparison between ranch life and resort life. While compelling and stimulating, resort life is not real.

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