Buying A Horse Farm In Maryland
Updated: Dec 29, 2019
Maryland is horse country and at any given time, there are dozens of horse farms on the market. When buying a horse farm, there is a lot to take into consideration and it can take a while to find the right property. This is what you need to know about buying a horse farm in Maryland.
Buying. First things first—you need the right team. Interview a few agents who specialize in agricultural properties and shop around for a lender who works with USDA loans. Buying a farm is a bit different than buying a residential property and you will want to work with professionals who understand your needs. As with selling a farm, buying one is often a longer project. You will likely have more requirements to fulfill than you would for a residential property so it will take some time to find a suitable property. In addition to bedrooms, bathrooms, and location, you will need to think about acreage, barns, stalls, storage, pastures, and potential for expansion. Buyers often feel they are searching for a “needle in a haystack” (I’ve heard this exact phrase used more than once). Armed with your list, you should be able to find the right property to meet your needs.
Weather. While the summers here are hot and humid, Maryland enjoys a relatively mild winter with temperatures averaging in the 40s. It is worth noting that western Maryland typically sees colder temperatures and more snowfall than the rest of the state. That being said, most horses do well here. Allergies are generally mild (for horses) and mud season (abscess season) is in the fall. Overall, the grass has excellent—sometimes a little too excellent—nutritional value and good quality hay is always available. Note that 2018 was a bad year for hay because there was quite a bit of rain, so expect to see prices rise until next season.
Buildings. The property needs to have good bones. I have spoken to a number of farm buyers who state from the get-go that they are willing to put in some effort to make a property work for them. This is a good attitude to have because it may broaden your options. However, be careful not to get in over your head. Make a plan and budget for both the amount of time and the amount of money you would be willing to put into a property. Ultimately, financing a turnkey property and financing a less expensive property with construction loans (additions and repairs can easily amount to hundreds of thousands of dollars) may not be all that different. Depending on your lifestyle and your vision for the property, one may be a better choice than the other. You will also want to be sure that there is room for expansion since most equestrians adopt the motto of “the more the merrier.” I have written a more extensive article on building barns and another on building arenas that you may find helpful.
As you might imagine, many buyers find that buying a turnkey farm is in their best interest. It may take a while to find the right farm, but it is important to make sure the house and barns are in good shape. This means move-in ready and in need of little more than cosmetic work.
Finances. As I mentioned before, it is worth speaking to lenders who work with USDA loans before you start your search. There may be other options for you in the form of farm credit or more favorable rates and you will want to be fully informed before you choose your financing. Once you have bought the property, there are a number of tax credits and exemptions available to farm owners. The Agricultural Reserve in Montgomery County gives farm owners an opportunity to significantly reduce property taxes as long as the land is used for an agricultural purpose. However, you don’t need to buy a property on the Ag Reserve to see tax benefits in Maryland. The Maryland Homestead Tax Credit helps farm owners deal with large assessment increases and there are also a number of Agricultural Exemptions. It is wise to hire an accountant who specializes in farm finances and will be able to help you navigate such programs and ensure that your farm is running in the most financially efficient way possible.
Location. Some buyers would love nothing more than to own a remote property, but for those of you who need to commute, want to run a business, or are keeping an eye on investment value, it is likely that you will want access to major highways like I-70, I-95, and I-270. As I’ve said in previous articles, it is important to keep in mind that properties near major thoroughfares have more access to amenities. Not only will you want easy access to grocery stores and gas stations, a good location will give your choice of farriers and vets and attract clients to your business. Check out my article on Maryland Tack Shops to see which shops are closest to you!
Insurance. Recently, I wrote an article on equine and farm owner’s insurance. While you won’t require every policy under the sun, it is worth reading up on the different policies and understanding what is covered and what may be a liability. My intention is not to scare you, but to help you be more prepared. As many farm owners know, things can and will go wrong from time to time. Such is life with horses.