Most people look at ranch land and see a meadow with a creek and willows running through it and sagebrush grasslands rising to pine forests. But ranch land owners see distressed assets that at one time were able to be picked up for a good price, with undeveloped revenue streams, and a potential return on investment that could rival the stock market.
The Adobe Ranch is on the east side of the Sierra Nevada in California, in a volcanic landscape near Mammoth Lakes. It's still pretty far out but there is still land for sale in California all around this ranch land.
It's a pretty lonely place to find a businessman from the city becoming a rancher, but at there are those who believe economics and ecology can work hand-in-hand. And one such man is trying to prove it on the Adobe Ranch.
The ranch is hoping to yield returns for investors while also conserving natural resources, biodiversity, and open space. Whether it succeeds or fails, the approach illustrates a way to look at ranching economics and ways for ranch land to survive, even if they move beyond ranching. The project coordinators and ranch owners have put "several million dollars" into the property, and they want to double their money on the ranch land in five years. That's roughly equivalent to a 14 percent return each year. It's about what a reasonably savvy investor can make in the stock market in a good year. And it's the kind of return investors demand when they put their money into fairly risky real estate ventures.
Looking at the ranch and the ranch land, it screams return on investment. This is done by increasing the revenue of the house, but still capitalizing and putting money into it. The return is focused mainly on the land itself. Ranch land, is not as common as it once was, and because of that, is being sought for by developers. Ranch properties are valued for one thing, the property. The Adobe ranch is hoping to turn those tables, and to increase revenue, while lowering the capital cost.
Owners of the ranch land hopes to put the ranch's core riparian areas along Adobe Creek in the federal Wetlands Reserve Program, which pays for the agricultural value of the land in exchange for a permanent conservation easement. The program also pays for restoration, which will help; the ranch's creeks were hit hard by a previous owner, who increased the numerator by grazing more cattle than the ranch could support.
The ranch land has some isolated meadows up in the forest fringes that can't really be used because the previous owner lost the ranch's grazing permit on the national forest. In such a deal, the ranch land owners would offer the private parcels to the Forest Service in exchange for public land near Mammoth, which needs land properties for a hospital and expansion of the growing town, currently hemmed in by public land. That land would be sold and the money would go to the ranch land.
The ranch land could also be divided and sold off as couple of parcels. One is a 40-acre parcel right on Highway 120 that is currently listed for $340,000 - almost 10 times the price per acre that is paid average over the entire ranch land. To increase the revenue on the ranch land, there are plans to open the ranch to recreational land for fishing or hunting land.
