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Are 20 horse stalls too many?

Discussion in 'General Appraisal Discussion' started by G-man, Oct 19, 2010.

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  1. G-man

    G-man Member

    0
    Feb 4, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Ohio
    Well, I haven't been here for awhile, but i have a question regarding a property in a semi-rural area of N.W. Ohio. The property is ten acres with an older, 1,200 square foot home of fair to average condition. There has been a lot of D.I.Y. improvements to the interior & exterior and it shows. However, the big items are the two large outbuildings with a total of 20 horse stalls, along with fenced pasturage & a 1/2 mile or so oval track for the owners horses. He says he does not board any horses, and there were no signs to indicate this was a commercial use. However, 20 stalls are about five times the amount that is typical for a rural property to have for personal use, it is usually about 2 - 5 stalls in a barn. I did a review of sales in the immediate area and found ZERO sales of anything with horse facilities. If I could find something similar to the subject in terms of the # of horse stalls, I imagine the house would be far superior to mine.
    The question I have, is this property better classified as a commercial use, or could I, assuming I can find comps, appraise this as residential? Thanks in advance for any advice.
     
  2. Denis DeSaix

    Denis DeSaix Elite Member

    425
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    In most of my markets, there is horse-to-site area ratio (I cannot tell you off the top of my head what it is) and past a certain horse-count, one needs a conditional use permit (which many times is an indication of commercial use).

    Is there such a requirement in your area and how many horses can be owned on 10-acres per the zoning ordinance (if one exists)?
     
  3. Michigan CG

    Michigan CG Moderator Staff Member Moderator

    493
    Nov 1, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Michigan
    Considering the house is 1,200 SF in fair to average condition and the 20 horse stalls, two large outbuildings, the track and I am assuming paddocks there is most likely more value in the horse facility improvements than the home.

    In a Highest and Best Use analysis I think you would find that the horse facilities (assuming good condition) would be the answer. You should also consider that the boarding industry is not doing well with the economy which makes it more complicated.

    I know that a local appraiser called me about a year ago with a similar property (15,000 SF riding arena, 6 paddocks, 15 boarding stalls and a 2,000 SF house in good condition). He appraised it for a big bank and they rejected it because they called it commercial. I was asked to appraise it for one of my clients a few months later.

    I don't keep track of what different levels of licenses allow because I don't need to, but I would be careful if I were you and make sure your fee approaches $1,000.

    There are some sales in Monroe County, although they are getting old.
     
  4. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin
    a home, a barn with 20 box stalls, a couple of other barns and a track could be for personal use but I would bet at one time the owner trained some form of race horses. Either TB's or Standard Breds. These horse could have been his own and a hobby or as a commercial training and conditioning stable.

    In todays market the horse industry is as low as I have ever seen it across the board in the past 50 years. In the TB market they are bring about 1/2 the value of several years ago with less and less owners/investors in the market place.

    The Standard Bred market is a tad better but not much. What is driving the SB market is the fact that the Amish and other secs are buying them for using horses there value is above that of the TB and western market.

    In the QH/PT/AP/Morgan and other western breeds market has never been lower at about 10% of what it had been several years ago for value.

    The high-tail market (American Saddle Breds) and the Hunter-Jumper (TB's), warm bloods market is at about 1/3 of what it had been, because this is where the money folks that are not into racing equines, but have blue nosed daughters and blue nosed wives are buying horses for the dog and pony shows. They go along with the Bentleys and BMW crowd.

    There is a fair polo market but it has dropped somewhere around 50% as well because of the state of the world economy.

    Kill price on horse depending on the market is between .25/.35 cents a pound.

    I would check the zoning on the property first off, maybe view it as an interm use. Many of these old horse barns are turned into storage places.

    Not much money in the equine business at the present time. I have re-valued a large number of them here in Wisconsin for banks, there value even as income producing is about 1/2 of what it was two years ago.

    Money people are still spending money for horse but there is not as many of them as there was a few years back. Most is old money that still moves int he equine world.
     
  5. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    48
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Not if you have 21 horses! Seriously, sounds more like a commercial operation with that many. Out here in the wild west a four stall barn would be common on 10 acres.
     
  6. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    Top Poster Of the Month

    750
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    on 10 acres? Does the house and barns sit on the inside?....660' x 660' or a very narrow "oval"?
     
  7. Ray Miller

    Ray Miller Elite Member

    0
    Feb 20, 2002
    Professional Status:
    Licensed Appraiser
    State:
    Wisconsin

    Most weekend horse owenrs have from one to four/five head of horse on their property with a small two to four stall barn. About 80% of my former shoeing clients were this type. The remaing percentage 10% were commercial boarding barns, 5% were large breeding operations and 3% working cattle outfits, the remaining 2% was a mix of everything.

    Some horse owners use to keep a stud and a two to four brood mares and were breederss. (that's part of what got the horse market in trouble. To much breeding, to many unwanted foals that grew up unbroke). They were the ones that had the larger operations. But still were considered noncommercial.

    SB owners tend to have one to eight head, some people I shod for as as many as 20 head after they retired and really got into it.

    A lot of TB Trainers wil have a string of one to 10 head of race horses. the large barns many more, same for the SB owners and trainers.

    Polo owners will haul from six to twelve head of horse to each game and have a stable of 20 or more horses. I use to have a couple of clients that had their own cargo jet that they would fly thier ponies all over the world for a game. May several trips with them as the on site farrier. then for a while in Colo up at my stables at Ute Peak Horse Center and Spring Creek Ranch I house a couple of teams from south america and mexico when they were in the state for games.
     
  8. Denis DeSaix

    Denis DeSaix Elite Member

    425
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    (my bold)

    I agree 100% with the bolded part.
    Early in my career, I appraised a similar property to yours as an SFR. In retrospect, I can say now I probably did not have the competence then to appropriately analyze H&BU (I didn't realize then that my competence may have been weak).

    You are asking the right questions here, so your competence level now exceeded mine then. "I would be careful if I were you" is excellent advice.

    Good luck!
     
  9. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    48
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado

    My father was a polo player in the 1930s in Burlington, Iowa. Polo was big at the Broadmoor in Colorado Springs a few years back but developers have turned the polo grounds in to residences now.
     
  10. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    48
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    Forgot to mention...

    My brother has a 10 acre place in Black Forest (Colo Spgs) and they have a four stall barn with three horses.
     
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