Where the buffalo roam: property investment in the American West

For some property buyers, waking up to the silence of the open plains of the American West is the best way to beat big city living. There are cattle grazing in the fields and wild horses running behind them, while streams cut through landscapes backed by snow-capped mountains. This is life on a ranch in the American West, the land where tales of cowboys and cattle rustlers are held close to heart. Owning a farm or a ranch taps into deeply held desires for freedom, independence and having open space to yourself.

“Most of the large Montana land owners love and enjoy the land,” said Todd Phillips, owner of Phillips Realty, specialising in farm and ranchland in central Montana. “Buyers like privacy, freedom and recreation.”

The American West includes the mountainous states of Arizona, Colorado, Idaho, Montana, Nevada, New Mexico, Utah and Wyoming. These states have the least populated areas in the continental United States, and much of the territory has undeveloped wilderness and protected conservation areas. Climates and ecosystems vary greatly across the region, from grasslands to deserts to mountain forests.

Ranch and farm properties in the American West can range from seven-acre parcels of undeveloped grassland selling for less than US$60,000, to huge mountain estates complete with luxurious houses, staff quarters, stables, irrigation systems, rivers and scenic views that sell for more than US$100 million.

In the mountain state region, the average price of farm and ranch property was US$1,616 per acre in 2015 – the latest year for which figures are available – according to data from the United States Department of Agriculture (USDA). Kristina Nowak, a real estate agent who owns an 80-acre farm and ranch in Colorado, said that five years ago you could buy farm and ranchland in eastern Colorado for US$300 to US$500 an acre. The same land today will cost US$1,200 an acre or more if it is irrigated.

Stable agricultural markets, rising real estate prices in nearby cities, and low overall inventory are behind the rise.

“Ranchland just doesn’t come up for sale very often in many places,” said Nowak. And investing in ranches and farms in the American West has become a hot trend in recent years, with buyers now viewing such properties as a stable and low-risk place to park their money, much like government bonds.

“The rate of return on a Western ranch isn’t great, but appreciation can make all the difference. I’ve seen ranches double in value in just a few years,” said Christy Belton, a ranch broker with Ranch Marketing Associates. “The land here has the opportunity for wild appreciation if you time it right.”