Passive Income With a Horse Ranch

Have you ever ridden a horse? It’s kind of fun isn’t it? It almost makes you want to buy one, but then you realize that you don’t have any property and there are probably large expenses to keeping a horse fit and healthy. But, there are opportunities to lease a horse, which would help you decide if you really want to own one in the long run.

This is the typical mindset of horse lovers out there. While I never encourage the practice of leasing (especially when it comes to automobiles), it’s actually not such a bad idea in the area of horses. It’s best to get a feel for horse ownership before you dive in and actually buy one yourself. You might actually save yourself a lot of money this way.

The Practice of Leasing Horses

So who profits from the horse lease, the person renting a horse or the owner? I hope it’s obvious to you – the answer is the owner. They purchase the horse and then decide to lease it to other individuals for a profit. The idea of this post is to become the owner of a few horses, and leasing them out for a passive income.

What is Needed to Start the Ranch?

The answer to this question really shouldn’t surprise you either. We’ve all seen horse ranches here and there. Obviously, you’re going to need some property for the horses to roam. I’d say the smaller ranches are a minimum of 10 acres in size.

You’ll also need some shelter for your horses. It doesn’t have to be extravagant, but it should be built well enough to keep out the rain and the cold.

Finally, you’ll need to buy some horses! Along with them, you’ll also need grooming tools, saddles, shoes, and of course – fodder!

Initial Expenses

Since we are talking about property here, the initial expense of this passive income venture could be quite high (unless you already own some land). Depending on your area, the property alone could run you about $200,000. Add a barn for the horses and you’ll add another $50,000-100,000. Then, purchase four or five horses, plus the essentials for their survival for another $15,000. You’re looking at a grand total of $300,000+.

Potential Revenue

With horse leasing, it’s actually not uncommon for the lessee to pay a set rate per month AND also pay for the vet bills, fodder, and all necessary expenses. Plus, the lessees will be completely responsible for their horse – just as if it were theirs. This means that the horse owners do very little work other than the initial purchase of the horse!

The average lease amount is typically between $300-500 per month, which is complete profit since the lessee is also paying for the other expenses as well. So, if you have 5 horses, you could potentially be bringing in $2,500 a month.

Is It Worth It?

With a potential income of $2,500 per month, that means that the yearly potential is $30,000. Keep it up for 10 years and you’ve covered your initial expense of $300,000. It doesn’t sound like an amazing business when you compare these numbers, but if you have a large market for horse leasing, you can quickly ramp up your profits with more horses (since the property is a fixed expense).

Let’s say that instead of 5 horses, you purchase 20. Your initial expense of $300,000 now rises to $345,000, but with the extra horses, you’ll be able to increase your monthly revenue.

If you were able to lease out 20 horses at $500 per month, your potential monthly income just increased to $10,000 per month, or $120,000 per year. Suddenly, with this income, you could cover your initial $345,000 expense in less than 3 years! This passive income idea is starting to sound quite profitable!

What do you think about this passive income idea? Do you see any holes in my plan? I think it’s an awesome form of passive income!

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