Why are 35 and 40 acre lots Common in Colorado?

Buck and Rail fence along a mountain meadow

If you’ve grown accustomed to social distancing and are searching for your cabin site in the woods, you may have noticed that country properties in Colorado are frequently offered in increments of 35 or 40 acres.  There are reasons behind this.  Explaining 40 acre lots goes back to the original government surveys, most of which happened in the 1800’s.  Surveyors broke down sections of land into 6-mile square townships.  Each township has 36 numbered sections.  Each section is one square mile consisting of 640 acres.  Those sections are further broken down into quarters.  Each of those quarters are broken down again into quarters.  A quarter section is 160 acres and a quarter-quarter is 40 acres.  When you see a 40, 80, 160, etc. acre parcel, the legal description will often be described using this Public Land Survey System (PLSS).  35 acre lots are common because of a 1972 law in Colorado that restricted a landowner’s ability to simply split off anything less than 35 acres.  Commonly known as Senate Bill 35, it required landowners to go through a subdivision approval process for parcels smaller than 35 acres.  Parceling land into lots greater than 35 acres does not require approval (although some counties in Colorado have a higher acreage requirement), which is why we often see parcels offered in 35-acre increments. 


CRP Land – Benefits Landowners & Natural Resources

Rainbow and green pastures

Although much less common in and around Steamboat Springs, much of the land in Moffat County to the west is enrolled in the program.  CRP is the USDA’s acronym for Conservation Reserve Program.  It was established in 1985 by President Ronald Reagan to prevent soil erosion, improve water quality, increase wildlife habitat by establishing and maintaining land cover.  The program is completely voluntary and has grown to be one of the largest private land conservation programs in the nation.  The program is administered by the Farm Service Agency.  Participation generally requires removal of environmentally sensitive lands from agricultural production, so landowners are compensated annually for the loss of production on those lands.  Typical contracts last 10 to 15 years and are usually transferred upon sale of the land.  In order to qualify for the program, several factors are taken into consideration: wildlife, water and soil erosion benefits mentioned above as well as air quality benefits from reduced wind erosion and overall cost.  The program has been successful in reducing water runoff and sedimentation which improves the health of ponds, lakes, streams and rivers.  More than 20,000,000 acres of topsoil is protected and has a direct impact on our nation’s natural resources. 


Top Selling horse – $225,000

Christy Belton at Cowgirl Cadillacs booth

Wickenburg, Arizona was the epicenter for fancy horses this past weekend.  The Cowgirl Cadillacs horse auction (only in its 2nd year) was a success with the top horse fetching $225,000 (nope, not a typo)!  The auction dubbed “horses from ladies, for ladies” and is a tip of the hat to remarkable women who defied societal norms in America’s early western history.  Every horse offered at the auction was offered by a woman who lives up to the example set by those early female trailblazers.  It seemed only fitting for the female ranch brokers of Ranch & Resort Realty and Mason & Morse Ranch Company to partner-up and sponsor the event.  Several of my horse-friendly ranches were on display and we had a constant stream of horse owners and bidders come by the booth to talk ranch real estate.  Steamboat Sandblasting provided us with Cowgirl Cadillacs etched glass ware.  Despite the unusual Arizona downpour, the event was well attended and exciting.  People from all over the west, particularly the snowy west, attended the auction. It was held at the Rancho de los Caballeros guest ranch and golf club in the High Sonoran Desert near Phoenix.  The top selling horse was Blue Chip Investment, a 9-year-old blue roan gelding.  A registered Friesian/quarter horse cross, “Chip” was 16.1 hands and extremely well trained.  The average price for the 50-horse auction was just under $30,000.     


Property Taxes in Colorado Simplified – Part 2

Old fire truck in front of pond

As mentioned in part 1, Colorado has some of the lowest residential property taxes in the U.S., making home ownership attractive. Taxes on vacant land with the agriculture tax classification are also extremely low.  Following is a study on how property taxes are determined in Colorado.

The assessor establishes the value of properties based on comparable properties that have sold in a 2-year period prior to the appraisal date. Taxing authorities that provide services establish their mill levies (a mill is 1/10th of a penny or $1 revenue per $1,000 of assessed value) based on the total of all property value in the service area. Property tax is calculated by multiplying the market value by the tax rate (7.15% in 2019 for residential and 29% for non-residential) and the mill levy. For example, a residence valued at $1,000,000 multiplied by the 7.15% tax rate would result in an assessed value of $71,500. Various entities have taxing authority such as the county, the school district, the community college, water district, fire services, library, museum, social services, etc. In this example, the total mills levied by all of the public service providers for area of the home is 58.079.  This number multiplied by the assessed value and divided by 1,000 results in the tax due of $4,152.65.  Another way to calculate would be to apply $1 per $1,000 in value.  In this example, it would be $71.50 x 58.079 total mills for $4,152.65.

Non-residential properties are calculated with the same formula, but the tax rate is 29%. A $1,000,000 commercial property or non-ag vacant land parcel in the same service area as the residential property above would be multiplied by 29%. Assessed value would be $290,000 and the 58.079 mill levy multiplier would result in a tax due of $16,842.91. When a residence is constructed on a non-ag parcel of land, the tax rate of the total assessed value decreases from 29% to 7.15% and it is not uncommon to see the tax bill decrease.  

Land with ag status is valued based on the agricultural earning capability of the land.  Market values do not come into play on these types of properties and the savings on non-residential parcels with ag status can be significant.  A vacant parcel of ag land that would sell for $1,000,000 may only be taxed at a couple hundred dollars a year.  Once a residence is put on the land, the residential tax rate (7.15%) is applied to the total assessed value of the land (ag or non-ag) and improvements. 

Property taxes collected in each county stay in the county and do not fund state services. 


Property Taxes in Colorado Simplified – Part 1

Sidney Peak Ranch Bunkhouse

I was recently asked about property taxes in Colorado. Property tax is calculated by multiplying the market value by the tax rate and the mill levy.  Mill levies are set by each authority providing tax supported services. For residential properties, Colorado’s taxes are among the lowest in the nation. Colorado has one of the more complicated tax structures resulting from three major amendments and how they interact. The end result is a unique set of limits on taxation and spending by Colorado’s lawmakers. 

In 1982, Coloradans passed a constitutional amendment mandating that home values cannot make up more than 45% of the state property tax base.  That left a 55% contribution from non-residential property owners.  When home values have risen faster than business property, residential tax rates have actually dropped. When this amendment, called the Gallagher Amendment, was implemented, the rate was calculated at 21% of a home’s value; today it is 7.15%.  The non-residential (which includes vacant land without agricultural tax status) property tax rate is 29%.

In 1992, another constitutional amendment was approved that requires voter approval for all tax hikes or bond measures.  It also limits how much government can collect using a formula based on population growth and inflation. The amendment, known as the Taxpayer’s Bill of Rights or TABOR, mandates that lawmakers list the total amount the increase will generate and how the proceeds will be spent. It prohibits special elections for tax hikes and bond measures and it prohibits a tiered income tax in the state. 

In 2000, Amendment 23 was approved.  This amendment required school funding to increase each year by the rate of inflation.  Because of the taxation constraints, lawmakers have been unable to fully adhere to this amendment and have pulled from other areas in the budget. Gallagher lowered taxes, TABOR limited state government and the services it is able to provide and Amendment 23 put more pressure on an already complicated taxation structure.  What has resulted is an uptick in local tax hikes and bond measures to fund local projects. Although local taxes in Colorado are higher than other municipalities in the U.S., state taxes in Colorado are among the lowest.   


Well, what about wells in Colorado?

Wellhead in snowy field near log home

One of the most important aspects of buying a rural residential property in Colorado is understanding the water supply. Most country homes not serviced by municipal water are supplied by a spring or a well. I’ll save springs for a future discussion and will focus on the two most common types of wells found in northwest Colorado.

Domestic wells are typically associated with rural residences. These kinds of wells allow normal, indoor use in one to three residences. The permit should outline number of residences allowed to be served by the well. A domestic well also usually allows for watering of a few head of livestock as well as irrigation of a lawn or garden. Irrigation is often limited and the permit will also outline this limitation. The permit will also include information about the depth of the well and the associated well test report often includes pumping rate.

With the increasing demand on Colorado’s water supply, much of the state has been designated as over appropriated. In these areas, it is common to find rural property wells that are household use only. This type of permit allows for typical indoor residential use but does not allow any outdoor use such as watering a horse or two, watering a flowerbed, washing a vehicle or even filling a hot tub. Household use only wells are also often found on parcels smaller than 35 acres.

Investigating the uses and limitations will help determine if a property is a good fit for your intended use. There are several types of wells and water sources that can be associated with a particular property. The permit and/or water right should describe the allowed uses. The Colorado Division of Water Resources has a great website with information on wells, water rights and water administration.


Can a Mountain Ranch be Profitable?

Feeding Cows at the Belton Ranch in winter

I received two calls this month from real estate agents with the same request:  A buyer looking for a Colorado ranch that will make a decent return. Assuming these buyers prefer to be closer to a bustling community or a powder-packed ski resort, I can almost always draw a line along the Continental Divide and split the state into two distinct areas.  The east slope has milder weather, typically receives less moisture in the form of snow, and often has a longer growing season enabling a farming component.  The buyer who is often attracted to a mountain community has to factor in higher land costs and significant feed costs. These two major components definitely affect the ranch’s ability to turn a profit. There are a hundred different ways to operate a ranch in Colorado’s mountains. My ranch has shifted from commercial cow/calf to a focus on yearlings and now back to a larger cow/calf operation. Some of my neighboring ranchers specialize in selling a portion of the animal prior to slaughter to avoid USDA regulations. Others provide local restaurants and stores with locally grown, grass-fed beef. Some operations are owner operated and others leverage their own time by outsourcing the labor. Some of us have hefty investments in hay production equipment and others purchase winter feed. We truck some of our cows to a milder climate; it is easier on our older and younger cattle and reduces our feed costs here in Steamboat. Yearly feed costs can vary wildly depending on the harvest and an early winter or late spring can shrink a profit margin. The cattle market falls into the wild-fluctuation category as well. On the flip side of that coin, some winters are shorter, hay harvest is excellent and cattle prices are high. Those are the years ranchers buy needed equipment, increase the quality of the herd, buy more land and put money in the bank for the lean years.  The long list of variables associated with a specific operation on a specific ranch requires a ranch buyer to put pen to paper.  Bracket the variables, customize the operation based on the needs or wants of the buyer (see my guest ranch blog) and study the land’s ability to support a specific operation. Planning and crunching numbers is a great way to start. It’s also an essential ongoing exercise…and it’s one of the fun parts of ranching: The challenge to always do better, to raise better animals, to enhance the health of the land and hopefully to make a little money in the process. Overall, it’s feasible to expect that a ranch can sustain itself.  If satisfaction could be measured in dollars, though, a mountain ranch would undoubtedly produce a stellar return year after year!


Water Rights Aren’t Complicated Enough?

Sweetwater Lake

Water rights in Colorado is a complicated enough subject on it’s own. Water rights that originate on public land add another layer of complexity to an already complex property right. Generally speaking, if a water right originates on or crosses over national forest land, permission of some kind is required. Some water rights pre-date the establishment of the national forest; these water rights may be exempt from permission (an attorney specializing in water would be able to opine). Water rights adjudicated after the creation of the public agency may be permitted through a special use permit or an easement. The conveyance of these permits or easements is not automatic and involves specific requirements. If a ranch has water rights and public land is nearby, investigating the location of the point-of-diversion, dam, or ditch location is a logical first step in the water rights due diligence.


6 Reasons Spring Creek Farm is THE ideal Steamboat Horse Property

Horse and Carriage at Spring Creek Farm

Ranch and Resort Realty’s newest listing, Spring Creek Farm, is a unique, beautiful and rare in-town horse property that strikes a perfect balance of ranch life privacy and proximity to mountain town amenities. Read on to learn the reasons it may just fit the location balance you have been looking for.

6 Reasons Spring Creek Farm is the Best Horse Property/In-Town Ranch Real Estate Option in Steamboat Springs:

1. Located on the edge of town, you can ride your horse to the Steamboat Ski Area, Romick Rodeo Arena or even the Strawberry Park Hot Springs, which may take a while, but it’s all about the ride, right?

2. Less than 2 miles from Downtown Steamboat Springs dining, shopping and coffee shops.

3. With 55 acres and trail access to the nearby National Forest, the property has riding trails throughout. You can ride all over your own land and hop on to Spring Creek Trail for unlimited riding on public land.

4. Less than 3.5 miles from local grocers City Market and Safeway.

5. You can almost reach out and touch the Steamboat Ski Area.

6. A barn with a stall plus hay storage, paddocks and an outdoor riding arena are nothing short of horse-heaven! And even the horses have a great view overlooking the city lights of Steamboat Springs!

Being away from it all has its advantages but so does being close to town. If ski town amenities and equestrian facilities rank equally high on your buying must-have list, Spring Creek Farm is certainly worth a look. If you have questions about this ranch or any other Northwest Colorado ranch and resort real estate, call Christy Belton, anytime, at 970-734-7885.


Stocking Rate?….A Loaded Question

Christy Belton on horseback with her cows

Buyers often ask about carrying capacity on various ranches. The answer is almost always the same…it depends. Although a ballpark number is easy to determine, the location of the ranch and even the micro-climates on the ranch itself can tip the scales. There are a few major considerations that sort to the top of the list when estimating the carrying capacity of a ranch: rainfall, slope, irrigation and type of livestock. A good rain year will (and on the flip side, a particularly dry year) will affect the average. A multi-year drought can severely hinder a ranch’s ability to support a reasonable number of animals. The topography and slope can affect how early livestock can be turned out to graze. A southwest facing slope will melt earlier and will also dry out earlier in the summer. North and east facing slope can provide later season grazing opportunities. Perhaps the biggest differential is whether the land is irrigated. The ability of a ranch to support more intense grazing is markedly increased when land is irrigated or sub-irrigated. The type of livestock a landowner runs is important: sheep eat different plants than cattle and horses. Smaller framed breeds mean fewer acres per head, although breed-specific productivity may offset the additional acres required for larger framed animals. Combining these factors to estimate a ranch’s ability to carry a herd from spring through fall provide just that—an estimate. Light stocking rates and trial-and-error on a particular property will help move that number over time, from an estimate to a appropriate number range.


Fifty Shades of Green

Rolling fields below Sleeping Giant

Maybe a slight stretch, but just slight…as I drive around Northwest Colorado this time of the year, I notice so many variations of green. The first signs of spring emerged as receding snow gave way to green grass. Various shades of green are front and center this time of the year: the lime green leaves on aspen trees contrast with the black green needles on evergreen trees; the yellow green of the willow trees contrast with the blue green needles of the blue spruce trees; the silver green of the sagebrush contrasts with the emerald green of new pasture grass. Spring time in the Rockies is brilliant green. The hillsides, the meadows, the tree-lined river corridors are all varying shades of green — certainly a feast for the senses!


Another Day in Paradise

I hear this phrase quite often here-and it’s not the sarcastic version either…spring has had to wrestle rather hard this year to convince winter to loosen its hold. With spring starting to prevail, many of the reasons we love to be here are impossible to ignore. Here’s a snapshot of 24 of my hours this week: With the appearance of 50-degree weather that forced the snow in the lower lying meadows to all but disappear, the fences demand repair. So I responded and waded through calf deep snow interrupted by patches of standing water and patches of higher ground with the first shoots of lime green meadow grass. My presence in the middle of a giant field startled the sandhilll cranes but after a while their loud squawks of alarm subsided, and they settled back into their spring routine. Working while immersed in the changing season was good for the soul. With a little recharge under my belt, I turned my attention to my ranch brokerage and got in a little computer and client time. On the way in to town, I had to slow down while a cinnamon colored black bear (who had obviously made it through hibernation in great condition) lumbered across the county road and down to the river. At the grocery store I ran into several people I know. We exchanged talk about family, the weather, real estate and ranching—all the little things woven into the fabric of a good community. I often warn people when they move here that it’s perfectly acceptable to be a few minutes late; you never know when you will have to stop and get a few photos of a wayward bear or take some time to catch up with your neighbor in the grocery store. Steamboat is special in that way-there’s a laid-back vibe and it forces me to slow down and take the time to appreciate the days I am spending on this earth. On my way home, I had to stop numerous times for elk to move from the same road the bear had crossed earlier in the day. These are sure signs of spring: wildlife and humans both welcoming the change here in paradise.


Insuring Livestock – Decisions, Decisions

Insuring Livestock: Cattle on Reed Creek Permit

Belton Livestock recently did a self-audit on our farm & ranch insurance policy.  Part of the discussion with the agent was the pros and cons of insuring our livestock.  The wildfires in The West this past summer brought this issue front and center for us. The obvious drawback of insuring our cattle is the cost of the premium, especially given the fact that we are only on our Forest Service grazing permits for about three months out of the year. The agent deftly pointed out that those are the months that fires burn.  Okay, okay….she has a point. For many years we have had protocol established for steps we will take if a fire breaks out on one of our permits.  Colorado’s forests are naturally loaded with fuel and decades of red tape have impacted forest management decisions. Trees that, at one time in the not too distant past, would have been logged, are now arranged in messy piles all over the forest floor.  Animals are not able to move freely between pastures and water, fences are decimated and large areas of the National Forest are blocked from foot, horse, and vehicular access.  Livestock grazing on our permits reduces the fuel but may not be enough to address the glacial speed of federal land policy and the effects of prolonged drought.  Although we are in an area that receives abundant snowfall and afternoon summer rain showers, the risk of wildfire still exists and that premium is sounding better and better.


State Owned Lands: Funding Education

Morrison Creek State Trust Lands sign

I recently listed the T&T Ranch south of Hayden. It shares a long boundary with a 1,368 acre parcel of land owned by the State of Colorado.  Having been a lessee of a State section for my cattle operation, I knew there would be restrictions so I took the time to dig a little deeper.  But first a little background: our forefathers strongly believed that a well-educated public would ensure that basic freedoms of religion, assembly, press, due process of law and trial by jury would be understood and exercised.  Knowing that many of the newly formed (and to be formed) states lacked a tax base, they established that Section 16 (and section 36 in Colorado) would belong to the State. When sections 16 or 36 were already homesteaded, granted to the railroad or reserved by the United States, states were allowed to select in lieu lands.  Regardless of the location, the State could use those lands to produce income to support education.  The practice is still alive and well today and it is relatively common to see Sections 16 and 36 belong to the State.   Many, but not all, of the sections have a public-use component. The State Trust Land area that borders T & T Ranch lies in several non 16/36 sections and is completely under private lease. Except for the public shooting range near the county road to the west, no public access is allowed. The nearby Sage Creek State Trust Land (located a couple of miles to the south) allows for archery deer and elk season and for dusky grouse and rabbit hunting from opening day of archery through May 31. It has two parking areas and is limited to non-motorized access for hunting, fishing and watchable wildlife activity from sunrise to sunset.  The Colorado Parks and Wildlife website is a great resource for those State lands that are open to the public.


Guest Ranches: It’s not just about the money….

Home Ranch campfire music and guests

If you’ve been lucky enough to experience a stay at a guest ranch, you’re familiar with the genuine hospitality, the relaxed surroundings and the inspiring outdoor excursions.  Perhaps it’s the structured focus of ranch life that allows you to leave everything behind for a few days, or maybe it’s reconnecting with family and friends, or with nature when the Milky Way is revealed on a clear night.  Maybe it’s just about life and balance and simplicity.  The feelings discovered during a great stay at a great resort are often life changing.

I am often asked what draws people to establish or purchase a guest ranch.  I’ve learned the biggest draw falls in to the intangible realm. Many people who own guest ranches have been on the guest side of the equation.  Owning one means they can share it with others; they can impact lives much in the same way theirs have been impacted.  They can put their own personal brand on the operation and continue the tradition of hospitality and serving others in a distinctive setting.

Most guest ranches (like most ranches in general) are purchased to satisfy something more than an investment portfolio.  However, because guest ranches come equipped with the permission to operate on a commercial basis and generate cash flow, there is opportunity.  Opportunity to make great sense on paper and opportunity to get deep satisfaction that can only come from this kind of non-traditional investment. 


Ag and Resort balance in Routt County

Horse sculpture in Routt County shows balance of ag and resort industry

Having a perspective from both agriculture and real estate, I often notice the successful and interesting balance agricultural producers, absentee property owners and the resort industry in Routt County have established.  Steamboat Springs has maintained and protected its deep agricultural roots, making it unique among many other Colorado ski resorts. The powder is legendary and Steamboat is one of the top destination resorts in the world. The friendly atmosphere and true western heritage endear visitors, sometimes converting them in to residents.  As residents, they often become a part of the local agricultural scene as new producers or as owners who lease their land to existing producers. 

Despite land prices that can’t reasonably be supported by agricultural production alone, crop and livestock sales still contribute significantly to Routt County’s economy. These sectors supply more than $35M annually to the local economy.  For those involved in farming and ranching, the connection to the land and livestock and working in the great outdoors is an intangible reward that can’t be measured or quantified. However, the importance of agriculture and the scenic vistas to the citizens can be measured:  Routt County voters on two occasions have approved initiatives that set aside tax dollars to purchase development rights.  The efforts of the Steamboat-based Yampa Valley Land Trust and the Colorado Cattlemen’s Agricultural Land Trust combined with landowner participation have protected tens of thousands of acres in the area Yampa Valley from large scale development.  These wide  open spaces are ideally suited for raising livestock and hay; fortunately there are plenty of willing and capable families and landowners here who sustain the agricultural traditions.  

Through the hard work and dedication of the agricultural producer, the local land owners and various organizations dedicated to farming, ranching and sustainable food production, Routt County is a true model of how recreation and agriculture have found the perfect balance to enhance a community.


Whiskey’s for Drinkin’….

Elk River pool and riffle with cottonwood trees on the banks of the river

….and water’s for fightin’! This is an adage straight out of the Old West that has held true for generations. As one of the major sources of water in the entire West, fighting over Colorado’s water in the early 1900’s extended across state lines. An agreement was reached among seven states in 1922 that provided an average of 7.5 million acre feet of water to be delivered for use to California, Arizona, Nevada and parts of New Mexico and Utah.  The remaining water could be used in Colorado, Wyoming, and parts of New Mexico and Utah.  Fighting over water within the state lines has resulted in a variety of arrangements like trans-basin diversions where water is shuttled out of its natural basin to another via man-made efforts. The Western Slope of the state has about 80% of the water while the Eastern Slope of the state has about 90% of the population.  On a local level, neighbors whose water comes from a common source sometimes find themselves on opposite sides of the proverbial fence when water is scarce.  Colorado’s solution to these water wars is based on the “prior appropriation” doctrine which basically states the first person to put the water to beneficial use has the right to use all of that water before the next appropriator can use any.  To exercise that right, the user must obtain a decree for the water, which is considered a separate property right in Colorado.  This system has provided a framework for managing a scarce resource with an increasingly unpredictable supply.  Landowners are well served to understand the basics of water law; it can be the difference between ending up in court while a judge decides how water should be allocated and sipping a glass of whiskey on the porch with a neighbor.


Fencing: To Barb or not to Barb?

While showing one of my ranch listings recently, the topic of conversation in the Ranger was materials used for the perimeter fence.  The buyer wanted to know how to mitigate the barbed wire fence to prevent one of her self-described less-than-pasture-wise horses from getting tangled up in the fence.  Colorado is a “fence out” state; generally speaking (with some exceptions), it is the landowner’s responsibility to fence unwanted livestock out of the property. The most effective way to keep cattle out is with a 4-strand barbed wire fence—which is not always ideal for all types of livestock.  Electric fence is also effective but less reliable when the power source is solar and/or elk and deer run through it.  The tried and true method to keep cattle where they are (or aren’t) supposed to be is with a barbed wire fence. Adjoining landowners who keep horses that may injure themselves in the fence can deter them from the fence line with a strand of electric fence or another parallel fence with smooth wire.