There is a lot to think about when you’re buying a commercial horse farm. That’s especially true when you are self-employed. 

You’ll have to consider how your employment status affects your planning. This is true both in terms of what documentation you’ll have to provide a prospective lender, as well as how the land you select will affect you and your animals. 

You’ll have to account for factors such as:

  • Having enough room for a barn or stable
  • Access to water
  • The amount of shade the property offers
  • Whether it’s large and flat enough for your animal(s). 

Rocky soil could damage hooves or cause missteps that lead to injuries, and so can steep slopes. Wetlands and heavily forested areas are just wasted real estate on a horse farm. 

You have to go into the real estate transaction prepared, both practically and financially speaking, if you want to be successful in purchasing the horse farm that’s right for you and your equestrian family.

Identify What Your Horses Need

Just as you would with a home, you’ll need to make sure any horse property you buy is adequate for its intended use. You wouldn’t buy a one-bedroom home for a family with six kids and two live-in grandparents. Similarly, you wouldn’t purchase a small horse property if you planned to keep a large number of animals there.

Make a checklist of what you’ll need. Is there a barn on the land? Do you plan to build one? You’ll have to have some way to shelter your horses from the elements. You’ll also need a tack room for your equipment and enough space to feed and water your animals. 

Are there trails nearby? Do you want to build a corral? In addition to the health and happiness of your animals, the features you choose will also determine how much you’re willing/able to spend.

Identify What You Need

In addition to the commercial services you’ll offer, will you or a caretaker be living on the farm full time? If so, you’ll likely need a mixed-use property, which can affect your financing options. Zoning laws vary by location, so be sure to do your research.

Many horse farms have been around for a while and come with homes, barns, and other structures. But because they’ve got some years on them, they may need some fixing up. If that’s the case, consider rolling the cost of renovations into your mortgage by using an FHA 203(K) rehab loan. You can do the renovations yourself, but they have to be approved and inspected periodically by a contractor. And they’ll also need to increase the value of your property. 

If you are wondering whether property improvements are within reach, you can estimate your costs first. Start by determining the required improvements. Then do some quick research. If you need a new roof, for example, you can use the size and pitch to determine the price using an online roofing calculator. If the projects look to be within budget, then you can pursue formal quotes for labor and materials.

Separate Your Finances

Once you know what you and the horses on your farm will need, look for properties that fit the bill and a mortgage that fits your budget.

Since you’re self-employed, any prospective lender will want to see a clear wall of separation between your personal finances and those of your business. If there isn’t one, the lender will have a hard time telling whether your business is stable and whether you’re personally solvent.

Resist the urge to shift money back and forth to cover the cost of a business investment or to splurge on a vacation. Instead, pay yourself a regular salary you can use for personal expenses, and leave the rest in the business. This is helpful in illustrating a stable income.

Keep an eye on your taxes, too. Keep up on your quarterly estimated tax so there aren’t any surprises in the spring. If you take too many deductions, it will make it appear as though you have less income, which will make it harder to qualify for the loan you want. For the two years leading up to your mortgage application, minimize your deductions and take the short-term loss for the purpose of achieving your long-term goals.

If your horse farm is your business, and you’re looking to expand by purchasing a larger property, this could help you secure financing as well.

Go Into the Process Prepared

Since you won’t have any W2 tax forms, a lender will want to see two years’ worth of your business tax records to ensure you’re on solid footing. Be sure you keep good records so there’s no question you’re a good loan prospect.

Of course, you’ll look even better if you have a significant down payment. The more money you can put down, the less you’ll need to rely on a mortgage, and the more serious you’ll look to a lender. Besides, you don’t pay interest on a down payment.

Be sure your credit’s prepared, too. Good credit is a key factor in obtaining a loan, and it can also get you the best interest rate. In fact, having good credit can save you $21,595 in interest payments on a 30-year loan just based on the difference between excellent credit and fair credit. It takes time to build good credit, so start addressing this when you start planning, too. 

You’ll need to answer a lot of questions as a self-employed person seeking to purchase a horse farm, but the answers are out there. Healthy preparation, a good calculator, and the right resources can help you find them.


By Jessica Larson,


Leave a Reply