Cost of ownership - smaller vs bigger tractor

[WildThing]

Greetings - a newbie here.

I just bought 17 rugged NH acres, and will buy a tractor shortly. This forum is great, very helpful in getting my mind straight on what to get.

In looking at new and used Kubotas, and thinking about size and features, I see an interesting thing . . . I think.

It seems like the cost of owning a Kubota is not terribly high, assuming you have the money to tie up in it. In other words, the used tractors hold their value really well - both over time and as the hours get put on it, if the hours are not super high. (I probably would not hit 150 hours a year, in fact probably much less after the first year of ownership.)

If I am right, then buying a bigger tractor is not a lot more expensive over the full life of the investment than buying a littler one, assuming that one has the cash available to tie up.

Of course, if you have the cash and tie it all up in a big tractor it is not out there earning anything for you - I get that. But I think anyone (like me) who lacks the courage to have all of their savings in assets with downside risk knows that risk free return on cash is very low and has been for a long time. Similarly, if you are using up your credit to buy the bigger tractor, you limit your capacity to borrow for something else - I am putting this issue aside as well.

Say that the risk free rate of return on cash is 2%. I buy a big tractor (for my needs) for $60,000 rather than a small tractor for $30,000. I have tied up $30,000 more in the bigger tractor, with an incremental cost to me of $600 in lost earnings ($1,200 per year for the whole investment). Depreciation would be twice as high on a dollar basis, but it does not seem too steep. Maintenance and insurance costs would be higher but I doubt that they are double.

Am I deluding myself?

 

[Missouribound]

Set aside the cost of the tractor for a bit.
You have 17 acres.....what are you going to do with it? The usage of your property will dictate what you need. Usually many here, including me suggest that buying a bigger tractor will most likely be the best investment. But look beyond the purchase into future needs. You may just want to clean up and use the 17 acres as your personal estate. All that requires is mowing.
If you have a lot of work to do and you plan on doing it yourself then buy accordingly. Should you find yourself done with the work you can always sell your equipment. You will get a ton of opinions here. Help us help you by defining your need, wants and future plans if you know them.

 

[skeets]

What he said,,!!!!!!!!

 

[adventure bob]

I have a bigger, small tractor L6060 and sized it based on maintenance of my property vice the initial work I'm doing with it. Right now I'm clearing about 10acres of big burnt trees, lots of logging. However as my property progresses, it will end up being mostly pasture for my lifetime and it will need spraying, mowing and aerating. Around the house I use it for landscaping and long dirt driveway maintenance. I mighta went with a an M but that was a larger bodied tractor than I need and I had a 4060, which didn't have enough grunt or loader for what I'm doing with it.
Since it looks like your planning the math, plan for what you'll do most with it and size it form there; not form the extremes of your property maintenance needs.

 

[WildThing]

Thanks for responses. To be clear, I fully intend to get a tractor that is 20% too big vs. 20% too small. Through the blessings of Devine Providence and living in the greatest country on earth, I can afford whatever is needed.

In studying the models and choices, and watching the used market, I was just struck by seeing how well the value is retained by big or small, assuming diligent maintenance, so that (1) long-term ownership cost is not huge, and (2) the difference between big and small is not in proportion to the relative purchase prices (those are different points and it could be that the first is true but the second is not).

As for what I need, that is the fun part of the project. 17 acres is not a lot, but man it is rugged. Dominated by a 35 foot cliff, the high part where the house will be built is 1360 feet of elevation, with the low point being 1220 feet, with hills and dales in between. The seller wanted to open up the views, which are spectacular, so he cut lots of trees last summer before we made our offer, and left them on the ground. Most are red maple, 80 to 100 year old trees. Some wind has knocked down additional trees, white pine being the big ones. Easily 50 big trees are down on the property. A driveway needs to be put in place, too, which will take out some more trees.

The ground is very rocky (never farmed), resulting from the glacier scraping off the cliff 12,000 years ago. It had been logged gently a few years ago, but there remains slash all around and stumps aplenty, although a lot of forest remains. We asked the seller to clean up the lot in our negotiations, but expected him to counter offer our purchase offer. He came back and said he would accept our offer but leave the lot clean up to me. We jumped at that. The ground has so many big rocks here and there that I don't see that I will end up mowing a lot. I will clear some walking, logging and snowmobile trails. The land borders 100s of acres of forested land to which we can have recreational access, too, so it won't feel like a small personal park.

17 acres is not a lot, but my tractor will need to handle logs and rocks (grapple for sure), lift decent weight, maybe help in some of the building (the barn for instance).

Making sure the tractor is safe !!! and capable on the rugged terrain is a major consideration. This forum is proving to be very helpful, as have been some friends who own tractors.

Candidly, my wife has not heard from me that I am likely to buy a tractor that is WAY more expensive than the finest car we ever bought (or the boat, or the airplane I bought in 1984 - long since sold). I think the value proposition is somewhat different - the tractor will not cost as much over its life as the car, boat or airplane. I would like to tell my wife that, as she will turn a bit white when I tell her what I am spending on the tractor. That is why I asked here whether it is a fair point, or I am stretching the point. (She is a sweetheart and will let me buy whatever is needed in any case.)

 

[Missouribound]

17 acres is not a lot, but man it is rugged. )

Spend a few days in the seat and you will think you are running the Baja.
Would you consider paying someone with a bulldozer to take care of the very worst areas? Tractors are great but sometimes they just can't do everything.
Or at least get some opinions from landscapers who deal with problem areas.

 

[deathtoblackberries]

That doesn't sound like tractor work that's bulldozer and industrial excavator work and maybe a bulldozer mounted stump splitter if those stumps have a tap root. My neighbor clear cut 3 acres of 100 year old fir across from me, that's what they had to bring out. Maple is a LOT harder, and once cut as it dries it gets even harder. Easier to cut when wet and fresh cut.

 

[North Idaho Wolfman]

WildThing,
A tractor is not what you need, It will be of limited use and have the lowest safety factor.

Look at a tracked skid loader.

 

[WildThing]

North Idaho -

Wow. That is a very interesting thought. That pobably would work much better for the two years of clean up I have in mind.

Looking into that idea.

 

[sheepfarmer]

Here are some other idle thoughts: if those logs have not been down too long, see if there is someone that will salvage some of them for lumber without tearing up the place. There is such a person around here, different breed of cat than the loggers that want to come in and either clear cut or otherwise rip you off. You may not make a lot of money if any, but if they can remove some logs every little bit helps.

Second if you get enough cleared professionally to get your new house and driveway in, and live with the place for a while, then you can figure out which downed wood you simply can't stand to look at. You may find leaving the rest to rot away on its own to be acceptable. It is an exercise in frustration to try to keep a forest tidy, you might be surprised how fast bushes and little trees fill in around the logs, and as long as you don't have to drive in a particular spot it won't matter.