Not sure if anyone can help.. What's your opinions about investing in farmlands - buying large tracts of lands then rent out to operators to operate? I am more inclined to farms that grow vegetables and fruit trees. Which part of Australia is most suitable for this? I was thinking if WA is a good choice since it is nearer to Asia hence cheaper for export? What's the upside and downside of this? Thank you
Hi! I have sent a PM on this before so I will leave it to the rest to go over. Interested in different views at PC.
dependant on zoning, size and also purpose will affect whether it is a residential or commercial lend...
interesting topic. you seem to be targeting WA across a number of different avenues get them while their pants are down strategy This would play a bigger part for the businesses looking to lease the land i would think. Best to look across the top of Australia and target the "food bowl" areas. If you're inclined to take a punt you could target drought affected areas in hope the rains come and escape drought plus drive up demand for the land
Hi mate, I used to work in the Agribusiness section of one of the majors, so I am a little rusty...but basically if the property is agricultural income producing, you'll need a business loan. Some 2nd or 3rd tiers may be able to do a home loan but it will depend of farm size and their policies. Short term, renting out farms is good but the long term it isn't...it depending on whats grown, what pesticides are used can ruin the soil quality and ultimately impact who comes to rent/use your farm. lending margins on agricultural income producing land is 60% and they'll (usually) use an average of a 3 year period..better known as Year in Year Out. Definitely figure out if there is a market for renting out farms. I know farm ownership its getting harder and harder, so perhaps your target market might be a newbie or someone who wants to try something different. I hope this helps! Happy to answer any other questions you might have.
Hi mates Thanks for the replies. I am targeting WA because it is the nearest large port to Asia. But i was told too that this state might not be very suitable for what I desire due to terrain, water and climatic conditions. Queensland could be a better choice.. I am open to this too. My question is : does it make sense to operate a Fruits and vegetables farms, perhaps with a bit of livestock within from a business point of view? What's the expected riskS and benefits associated with it? My thinking is this : Yes, agriculture is a business where forces of nature could play you out, plus fluctuation in global food prices and protectionist policies by some countries might make your produces hard to sell.. But with the world's population increasing still and people yielding for better quality food, the demand for Aussie products, esp from Asian nations will always be there. So if we are to manage it well, the profits could be substantial.. Just my simple thoughts.
@Xiao Hui Large scale farming is a *lot* of hard (manual) work ~ even when you have million dollar hardware. Your labour costs can kill your business (look at all the fruit farmers looking for pickers at the moment). You are probably better off doing a small scale, niche farming like @Lizzie The Y-man
A friend in Victoria grows garlic on a large scale ... due to weather conditions this year he has lost near 80% of his crop ... 60 tonne at last count. Makes it rather sobering
Obviously it would depend on what type of farm you wanted to buy as to where you would buy. It would also depend what is on the market and how the numbers stack up. There cant be very many large horticultural farms for sale that have a lease back option. You could probably count them on one hand. How does leasing out fruit trees work ? Personally I think leasing or share farming a grain property is a better option with less issues about water, harvesting, storage and product degradation. And the development of better canola and mustard varieties and improved high value pulse varieties. Though it may be a bit late as prices have escalated over the past few years
As you are not farming the land but using it as a commercial property, it would be wise to check whether you lose any exemption for primary production for land tax. The tenant won't be keen to pay this impost as it is not his issue.
