Rural Real Estate

Cats and Eels!!

Ah yes, living in the country.  Many of us have a theoretical love affair with rural real estate, but is it really all it’s cracked up to be? And is it a good investment?

I was talking to a friend of mine yesterday who is a specialist in the dairy farming industry and he mentioned some things I never knew about his area of rural expertise.

Did you know that there are only 12,000 dairy farmers in New Zealand but that 24 cents in every dollar New Zealand earns overseas comes via those 12,000 people.  Isn’t that incredible!! One third of one percent of NZ’s population supply 24% of the nations export earnings!!

That certainly makes farms significantly valuable to this country, but does that translate into investment potential?

Well given that farm prices have dropped by around 40% in this recession and residential by about a quarter of that one has to conclude that rural real estate has a lot more volatility than straight residential.  And given that a small farm costs as much as a large mansion we also have huge exposure financially if things go wrong. And finally the income off of much rural real estate is linked to global commodity markets which are enormously changeable.

So in terms of a strategy for an “average” investor one would have to conclude that rural real estate is a niche that we are better to leave alone.

And as someone who lived on 17 acres for several years I can 100% tell you that owning a rural lifestyle block is NOT fun.  5 hours to mow the lawns, chasing neighbours pigs out of the just demolished gardens, venturing out in freezing rain to get the stupid cow back into the paddock after it has enjoyed all the rose buds and removing the rabbit carcasses and live eels from the dining room brought in by the very happy cats are all reasons why I love concrete smog and glass, preferably from the 20th floor   Pave the forests, eliminate rural real estate!!

Stay Inspired and Stay safe ~ Dean Letfus

The Ethical Investors Strategist

PS:  I have had several emails over the weekend from people asking if they could come to my event as they are new investors and were worried it might be “over their head”. The answer is the event will benefit everybody, never bought a property through to to full time investor. I have deliberately structured the event to get anybody moving forward, whether you need to know where to put the key or how to bolt on a second supercharger MORE DETAIL HERE

Can’t wait to see you all there!!  Dean