What to Consider When Looking at Farms for Sale

What to Consider When Looking at Farms for Sale

Private Property South Africa
Private Property Reporter

Many of us dream of owning a wine farm somewhere in the Boland. The idyllic picture of sipping your own wine on the veranda of your Cape Dutch home almost seems like enjoying a permanent holiday. However, buying a farm is somewhat different than buying an ordinary property, especially if you want to generate an income from the investment and farming is not your primary occupation. Also keep in mind that an investment in farms for sale is normally much more expensive than buying an ordinary house and it is extremely important that you should do your homework thoroughly. If you already own a farm and would like to expand your farming portfolio, make sure to consider farms for sale that would complement your existing agricultural business. Even if the operations are different than your own, ensure that you have the necessary skills, equipment and manpower to manage the venture successfully. Consider why the current owner is selling the farm. If a severe drought has crippled the landlord financially; you might find it difficult to turn the situation around. If you are buying a farm and appointing a manager, make sure that this person is reliable and have extensive knowledge and experience – especially if you will not be able to keep a close eye on the operations. Also note that buying a farm is a long term investment – in most cases it will take years to see a real return on your investment. Will the farm be sold with the implements, equipment and farming machinery? The price might look like a bargain at first glance, but how much extra capital will be necessary to start or continue the operations? Some say that farmers should consider utilizing agricultural tourism as an extra income stream, but this is often only a viable option for a select few farms for sale – especially where a lot of infrastructure is needed to get started. If you need advice, some estate agents and valuators specialise in farms for sale. You could also do an online search to get an idea of realistic prices per hectare in a certain area. Prices are very dependent upon the location and type of farming activity.

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