Foreign ownership of Australian farmland and agricultural business is at an all-time high with food security a key issue for many countries. Because of this there are many people who believe agriculture should and could be our biggest export earner.
So what about Australians, should we be investing in our own agricultural assets?
The Rural Bank, Australian Farmland Values 2016 Report indicates strong long term growth in farmland across Australia. With healthy commodity prices and beef at an all-time high, rental yields offer very reasonable returns in a low interest rate environment.
As with all things, investment related diversification is encouraged and without offering any advice most portfolios could afford a small percentage into this potentially enormous market currently enjoying unprecedented attention from foreign investors.
As with all property there are two types of return, rental income and capital value.
Often regarded as a defensive asset, rural property offers a rental return more often than not with a long-term tenant. In some cases, the tenant may have a vested interest, also being an investor in the land on which they proudly work.
As our farmers and graziers reach retirement there are many quality rural properties on, or coming to, the market. DomaCom believes that we should try to retain as many of these properties in Australian hands as we can, so we are on the lookout for crowdfunding opportunities.
First and foremost, properties must pass our due diligence process and stack up as a quality investment – i.e. reasonable return on investment via rent and potential capital value.
It’s important to note that DomaCom is only looking to facilitate the purchase of the land component, not the operating business of an agricultural or pastoral property. However we look to achieve a return from the business over and above a level of profits received by the business by way of sharing in a percentage of the profits of the business in its good years.
Rural property gives us an opportunity to have an active interest in Australia for our own future, and that includes our children.
Speak to your DomaCom accredited adviser, or participate in the following public crowdfunding campaigns for rural property.