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Farms, Vineyards and Ranches See Boom as
The land is fertile for vineyards in Porto, Portugal.
Farms, Vineyards and Ranches See Boom as Working Properties
the last few years have seen high-net-worth buyers
search out spacious properties on larger plots of land. Now some investors are taking that a step further, seeking a deeper connection to the outdoors, by purchasing sprawling working properties like vineyards and farms.
Taking perhaps a cue from Bill Gates—who as of 2020 became the largest private farmland owner in the U.S.— these individuals are investing in working properties ranging from horse ranches in Colorado to vineyards in Portugal’s wine country.
They come looking for a home that allows them to pursue their passions 24/7—whether that’s organic farming, horse breeding or wine making—while earning returns on their investments.
“There’s been an enormous increase [in these kinds of investments] starting during Covid-19 and still lasting,” said Marcus Benussi, managing partner and general counsel of Berkshire Hathaway HomeServices MAGGI Properties Agency in Italy. “Germans, Americans and Brits are seeking farms in different areas than what we were used to seeing in the past. Most of them are deeply engaged and focused on bio-farming, renewables, and cow and horse breeding.”
Portugal, too, has seen a dramatic uptick in interest from overseas buyers recently. The number of Americans living in the country has increased by 45% over the past year, and the Portuguese government estimates international buyers have sunk $6 billion into property investments since 2012.
Working properties, particularly vineyards, hold special appeal.
“We have some beautiful estates and fantastic wineries, and the land is very fertile. It’s like the California of Europe,” said Michael Vincent, CEO of Berkshire Hathaway
Farms and ranches offer space, an opportunity to explore hobbies—an even a potential income.
HomeServices Portugal Property. “We’ve seen a massive influx of Americans because they spot that.”
And in Italy, many international investors buy working properties with an eye toward converting them to income-generating destinations that will attract tourists.
“Many foreigners look for properties that might have a long or medium-term return on investment if transformed into boutique bed and breakfasts or small relais [countryside hotels],” Mr. Benussi said. “The best business models of these investors are often in combination with services such as smart-working amenities, car or scooter rentals, and concierge services, which is exactly what tourists are looking for. So, the incredible phenomena in many areas is that many foreigners are hosted in properties in Italy, by foreigners.”
Savvy buyers of working properties in Portugal, too, are turning a profit on the fruits of their labor. Mr. Vincent cited a client who purchased a vineyard in the wine-producing Douro Valley, where he can export wine to the U.S. for as much as three times as what he could sell it for domestically. There are other perks as well. Portugal’s Golden Visa program, for instance, confers residency, and, within five to six years, Portuguese citizenship, on foreigners who invest at least €280,000.
The long-term outlook is positive for such investors, due to the relatively slow pace of new development in Portugal.
“There’s no over-build of properties, and no high-rises,” Mr. Vincent said. “Things take time, but when you buy something, it has value.”
In the U.S., Aspen, Colorado, has long been a destination for wealthy buyers looking to invest in working properties. Because of the city’s elevation, there are no wineries; instead, land is used for farms, cattle ranches, organic gardening, and more recently, polo grounds. The region tends to draw buyers who come not on impulse, but as a result of long-range planning.
“Here it’s not so much the couple who leaves the city and decides to do organic farming, because the entry price is steep,” said Brenda Wild of Berkshire Hathaway HomeServices Signature Properties in Aspen. “People purchase sanctuaries here that are often held as familytrust pieces.”
Investing in any working property comes with many additional considerations; prospective buyers should consult with local experts who can guide them.
“I ask a lot of questions about the buyer’s goals,” Ms. Wild said. “What’s your vision? Do you want to come here and raise Kobe beef, or have a polo field, or create a family compound? Going from there, what are the views, the building rights, the water rights and the agricultural status of the property?”
For those buying in a foreign country, understanding the local tax structure and working with an attorney is key. These additional requirements don’t seem to be deterring international investors, Mr. Vincent said.
“Things are the busiest they’ve ever been, with a huge influx of buyers,” he said. “The best time to buy was yesterday.”
MICHAEL VINCENT
CEO Berkshire Hathaway HomeServices Portugal Property
