Putting your money in real estate seems to be a sound decision because real estate land properties only increase in value over the years. However, it can also be overwhelming to choose among which real estate properties your investment would yield the best returns. Nevertheless, you may want to consider an equestrian farm land, which proves to have several advantages in terms of your money’s worth.
High Level of Capital Security
The real estate market may experience downturns time and again. However, an equestrian farm land is less likely to depreciate in value because historical data shows these farm lands unveiled strong capital protection characteristics over a long period of time. Additionally, a well-managed equestrian farm land can be considered as a perpetual income generating asset because it is a fully-renewable resource.
An equestrian farm land can also provide a stable income to an investor. More often than not, the rates of income rise above five percent annually. While this may not prove to be the greatest rate of revenue in terms of the real estate market in general, this rate is sustainable and consistent. Laas Equestrian Real Estate even stresses out that an equestrian farm land also provides a place for recreation, training, and exercise for an equestrian athlete, making it a productive capital investment. In addition to this, an equestrian farm land tends to have a hundred percent occupancy rate regardless of the current economic environment.
Apart from a stable income, the revenue generated for an equestrian farm land may be considered non-volatile. With a hundred percent tenancy condition, there is a smaller chance for a property owner to encounter shortfalls in terms of income and revenue. Apart from this, the long term lease also protects an equestrian farm land owner from the volatility of other commercial investments.
The revenue from an equestrian farm land comes not only from the rental income, but from the total appreciation value of the asset itself. Thereby, it can be deemed that an investment made in an equestrian farm land may yield a high total return. Historical data shows that farm lands in general outperformed other mainstream investment vehicles such as those made in the stock market and even those in commercial real estate.
This may not be restricted to a horse farm land, but farm lands in general are known to be an effective inflation hedge. This is because statistical data shows that farm lands have a positive correlation with inflation, which means that the real estate value of farm lands increases faster than the rise in the inflation rate. This makes investing in a farm land more advantageous compared to other investment vehicles. Additionally, this is a great choice for investors who are keen on government policies that significantly affect the inflation rates of a country.
Diversification in Investment Portfolio
As an investor, you may already have several of your money put into investment schemes such as the stock market, mutual funds, and even bonds. Investing in real estate, particularly in an equestrian farm land is a great way or diversifying your investment portfolio. A diversified portfolio is advantageous because it aids an investor to be resilient to the volatility of current market conditions. More often than not, a farm land performs well regardless of market turmoil and uncertainty. This makes it more appealing for investors to seek refuge in investing in real estate, particularly in farm lands in general.
Simplicity of Investment
Investing in an equestrian farm land is generally simpler and transparent compared to other investment schemes, even within the real estate industry. This is because a direct hold of a renewable real estate resource is seldom irregular and complex. In addition to this, investing in a farm land is generally simpler because of the fixed number of farm land properties, unlike other real estate properties wherein the supply in the market can be incessantly increased by building more and more rental properties.
In many countries worldwide, investing in farm lands in general provides certain tax incentives for the investor, in order to attract more and more people to go and put their money on farm lands in general. The tax incentives may include the standard taxes such as the income tax, capital tax, and even inheritance tax. These income incentives provide a greater margin of profit for the investor compared to other classes of assets in the real estate industry.
Factors to Consider in Choosing an Equestrian Farm
With all the advantages coupled with investing in an equestrian farm land, you may already be keen on putting your money into one. But before doing so, here are some factors you may want to consider in choosing the best equestrian farm land suitable for you.
Land Condition. Verify whether the land of the farm is well-drained and fertile by checking the vegetation grown on the estate because this will likely affect the health of the horses reared there. You may also perform a soil test in order to be sure.
Structure. If there are buildings on the farm land, inspect the robustness of the structures in order to have a good estimate on what needs to be renovated or repaired.
Water Logging. It is important to take note of water logging issues in the property because as much as possible, you as an investor should avoid these properties.
Investing in real estate properties may prove to be challenging, with all factors that are needed to be considered in doing so, as well as with the overwhelming types of properties that you can put your money on. In any case, you may want to venture out into putting your money on an equestrian farm land, which proves to have several advantages in terms of maintenance and revenue compared to other real estate properties. After all, an equestrian farm land is an ideal property for you to spend your time as you get older and prefer a more laid back lifestyle.