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  Canada Immigration Forum > About Canada > Real Estate & Mortgages > Investment Opportunities in Farmland
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Investment Opportunities in Farmland




Farmland prices have already gone up on account of rising food costs. However, investors say it is still undervalued as the long term fundamentals for agri-business look good.

Is it another dotcom bubble in the making? Investor Jim Rogers seems to think otherwise.

I live in Toronto. However, I do not like to be chained to my investment and would like to travel wherever my work takes me. In other words, I am lookiing for mobility for personal and work related reasons. Is it possible to make investments in farmland without losing your ability to move?

Are there any "investor clubs" that specialize in investments in farms? Personally I don't see myself tilling the land as I know nothing about farming. I am however vary of leasing the land. Property disputes, while not as bad as in india, can get nasty in Canada.

What is your take on investing in farmland in Canada? Can somebody give me the ball park figure for a small piece of land near Toronto? Just trying to figure out the economics behind such investments.



Thanks in advance.


 
elmer fudd

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Post ID: 181536 06-04-11 15:55:12
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ashedfc
Senior Desi
Member since: Jun 10




Posts: 2153
Location: GTA


True, Farmland is probably the best investment for the next decades. Food is the cheapest commodity in a century & its not going to continue for long.
Infact Jim Rogers is on record saying "Farmers will drive Maserati & bankers of Wall Street will drive Taxi"

The problem with Farmland is the headache os actual physical involvement. We as investors always look for opportunity to multiply our money without taking the pain of farming.
Here is something which can be done from your computer/iphone, which keeps you in the farmland game...
NYSE-MOO its the closest replica of agribusiness/farmland ETF, it gives you liquidity & you can go margin with options (call/put) & you can also hedge your position.



 
Post ID: 181537 06-04-11 18:05:19
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dudewheresmycar
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Member since: Jan 07




Posts: 980
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Farmland is hard to find in gta , but in barrie and further north u could get a few acres for 90K, but a farm is worthless if u cant maintain and run it..

And yes as the other poster said it is a lot of work..
Crops are Dependant on weather which is a risk i dont think most investors like
I think Oil and Energy is still the sector to be in rather than farming which is a risky business..
today food prices are directly related to Oil prices mostly because Oil is the basic means of transportation and natural gas is one of the inputs for generating fertilizer.

Quote:
Originally posted by elmer fudd

Farmland prices have already gone up on account of rising food costs. However, investors say it is still undervalued as the long term fundamentals for agri-business look good.

Is it another dotcom bubble in the making? Investor Jim Rogers seems to think otherwise.

I live in Toronto. However, I do not like to be chained to my investment and would like to travel wherever my work takes me. In other words, I am lookiing for mobility for personal and work related reasons. Is it possible to make investments in farmland without losing your ability to move?

Are there any "investor clubs" that specialize in investments in farms? Personally I don't see myself tilling the land as I know nothing about farming. I am however vary of leasing the land. Property disputes, while not as bad as in india, can get nasty in Canada.

What is your take on investing in farmland in Canada? Can somebody give me the ball park figure for a small piece of land near Toronto? Just trying to figure out the economics behind such investments.



Thanks in advance.




 
Post ID: 181540 06-04-11 20:02:09
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ashedfc
Senior Desi
Member since: Jun 10




Posts: 2153
Location: GTA


Here is something very relevant to farmland investing in an inflationary environment (as we are expecting a storm of money printing in the near future leading to an inflationary spiral)..
http://www.liraspg.com/wp-content/uploads/2011/05/graph.jpg" border="0" alt="http://www.liraspg.com/wp-content/uploads/2011/05/graph.jpg" />


Read source: http://gonzalolira.blogspot.com/2011/05/spg-supplement-is-farmland-smart-hedge.html#more


 
Post ID: 183354 28-05-11 20:33:21
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rdassarm
Junior Desi
Member since: Jun 11




Posts: 20
Location: Toronto


Hi,

I completely agree with the above information. However, I am sure you have heard about the sub-prime crisis, and land is getting cheaper but not in the North-of the Border, because Canada wasnt affected as much as the United States. Real-estate companies grow, usually when the housing market picks up after a recession due to rising interest rates.

If you are looking for a real-estate investment opportunity, I have an offer for you. Recently, I have been able to gather 5+ professional workers and a a class real-estate agent, who are willing to put in sometime and commitment to investment opportunities and make ideas, and we would love to hear your insights as well. We have been able to get deals on prime real-estate in United States, and we are looking forward to investing as a private company. Our goal by the end of 5 years is to generate recurring income, through the lease and rental of properties.

We are on the verge of sanctioning a business plan, and would be delighted to hear your opinions and ideas. Please let me know if this sounds interesting to you, and you can send me an email @

Regards,

Rishav


 
Post ID: 183914 16-06-11 17:23:33
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pratickm
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Member since: Feb 04




Posts: 2831
Location: Toronto


Quote:
Originally posted by rdassarm
We have been able to get deals on prime real-estate in United States, and we are looking forward to investing as a private company. Our goal by the end of 5 years is to generate recurring income, through the lease and rental of properties.

Sounds like an awful lot of trouble.
Why not just buy REIT units?
There are many REITs for each sub-section of the sector, like commercial, retail, industrial, residential, etc.
Both in the US and in Canada.

-----------------------------------------------------------------
"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"

 
Post ID: 183924 16-06-11 21:21:18
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Nightmare
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Member since: Apr 06




Posts: 1170
Location:


Quote:
Originally posted by pratickm

Quote:
Originally posted by rdassarm
We have been able to get deals on prime real-estate in United States, and we are looking forward to investing as a private company. Our goal by the end of 5 years is to generate recurring income, through the lease and rental of properties.

Sounds like an awful lot of trouble.
Why not just buy REIT units?
There are many REITs for each sub-section of the sector, like commercial, retail, industrial, residential, etc.
Both in the US and in Canada.



I am no expert in investment ideas. In fact , I admit I am novice and hence my take may not be accurate. I think REIT, while providing a good yield is prone to price collapse, especially if interest rates go up and thereby discounted cash flow would be much smaller. I would appreciate if one can provide me with good REIT companies with less than 10 P/E ratio.


 
Post ID: 183926 16-06-11 21:34:04
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pratickm
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Member since: Feb 04




Posts: 2831
Location: Toronto


Quote:
Originally posted by Nightmare
I think REIT, while providing a good yield is prone to price collapse, especially if interest rates go up and thereby discounted cash flow would be much smaller.

The exact same factors would apply to investment properties that you buy on your own.
As we all know, RE prices in the US have collapsed > 60% and continue to do so.
That affects individual as well as institutional investors.
Similarly, rising interest rates affect everybody.

The advantage that REITs have is one of scale, better negotiation capability and rolling/tiered lease rents.

Also, the fact that interest rate will rise sooner or later has been well known for quite some time and I'd assume REITs have taken corrective actions, like locking in fixed rates.

Quote:
I would appreciate if one can provide me with good REIT companies with less than 10 P/E ratio.
For REITs, it's not the P/E so much as the P/AFFO ration that matters.
Also, 10 is not a good number.
They need to cover their payouts while keeping payout ratio (as a % of AFFO) within comfortable limits.

I'm not saying that REITs don't have risks...indeed they do, and there have been cases of REIT managements running ponzi-like schemes and or "creative" accounting schemes.
So you have to do your investigation.

Or you can buy a REIT ETF, such as VNQ and XRE, and not have to go through this trouble.

-----------------------------------------------------------------
"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"

 
Post ID: 183956 17-06-11 16:43:17
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Blue_Peafowl
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Member since: Dec 08




Posts: 1350
Location: Brampton, Ont, Canada

Greenhouse or Winery
Greenhouse or Winery is a good investment.

We have worked on it and have gathered some knowledge as well as we have couple of project available.

Let me know if you guys are interested to know. We can always work in group since its required big cash

-----------------------------------------------------------------
'Some goals are so worthy, it's glorious even to fail.' (Param Vir Chakra awardee Lt. Manoj Pandey)

 
Post ID: 184009 19-06-11 23:12:32
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rahul_singh23
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Member since: Apr 05




Posts: 1014
Location:


Is there any ETF, index, portfolio or fund which represents farm land, agriculture, dairy, cattle and supply?

Quote:
Originally posted by Blue_Peafowl
Greenhouse or Winery is a good investment.

We have worked on it and have gathered some knowledge as well as we have couple of project available.

Let me know if you guys are interested to know. We can always work in group since its required big cash



 
Post ID: 184012 20-06-11 03:30:25
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Contributors:
ashedfc(3)  Blue_Peafowl(1)  dudewheresmycar(1)  elmer fudd(2)  EmeraldTaylor(1)  JitBram(1)  Nightmare(1)  
pratickm(3)  rahul_singh23(1)  rdassarm(3)  
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