We’re getting ready to kick off a new real estate investing section of Luxury Latin America. We’ve got an advance taste of things to come here with an interview on farm and vineyard investing in Argentina.
It’s an interview with David English, who lives in Mendoza – the main wine-producing area of Argentina. David advises people on investing in land so they do not lose their shirts and then will be their eyes and ears on the ground to ensure things run smoothly. He is not a real estate agent who makes a sale and then pockets a commission. He works with buyers on a retainer basis to help them make the right choices.
So for all you wine business dreamers out there, how does a vineyard in Mendoza rate as an investment? How long until you start rolling in the cash?
“There is not standard length of time, since each investment is unique, ” David says. “What one has to keep in mind is that the wine industry in particular is quite capital intensive. Returns are low or nil for a number of years, as capital is tied up in wine, barrels, supplies, etc. while the wine is aging, being sold and being developed into a successful brand. All this takes time, and time truly is money. Also, economy of scale is critical with agricultural ventures. Whether one owns a grape farm or a peach farm, the larger the piece of land over which fixed costs can be spread, the better.”