What options are open to someone wishing to make an income, or partial income from lifestyle property and what should be taken into account when looking to buy?
Bayleys offers a number of choices – as part of its country sales business it markets established olive groves, vineyards and orchards, as well as properties that could potentially be used for cropping.
Mark Pringle , of Bayleys Rangiora, says a prospective purchaser should assess the physical characteristics of the property and what sort of activity it might be capable of supporting.
“Consideration of soil types and their suitability for the proposed crop, contour, susceptibility to frost, rainfall, sunshine hours and prevailing winds should all from part of the due diligence on a property.”
John Hoare , of Bayleys Marlborough, who specialises in selling vineyard properties says developing a bare land section for viticultural use can be a costly but potentially lucrative exercise.
“In Marlborough, for example, the cost of developing an eight hectare block into vineyards (over and above the cost of the bare land) is approximately $35,000 per hectare. When developed and fully operational, the vineyard will produce a gross income of around $25,000 per hectare per annum. Even factoring in the per hectare cost of management for an absentee owner - $7,000 to $7,500 annually – vineyards can show their owners healthy returns. A fully producing eight hectare vineyard, with or without a residence on site, could potentially produce an income of $200,000 (plus GST) per annum.”
Mr Hoare says vineyards are very popular, as they offer opportunities to supply existing wineries, or market and sell wines under the owner’s own label. For older couples who may not want the burden of “breaking in” the land, existing vineyards with a supply contract and a nice home are an attractive option
John Hoare offers further practical advice:
“Purchasers should be wary of joint water supply systems and arrangements with neighbouring properties that are not fully documented or professionally managed, covenants placed by the previous owner, or the council, on the title and the existence and maintenance of joint driveways or access roads on the property.”
Overseas purchasers should also familiarise themselves all requirements pertaining to Overseas Investment regulations, says Mr Hoare and seek legal advice from firms experienced in applying for overseas investment approval. Approval is required for the purchase of rural land over five hectares and for some waterfront land.
Other lifestyle property articles by Bayleys
Buying a Lifestyle Property
Farm Parks Lifestyle Property
