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Invest in Land in South America For a More Balanced Portfolio

The Gran Chaco in Paraguay

The Gran Chaco in Paraguay

 The objective for any savvy investor is a more balanced portfolio.

One way to achieve this is purchasing land for agricultural, dairy, and timber purposes.

Of course before one makes the investment there a few important points one needs to consider.

The first consideration is to invest in a country that has a long tradition of respect for private property rights.

This would need to include both domestic and international owners of property. It would also necessitate that the nation in question have a stable economy and political system as well.

Your second consideration is knowing what you are buying. You might have to seek expert advice here so you know you are getting value for your money. The third inquiry should be how you will be able to utilize the property while you own it. This is important because you need to know what infrastructure is available to you in accessing and using your property. For example you could buy some incredibly fertile farmland but there is no practical way to access the property. You also need to inquire will you be able to use the property as intended? To purchase timber land for a good price and then find out that it will be illegal for you to remove any of the trees from the property will be more than disappointing.

Another consideration but an important one is the availability and usage of water.

In other words is there sufficient rainfall for your intended purpose and if not, do you have any water rights? Are you factoring the cost of irrigation and infrastructure if water is going to be in short supply?

Your next objective would be to think about who will manage the property, maintain it, and what costs will be incurred through ownership of your investment. This will more than likely going to be done on a local level. You final consideration is the length of time you want to keep ownership of the property. Are you waiting for the next run up in value or is it a long term investment?

These are the countries that are often considered for investment:

South America

Paraguay —– One of the best deals because of the exceptional low price for agricultural property. Property in the Gran Chaco for example is at bargain basement prices. Land can be had for 50 to 60 dollars an acre but water is not always in abundance. You can also still buy large tracts of land that encompass thousands of acres if you are intending to make a larger investment.

Uruguay—- Used to be an excellent place to purchase property unfortunately the country is moving to pass legislation to bar foreigners from this activity. The farm and ranch land was of excellent quality.

Land is still being advertised for sale and the country has a tradition of free market style economics but the direction the government is taking is creating uncertainty. In addition the price is no longer as advantageous as it once was.

An hectare (2.47 acres) is now topping 6,000 dollars U.S. If it is already under production expect to pay several thousand more

Chile—- Although prices are higher here for agricultural land the country has a solid financial situation and the stable political system makes for low risk on foreigners owning property. Chileans have money so if you decide to liquidate your investment there will be a readily available market.

Prices are moving up steadily and in some areas dramatically so you will have decide if you are more comfortable buying land that is not in a prime location for less or pay more for the prime acreage.

Brazil —— Investing here is a bit more complicated. It is best to have local partners that will work with the locals. These are known as LTDA. Be prepared to take a few trips there to finalize the deal.

There are more political, economic and social hurdles here than elsewhere. Laws governing foreign ownership of agricultural land, land for timber, dairy etc. are somewhat in flux at the moment. Patience is the attribute you will need in abundance to settle on the right property here; but many good deals are still available.

Colombia —- I am not recommending purchasing agricultural land in Colombia at this time. If the country maintains the new stability and prosperity that have developed in recent years that could change. The many past disputes over ownership of farmland will also need to be resolved .

Argentina—- A prime agricultural hectare (2.47 acres) in this country will cost at least 5,000 dollars U.S. It is the most expensive farmland to invest in on my list. However, there are still many good deals to be made in many locations but the government has begun to nationalize various companies. Since the government is putting controls on currency and some foreign ownership of businesses I am not recommending an individual investment in Argentina at this time.

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