Tips to invest in vineyard real estate

Are you a wine aficionado? Do you also love to invest and keep your portfolio diversified? Well then, you might want to think about investing in vineyard real estate. When it comes to making investments, many entrepreneurs abide by the mantra “the key to success in business is to invest in your passion”. Wine enthusiasts could see this as an opportunity to make money with their hobby. You don’t need to be an expert to make a profit, but you do have to know the market.

Over the past few years. We’ve seen lots of investors look for alternatives ways to diversify their portfolios. Bonds and stocks are overrated, and it’s just because they’re risky. Investing in wine has a special allure, because in the event that you fail, you can always drink your bottles.

The challenges and how to overcome them

Wine investing has its fair share of challenges. For starters, you rely on Mother Nature to provide you with the best assortments. And then there’s the storage part. The key is to make sensible choices. Read wine blogs and keep a close eye on fluctuations. Start with Liv-ex, and constantly watch the Robert Parker index. Also, it’s equally important to steer clear of unauthorized auction houses that claim to sell old bottles are very low prices. Consult with an experienced wine merchant to help you make sensible decisions.

Start small

A great place to start is to invest in a microplot. Co-founder of the acclaimed Vines of Mendoza, Michael Evans, welcomes investors to purchase their own vineyard. You can buy anywhere between 1 and 10 acres of wine land. After you make the buy, his team will handle the farming part. Basically, you only get the raw product and you don’t have to worry about anything else. You can either have the wine bottled and prepared for storage, or drink it. The good news is that you don’t have to worry about farming chores.

As far as price is concerned, Vines of Mendoza costs between $100,000/acre and $800,000. On average, investors buy about 3 acres. The price varies in time. For this amount, one microplot can make between 6,000 and 12,000 wine bottles. If the amount seems too much, you should know that in Napa Valley, for $150,000 you get 1/5 wine barrel and some insights into the wine-making process.

Only invest in what you can afford of lose

Smaller investors who don’t have $100,000 to spare, should stick to $10,000. It’s best to invest in what you can afford to lose. Wine may not seem like the most trustworthy form of alternative investment, and since there are risks associated, you should play it safe; especially in the beginning. Grade wine can become a valuable commodity, however for your investment to pay off you need to wait about 5 years.

If you’re new to wine investing, it’s smart to stick with renowned wines, such as Bordeaux wines. It is your best bet that your investment will pay off. Look for provenance and certainly before making a final choice, choose wines with a proven track record. For example, some of the best are first-growth Bordeaux. Mouton Rothschild, Margaux Latour, Chateau Lafite, and Haut-Brion are ideal choices.

Over the past few years, Rohne and Burgundy varieties have also performed pretty well. If you’re a fan of Italian investment grade wines, Super Tuscan wines are the best: Tignanello, Sassicaia, and Ornellaia. Keep in mind that it’s always best to invest in wines that you can actually afford to buy. Also, don’t forget about storage. Proper storage conditions will make sure your cases are kept safe for an extended period of time. On average, be prepared to pay about $18/case, per year.

Constant price check

Do a check on the price constantly, and remember that fluctuations are normal. When you’re all set to buy, spend some time shopping around and check for the best offers. Visit wine-searcher for more information, or Liv-ex; these are global markets with extremely precise price ranges.

We know that it’s fun and thrilling to buy wine and invest in vineyard real estate. But it’s very important to take things one step at the time. Quality and provenance are of the utmost importance.

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