Farmland Investing

Company I used to work for - SMSF owned the land and rented it to the company owned and operated by the same beneficiary of the SMSF. We had to get market reviews done regularly to show we were charging rent at arms length but there were never any issues and we had quite a few auditors and whatnot look at the arrangement.

I would think living on the property would be a no no as per Willrocks mate above but simply renting the land on an arms length basis to a business you own should be fine unless there has been a specific change in the laws on this in the last year or so.
 
Apparently a SMSF can buy a business premise and then rent/lease the actual business to one of the Trustees or someone who is related to the Trustees. If it is a motel then the Trustees of the Fund can live onsite and operate the Motel as a business as long as a market appropriate rent/lease is paid.

A SMSF can buy a farm, and the Trustees can live onsite.

http://www.google.com.au/url?sa=t&r...poD4DQ&usg=AFQjCNHjYYUeE7tL8LYJuLcVnsKhUTc3SA

Doesn't owning your farm through your SMSF breach this test?
After all, there would appear to be at least a dual purpose saving for retirement and subsidising your accommodation costs by providing you a place to reside in while managing your farm.
In practice this is not a problem, however, it is important to ensure the following are met:
The farming business must rent the farmland at a commercial rent back from the SMSF.
The land being used for domestic or private purposes is less than two hectares and the main use of the farm is not for private and domestic purposes.
The ownership of the farm has to be consistent with your SMSF's written investment strategy.
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And farming will get more and more depressing before it gets better. Good news I suppose if you are looking at purchasing a paddock (as long as you know what you're doin).

Piggeries struggle to make ends meet

While grain growers are celebrating a strong grain market, pork producers are tightening their belts.

Todays for price for APW1 wheat in Brisbane is $315 a tonne, sorghum is sitting at $253 a tonne.

These high prices sit in contrast to pig prices which have been stayed flat for around two years.

The current baconer national average is $2.65 per kilogram according to Australian Pork.

Narrowing margins have hit at a time when piggery running costs are high.
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But surely it has to turn around one day?
 
A chicken shed... u know a large industrial outfit to supply the wholesalers might work. Dunnoh much about them though i believe u buy them like a franchise & get all the supplies & support to run it (new hatchlings, food, vet support). All you have to do is build the shed to their specs & grows the chooks up to size & they'll guarantee to take them off your hands.

Poultry consumption has been steadily rising across the world.
 
One of the Sydney papers yesterday was claiming that if every shopper spent $20.00 per week on fresh fruit and veg (presumably not from The Duopoly) that it would save/create 60,000 jobs in the agriculture sector.
 
Clawhammer said:
A chicken shed... u know a large industrial outfit to supply the wholesalers might work. Dunnoh much about them though i believe u buy them like a franchise & get all the supplies & support to run it (new hatchlings, food, vet support). All you have to do is build the shed to their specs & grows the chooks up to size & they'll guarantee to take them off your hands.

Poultry consumption has been steadily rising across the world.
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I saw this a little while back. Nice little abattoir. Propbably not suited to supplying Baiada etc.

http://www.realestateview.com.au/Real-Estate/wolvi/Property-Details-buy-rural-1691541.html
 
Thanks for all the comments guys - plenty of food for thought here.

As with most things in life, there will be no right or wrong answer here, merely the expert status that comes with the benefit of hindsight.

Throughout my life so far I've always looked at a potentially negative situation and asked "what is the opportunity here?" so quite a few thoughts going through my head.

Zargor :)
 
As with all industries, those that adapt do well, while those that stick with tradition and fail to change struggle and eventually fail.

Chia seems like a quality crop.
 
zargor said:
looked at a potentially negative situation and asked "what is the opportunity here?"
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That's precisely what is going through my head. I haven't read any "good news" agriculture stories at all, so the possibility to purchase a quality paddock that can provide me with enough cash in my retirement improves day by day. A few extra $100 per week is my goal, selling produce at a couple of markets on the weekend. It's not really an investment as zargor initially questioned, it'll be too small scale.

@r0dman - is Chia that hippy stuff?? My wife bought some for work the other week. She thought we could do Chia lattes. Told her I'm not having that turtle-heading hippy shit in my shop and threw it out. What's wrong with flat whites, short blacks and capps? :lol:
 
mmm....shiney! said:
@r0dman - is Chia that hippy stuff??
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Sure is, you can grow it in the desert. Bigger chance of overwatering and killing it rather than underwatering it. Makes a bit more sense than cotton in this country..
 
^ Second the above.

A polytunnel full of raspberries can be a great cottage industry - specially with an Australian climate. Was a good enough earner for me back in the UK...

I'd also recommend other berries, boysenberries and blueberries are good - worth looking at supplying to local restaurants or local sellers - even a roadside stall is a good call - you can pack up and go home when you've sold up. I've made $500+ for 3 hours work including picking time... and they same farming is dead! :D
 
renovator said:
Berries are good money earners even with a small lot . Think of how much you pay for any berries..
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Spot on. Intensive is the way to go.

Land cost is too high and income too unpredictable to get a decent return from broadacre grazing/cropping.

Plenty of intensive enterprises that could earn you a living off 10 acres.

C
 
RhythmDoctor said:
^ Second the above.

A polytunnel full of raspberries can be a great cottage industry - specially with an Australian climate. Was a good enough earner for me back in the UK...

I'd also recommend other berries, boysenberries and blueberries are good - worth looking at supplying to local restaurants or local sellers - even a roadside stall is a good call - you can pack up and go home when you've sold up. I've made $500+ for 3 hours work including picking time... and they same farming is dead! :D
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It's been posted here before, but it deserves another go.

:)

[youtube]http://www.youtube.com/watch?v=f5RrGFBbbSY[/youtube]
 
Yes, farming is not doing well.

As Jim Rogers frequently points out, the average age of farmers in Australia is 58 & similar in the USA. The NY Times recently had an article about the rice farmers in Thailand giving up on farming.

And this may be a good sign that farming is now a good investment.

If you live in northern NSW or SE Qld, one way to take a relatively small stake in farming is to buy a share (at $4,000) in the Organic Farm Share scheme that has been set up by Alf & Marina Orpen. They raised capital in an initial share offering a couple of years ago and with that bought a farm in northern NSW and made a start at getting it productive with a wide range of produce. There is a second share offering currently open (until 30 Nov 2012) whose aim is to raise further capital to invest in infrastructure and operations.

The shares are redeemable preference shares meaning that you can sell your share back to the company at cost. Owning a share gives you a share of the farming company that owns the land and farming business, and will give you the right to visit and stay (for short period) on the farm and purchase reasonably-priced organic produce from the farm. Produce will be delivered regularly to central points within 200km of the farm.

While the main aim of the scheme is to provide shareholders with a secure supply of healthy food, there may also be dividends and capital growth in the share in future.

Alf and Marina are giving a series of "Kitchen Table Talk" presentations around Brisbane and the Gold Coast to explain the scheme and answer questions. See the "What's Happening" link on the web site.

I don't have a share in this (yet) but have looked at it in some detail, so may be able to answer questions if anyone is interested.
 
Actually you don't have to invest in farmland to be a farmer of sorts..
I am on a 5 year project to convert my home to a fully sustainable home. We have a 5kw solar panel system running and a solar hot water running as well.
We have used permaculture principles whereby we are trying to produce our own veggies all year around so we can have enough food for our family and our neighbours as well.
I am yet to implement the aquaponics system and a vertical garden to further utilise the uses of these resources.
In the next few years we are also implementing a separate sewer system so we can keep all the blackwater and greywater in the property.

I think stacking silver and gold is great for inflation and for the monetary supply but it won't keep me, my family and my neighbours alive..

If you live in a unit consider building a window farm: http://www.windowfarms.com

It is a very empowering thing to be able to eat what you produce.
 
hiho said:
you could purchase a small farm through your SMSF and lease it to yourself and your wife. The lease payments would go towards the loan along with your superannuation contributions.
Look it up on the net.

In saying that though I reckon youd want to enjoy the simple life from that point on becasue there aint a lot of money in it
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This is my long term outlook actually hiho. I want a plot of arable land simply to sustain and live off for myself and my family looking ahead, hopefully near a reliable water supply and local farming community of like minded individuals.

I know the work would be hard, but IMHO ever more rewarding and the prospect of a life around home, farmer's markets, community, CWA etc has real appeal to myself and my family.

I think the 'value' of arable land in this country is seriously overlooked by the modern population in that whilst it's almost impossible to turn a commercial profit off it's use, in terms of personal use it provides the #1 best SHTF option you and your family could have at it's finger tips.

Whilst debate on city based housing 'investment' is a question for speculators and debtors, I think in terms of maintaining your long term family and personal wealth you'd be very hard to go past quality arable land and a decent PM holding.

I won't need to be 'rich' in this life to be happy, I just need to be independent of the system and life of being comfortable & sustainable, without dependencies on the system.

A family 'hobby farm' with livestock, chickens, vegetable gardens, fruit trees, fresh water supply, bee hives, smoke house, solar panelling and wind generator with a good local community is my personal ideal of paradise - and real security for me and my family.

When you get off the grid, you remove the last component of '3rd party counter risk' in your life - the one that brings almost all of us the most angst and frustration.

I think in the years ahead as the 'system' becomes more oppressive and drives people out of the cities, this ideal will become more mainstream and more sought after than trying to match it with the elite in their rigged market games.
 
True
I do agree with you auspm but i realise that when I am growing my own choy sum, amaranth and all these other veggies it is not as easy. I can guarantee that to you all.

I have been growing the above and more for the last 3 years and it is very hard. It is devastating to see your crops getting eaten away by pest or something environmental.

Even to this day I still need my in laws to give me a hand (as they are farmers from China) so I am able to learn from them.

Farming in a small plot of land or even in an urban environment I find is a skill in itself and if you have no skills or no knowledge about this area you will fail in the first few years :).. I know I did and am still learning.
 
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