The opportunity
Agricultural land investment
Looking for a safe investment that pays high returns?
Then consider quality farmland in Eastern Europe. The area we offer has high quality land that is selling for much less than in Western Europe.
And there’s one country in particular that ticks all the boxes for a great investment now. Bulgaria. Apart from having some of Europe’s best farmland, it is now receiving millions in EU farm subsidies.
The timing is perfect to invest in Bulgarian land now. World food commodity prices have been going sharply up (as shown in graphs below) as more people with more purchasing power compete for food supplies which can’t keep pace with demand.
Since the year 2000, farmers across the planet have managed to boost their production of wheat, rice and feed grains by 16%. But, the problem is that during that same period global demand surges 20%
Food reserves are dwindling and the world is sitting on the smallest supply of surplus corn in 37 years. One bad harvest in a major producer like America, or a spread of the political upheavals taking place in the Arab world and prices will soar even more.
These higher prices are attracting massive investment into farming, which will is lighting a fire under the price of good quality farmland. The time to act is now.
A hedge against inflation
The response by the U.S., U.K. and number of other governments to the financial crisis in 2008-09 was to bail out the Banks and keep spending. The politicians couldn’t stomach the unpopularity that a short but severe economic crash would bring. They preferred to kick the can down the road by borrowing heavily and printing money.
As owner of the world’s reserve currency, the U.S. has got away, so far, with printing over 1 trillion in fake money. Much of this cash has flowed into stock markets and commodities across the world, inflating prices. In the case of food products, this stimulus on top of the growth in real demand from emerging markets sets the stage for some serious inflation.
Farmland is going up in price in many countries. But Bulgaria with the added support of EU subsidies and easy access to markets is set to really experience land price infaltion.
Let’s have a look at the fundamentals behind the real profit opportunity in quality and well located farmland.
The perfect storm for agricultural land
There is a convergence of some major economic and social trends that is pushing up farmland values. Firstly, the obvious impact of around 80 million new mouths to feed a year, as the world population surges. In areas strongly affected by this growth, such as the Middle East, governments there are already scrambling to secure future food supplies.
The other big trend is in the greater purchasing power of the massively growing middle class in countries like India and China. These hundreds of millions of new consumers want more meat and premium products, which is translating into sharply rising food commodity prices. The graph below shows how the price of one of the most important food commodities. You will notice that the price rocketed in 2007, only to be depressed by the recession. But in late 2009, the upward trend continued and the price rose sharply.
The same happened to wheat and other main food commodities. The long term trend is clear – UP.
The graph below shows the various factors behind food price increases, from rising population mentioned above, to smaller but significant trends such as tasking of agricultural land to grow bio fuels.
This steady increase in food commodity prices has had the effect of pushing up farmland prices in many countries. The biggest wheat producer, the USA, has seen strong increase in land prices right through the recession, at about 10% a year. The graph below shows prices for American farmland as a whole. In some localities prices have doubled in the past 3 years. And this during a period when residential property prices collapsed!
As Good as Gold!
A lot has been heard in the media recently about the big increase in the price of gold. What many may not realise is that quality farmland in main producers, such as the USA, has kept pace.
The graph below shows how both food commodities and gold have almost mirrored each other, more than doubling since 2007.
Whilst the future of gold prices is uncertain, the trends backing food prices are very clear and powerful, as detailed above. World population isn’t going to stop growing and people stop eating. This makes investing in agricultural land a solid investment.
And it’s not just gold that Farmland performs well. The graph below shows the return that can be expected from Bulgarian farmland as against other investments. Please note, through sourcing the best value farmland for the investor and keeping management costs down, agrilandsales.com can make sure returns are as this graph states, namely around 6.5%.
Why Bulgarian farmland
It’s no doubt easy to find cheaper land in places like Brazil, but such places don’t have the safety and advantages of agricultural land in Bulgaria.
Situated in South East Europe, this country benefits from ideal growing conditions. Long warm summers and good rainfall.
More information on growing conditions is in the main menus section, “FAQ”
Here are the key benefits of purchasing Bulgarian farmland for investment:
Advantage 1: In a stable, European country which is a member of the European Union and has excellent distribution links from the area we offer.
Advantage 2: Agricultural subsidises now being paid to Bulgarian farmers, on a scale which should equal other EU countries by 2014.
Advantage 3: Low cost farmland purchase and reliable farm management, offering return of 6.5% a year, NOT including very substantial capital value increase.
Advantage 4: Bulgaria has the lowest taxes in Europe. Even lower than Cyprus. Income tax, for example, is a maximum 10%. Not surprisingly, the country is becoming a magnet for investment.
Time is short!
The recent confirmation of EU subsidies has made local farmers think twice about selling, pushing up selling prices. Add to that, the ending of recession in Bulgaria and growing realisation form investors of the opportunity there and it’s not difficult to see how prices will push on upwards.
In fact, they are going up on a weekly basis – we talk to farmers all the time and can see the growing demand and ability to pay higher prices. We see Bulgarian farmland really booming in price over the next few years.
The “How to Buy” section of this website will detail the straightforward steps to purchase Freehold farmland that comes with an income of around 6.5% per year, and that’s without considering the increase in land values.
In 2011, so far, our investors have made 5% income in 8 months + 22% capital land value increase.
That’s 27% total return and the year has 4 months to go!
This is on track for around 35% annual return and we see no reason why this shouldn’t be repeated for the next couple of years at least.
Join our happy clients
Investment in Bulgarian farmland suits all types of investors. Large or small, old or young. It’s open to everybody. In fact, here’s a case history of a recent investor who is only 15 years old!
The parents of George, a UK resident, wanted their son to have a solid investment that produced higher returns than the pathetic 2% he received on his savings. This was even less than inflation in their country, which is around 5%, meaning the value of the boy’s hard saved money was actually going down!
Image of first page of Property Deeds and Skitsa above
George had 5000 Euros to spend and he selected a hectare field near Kavarna on the Bulgarian coast, in the rich Dobrudzha farming area. The local agents, Blackseavillas.net, set up a Bulgarian company at a cost of 275 Euros in the name of Georges’ parents and arranged for the conveyance of the Freehold land into this company. When George is 18, his parents will transfer their shares in the company to him.
Income in the first year is 300 Euros a year (6%), rising to 450 Euros next year (9% on original investment).
The increase in rent is due to the fast increase in the capital cost of the land, which is on track to rise 50% in the first year.
So, instead of losing about 3% a year on his UK Bank savings, George is earning about 56% (rent and capital growth) in one year, and should continue to see strong capital and rent growth over the coming years.
(Clients visiting our offices in Balchik are welcome to see the land purchased. Our thanks to George and his parents)
You too can earn returns like this.
An opportunity that’s SAFE and brings a HIGH RETURN
