Land/house investment in MB

[BBShark]

Hi everyone



I'm a frequent lurker but first time poster. I admire much of the wisdom contained on this board. I have been considering a property investment in Manitoba. I currently live in Ontario. There is a nice sized plot of land with a well maintained 30 year old bungalow on it for sale. The total acreage is over 500. Between the rent from the land and the rent from the house, it has a gross rental yield of almost 9% before taxes.



The soil is good and the house seems to be in decent shape, though it is in the middle of nowhere. I haven't been to see it. My questions are:



1) Is there anyone on this board with experience in land investing? If so, what are their thoughts on this property or in investing in agricultural land in general?



2) Would you ever buy a property sight unseen and then manage it or have someone else manage it from another province?



3) Any other thoughts?



All advice is appreciated. Thanks

 

[Thomas Beyer]

I invest some of my money in SK farmland .. but since I am not an expert others select it, and then manage it ! Soil condition, rain, sloping, soil acidity, road access, distance to silos or cities .. all play a role in the value for farming and it takes years, decades actually to understand what is average, good or great value for certain land parcels. [I am an expert in apartment buildings but have also successfully done land development, single family houses and condos and still own a few .. but due to scale I found apartment buildings a better investment class as it leverages skills, time and money far better.]



This MB farmhouse may be a good investment, even a great or possibly a fantastic one ! But to actually judge that you have to be an expert at it .. or hire someone for a fee.



It appears from your questions, that this expert today is not you although I may be mistaken here. Therefore, if you "invest" in it it is a high risk speculative purchase with a high probability of failure. This is a slower growing, more properly priced balanced real estate market where mistakes will cost you severely, unlike the 1995 to 2007 boom years where many mistakes where easily forgiven due to a fast moving market.



To succeed in any business, incl. real estate a few things have to happen:

a) you have to be an expert in the subject matter .. or you have to hire and pay experts .. and to hire pay experts you need cash and expertise too !

b) you have to be properly capitalized

c) you have to know where/when to start, how to manage while owning s.th, and when/why/where to exit.



How do you stack up on all three for this MB farmhouse deal ?

 

[kfort]

Be sure you investigate the quality of the land thoroughly. I come from a farming background and can tell you that even if the area in general is excellent land, moving one mile in the right direction can leave you with terrible farmland. Where I grew up we are in excellent farmland, a few miles from the northern edge of the land there is alkali soil to no end. Be careful.

 

[2ndstory]

Some agricultural land in Southern Manitoba is considered some of the best and is being purchased by Europeans. 500 acres is a little over 3 quarter sections. You could rent it out easily if it is cultivated and in southern MB.. You would have to do some research into what the land is good for. If not for crops, there's always the hunting angle as well. What community is this property near?



Nik

 

[BBShark]

Thanks for the feedback!