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Why buy farm land in Chile ?

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We have written before at length before why investments in agriculture seem like the no-brainer given the fundamentals of supply and demand. Owning farmland can be comparable to owning physical gold. Thus you should buy as much of it as you can if the price is right.

Farm soils in Chile are incredibly fertile.  Highly productive farmland runs anywhere between $8,000 and $12,000 USD per hectare. By comparison farmland in New Zealand  can cost $40,000 to $60,000 per hectare for similar quality.

What’s more, the production yields are typically as strong… and in some cases, even stronger. The UN Food and Agriculture Organization estimates that Chile’s corn production per acre is 20.13% higher than in the US, and 33.57% higher than in Canada, and the numbers are similar for wheat.

Hands on foreign farmers in Chile suggest the difference are even higher.

buy farm land in Chile What’s more, because Chile is in the southern hemisphere, their harvests are counter-seasonal to those in the northern hemisphere. Supply is tighter when they harvest, which means the price they fetch is higher.

In addition to better revenue potential, labor costs in Chile are much lower. Laborers in the South command wages of just 4-6 dollars per hour, and even a seasoned manager with decades of experience will barely register more than $1,300 per month.

In the US, Canada, and UK by comparison, a veteran farm manager can command $60,000 to $80,000 USD annually.

So in addition to achieving optimal revenues, the operating costs in Chile are much lower. Higher revenues. Lower costs. More profit.

And the tax breaks for agriculture here are spectacular. The government allows what’s called ‘deemed income reporting’ for farmers, which reduces not only the tax liability, but also the time and costs of compliance. It’s incredibly simple.

Plus there’s no insane government regulator breathing down your neck, or large multinationals like Cargill mopping up the entire market.

Even if you don’t want to take any operational risks, you can simply buy property and lease it out to another farmer, achieving yields of between 6% and 11%. Residents of Chile can also obtain low-interest financing, so you can mitigate your risk while generating a superior cash on cash return for doing absolutely nothing.

And for foreigners, it’s incredibly easy to become a resident in order to obtain financing on agricultural property.

Bottom line, if you believe that out of control money printing and world population demographics will contribute to significant food price inflation in the coming years, owning farmland is one of the smartest investments you can make.

And, taking into account all the factors– price, production, operating risks, etc., conditions here in Chile are ideal.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

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About Gateway to South America

Gateway to South America was established in 2006 as a single office in Buenos Aires. The company has since expanded into a vibrant regional network, servicing the Southern Cone clients in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay with professional real estate marketing services. If you enjoy reading our news site please share it on your social media below.

Post available in: English

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