Income from agistments? Is rural property a worthwhile investment?

[Above Average]

Hi all,

Hoping that someone may be able to assist me.

A vacant rural parcel of land has come up for sale very close to our parents.

It is approx 100 acres in size but with no house on it.

I would love to be able to purchase it but.....it would cost us approx $250 a week to pay the loan at this stage with no rental income due to not having a house on it.

Does anyone know what people pay for agistment of animals?

I am thinking that it could be used for sheep, cattle, horses, chickens etc. There is only one dam.

Any thoughts and advice much appreciated.

AA

 

[D.T.]

Why not build a house on it?

 

[Above Average]

Essentially, because of the cost of building a house!

Yes.....down the track.....but not a financially viable option at the moment.

We currently owe money on our PPOR and 2 investment units. Could not afford to place a house on the land at this stage, hence looking at alternative ways of making income on the property.

Thanks for the reply!

AA

 

[luckyone]

If it's in a busy location then you could possibly get income from letting businesses put signs on your property. Have a search for that if it's applicable.

 

[D.T.]

Why not find a peg that fits in a hole rather than stretching a hole to suit a peg

 

[Above Average]

Great idea!

But.......not really a busy location.

Thankyou anyway.

AA

 

[Above Average]

Thanks Dave,

Appreciate those thoughts also.

AA

 

[random]

You'd probably close to cover repayments in as is form with cattle agistment but it depends on what the land can carry. Will the water last , they drink a lot apparently .
An old bloke with 250 ac's told me he gets $112 bucks per head p/yr. His carries about one cow p/2.5 ac.
There can be good money in horse agistment , especially with 100ac b/c they can ride about without having to leave the property = popular and you can carry a lot .
If you wanted to set it up , it's fairly cheap as compared to a house .
If you did it yourself , say 5-10k depending , divide into say 2 to 4 ac paddocks in rows , sort of horse stud'ish. The more you have the more you make .
Or just throw in horse yards, a few rails & use as a whole or say 2 big paddocks, let them all mix but it wouldn't make make as much.
The damn would need to be at the higher end or you need to set up a tank to gravity feed troughs for smaller paddocks but that's fairly cheap.

I did have 10 acs and a girl leased out 6, at $170pm . Shetlands , which don't eat as much, so it carries more = make income .
That was 5-6 yrs back now though but I did work out at the time that if I divided that section into 6 x 1ac paddocks , put a stable in each, which in some areas you can do without permits , I would triple the income agisting to 6 different owners rather than one .
I can't remember the exact numbers but I also asked around on prices and there was pretty good money in a decent sized place like yours.
Pretend you want to agist a horse and ring a few places up, check rates in the papers .

Cheers

 

[Above Average]

Thanks so much Random.

That is very helpful information.

AA

 

[Gools]

AA,

You have to be very careful not to over pay for the land and you need to have a good future plan for it. Above average land is quite expensive and when you include maintenance, rates, utilities etc more often than not your hiring income will not even be close to having it break even. If you have a future plan for it though that shouldn't be of concern.

If the land is really cheap then you have either got a good bargain or the land isn't verry good and will not support as many animals and therefore reduces your income as well.

I would consider if, with all the expenses, it is worthwhile. Would another IP in the city be a better long term CG provider? You could then use that profit later down the track to by an even better piece of land.

A friend of mine has done a similar thing and just finds the upkeep too expensive and way too time consuming. Please think carefully about it, what you want to get out of it in the long run.

Gools

 

[random]

Yeah good points Gools ! But a lot do just want some acres and there are ways of covering atleast some of the repayments but as you say it does depend.
But I'd agree on a resi house being much better investment wise in most circumstances though & less work.
Another suggestion, in the first yr or two with mine I got hay cutters in . It didn't pay much from memory but 100 ac , if it's spelled and ok land , may be well worth it . You'd have to make a few calls though. You don't do anything , just keeps animals of over the twelve mths & let it grow , they come in & do the lot .

Cheers

 

[Reality Cheque]

About $5-$6 / head per week for a cow/calf unit. About $3.50-$4-00/ head per week for dry cattle. Sheep about 50 cents / head per week.

Bear in mind that you can run about 10 sheep to one steer or 15 sheep to one cow/calf unit.

Rates vary a lot depending on the quality of the country.


RC