Turning milk profit into property investment
Commercial property is a good investment that can help farmers with succession planning, securing wealth for future generations.
On the back of a strong milk price, many farmers with good cash returns this season may be looking for off-farm opportunities to invest their money.
Owning a premium commercial property is an ideal investment but can be hard to achieve on your own. Aside from the multi-million-dollar price tag, the due diligence and nous involved in choosing the right building in the right location, plus the ongoing commitment of managing tenants, means it’s an investment that farmers may discount.
But Classic Collectives provides a transparent, safe and easy way to get involved in large-scale commercial property investment. Director Owen Cooney says it’s an excellent option for farmers to generate off-farm income and secure their future.
“I formerly worked at a law firm in Tauranga and had some large dairy farming clients. Farmers are alert to the concept of off-farm investment playing a role in succession.
“We work with several rural accountants who are happy that their farmer clients have not got all their eggs in one basket.”
Classic Collectives provides access to premium multi-million-dollar commercial property investments using a bespoke model. A group of eligible* investors are brought together to buy a first-class asset they would otherwise be unable, or unlikely, to purchase on their own.
“There are other investment opportunities, but we think commercial property is a pretty darn good one.” – Classic Collectives
The experienced Classic Collectives team does all the hard work for you, hunting out high-quality properties across New Zealand, finding reliable national and international tenants, and taking care of all the bank financing, lease arrangements, financial reporting, and ongoing day-to-day administration.
“Commercial property is a passive investment that provides a monthly income and capital gain over time,” Director Daniel Watkins says.
An additional benefit of commercial property is depreciation, which Daniel says a lot of farmers will understand.
Classic Collectives invest in a wide range of commercial and industrial properties, along with medical facilities. Ideal investment opportunities include A-grade tenants who are resilient and reliable, recession-proof industries, favourable lease terms and low-risk profiles. Most leases are long-term (10 years+) and include fixed growth through varying rent review mechanisms.
“Most modern leases have built in growth so over a period of time, the cash and capital gain return increases to a reasonable extent,” Daniel explains. Owen says farmers should bear in mind that property is a medium- to long-term investment.
“There are other investment opportunities, but we think commercial property is a pretty darn good one. Farmers who are looking for somewhere to park their profits should get in touch with us today and see how Classic Collectives can help grow their future wealth.”
Visit classiccollectives.co.nz
