Investing in a farm in SA now.(non political discussion!!!)

[Swartbok]

Swartbok, while that is a great area, I am of the opinion that property prices are over inflated there. Prices run at R10 000 to 12 000 per ha.

Have a look at this, in the Kenhardt area:

https://homes.mitula.co.za/homes/kenhardt

Prices below R1000 per ha.


The difference in carrying capacity doesn't make up for that difference in price.


C

Ja, not bad, but those are beeeg farms.
10 000ha. You’re going to need a couple of guys and maintenance material to run that place which translates to increased costs. It’s 10 000 ha worth of work.

I’m already in the Vaalwater area for a while now.
For me, it’s 2hr drive from Pretoria. In the heart of game animal territory, including the exotic type stuff. Therefore closer to the market, for game and cattle.
Remember transport is a big cost, in moving stock from your farm and also supplies etc. to your farm.

More of a weekend style place that can be run by less workers.
It’s close enough to Warmbaths, Nylsroom, Vaalwater etc. which is beeg area for Game and cattle auctions.
More rainfall also equals increased opportunity to plant feed, thereby increasing your carrying capacity.
You’ll have to manage what you buy to the best of your ability.
Yes it is expensive, but I’m under no illusion that farming activity alone will pay off capital and costs in a short time. (in general I think it’s very difficult to pay of land capital costs in a short to medium time frame with any farming) However with a bit of luck and if the market picks up again it might be very possible to make up costs and some profit. I think it’s why farming is a generational thing (long term).

If it’s pricey to buy it’ll be pricey for the next buyer to buy, also in times like these it’s usually the pricier items whose prices get slashed the most. With the travel and tourism industry (unfortunately) down and out at the moment you might likely find cheap stock to start off with.

For me however it’s about the bush and animals and not profit, but if I get a bit I appreciate it.
On top of that my place is situated next to a pass which was used by the Voortrekkers during the Great Trek and other historical events, so there’s a bit of history and good stories in there too. Lovely to tell while sitting around the fire and listening to the nightlife.

It all depends on what you want.

[Fransw]

One thing is forsure we have a very beautiful country with many many awesome areas, from desert to rainforest. No country in the world can offer what we have.

I love the Kalahari area as well as the savanna Bushveld of Thabazimbi, Vaalwater, etc..

[Swartbok]

One thing is forsure we have a very beautiful country with many many awesome areas, from desert to rainforest. No country in the world can offer what we have.

I love the Kalahari area as well as the savanna Bushveld of Thabazimbi, Vaalwater, etc..

Very true, every part has its own different beauty, just depends on your own cup of tea.

[Mouser]

As Swartbok says; you have to be very organised or lucky to get a decent return on your investment; in many cases that is not why you farm. I had the numbers run by an experienced agricultural economist and hardly believed them but time has proved them to be true as, in my area, dairy etc, you have to go big and more intensive to make a decent living. Don't under estimate the cost of infrastructure; fencing particularly on those big farms.

But, pick carefully, adjust expectations, and it can be a great life experience, lifestyle, neighbours and being close to the earth.

[C Africa]

Swartbok,

I have no argument with what you say. I myself was part owner of a game farm near Swartruggens. It was 180km from my driveway to the farm and during the four or five years that we owned it, I was there almost every second weekend, it is a GREAT lifestyle if you still have a job in the city and don't have to rely on the farm for an income.

The reason why I mentioned the lower prices in certain areas:

To buy a 1000ha farm in the Bushveld, will set you back between R10 and R15 million today.
For less than R5 million, you can buy a 5000ha farm in the Bushmanland, bo-Karoo area.


Obviously the Karoo lifestyle is not everybody's cup of Tea, but I love it!!!

@ Mouser: When the economist did your sums for you, did he factor in the way the value of your land increases? they usually fail to do that, have been warning for years that farming is not economical, and the farmers all still laugh all the way to the bank.

Farm land has grown consistently at significantly above the inflation rate for 50 years now, and is still growing. So even if your farm does not make one cent of profit, it is still a good investment.


C

[Swartbok]

Swartbok,

I have no argument with what you say. I myself was part owner of a game farm near Swartruggens. It was 180km from my driveway to the farm and during the four or five years that we owned it, I was there almost every second weekend, it is a GREAT lifestyle if you still have a job in the city and don't have to rely on the farm for an income.

The reason why I mentioned the lower prices in certain areas:

To buy a 1000ha farm in the Bushveld, will set you back between R10 and R15 million today.
For less than R5 million, you can buy a 5000ha farm in the Bushmanland, bo-Karoo area.


Obviously the Karoo lifestyle is not everybody's cup of Tea, but I love it!!!

@ Mouser: When the economist did your sums for you, did he factor in the way the value of your land increases? they usually fail to do that, have been warning for years that farming is not economical, and the farmers all still laugh all the way to the bank.

Farm land has grown consistently at significantly above the inflation rate for 50 years now, and is still growing. So even if your farm does not make one cent of profit, it is still a good investment.


C

No argument at all. I was just pointing out a few things to think of, like you’ll get a bigger farm, but therefore have higher running costs for as long as you own it, and I also understand everyone has a budget.

If I could afford a R10mil farm, I would personally only buy a R5mil farm. A farm, especially in the beginning is a deep dark hole where money disappears.

Also when I enquired those years back, a bank would only loan you 50% of the value to be paid back over 10 years max. at a very high interest rate. There’s no way in my opinion that you can farm that amount of money. So you end up buying cash, or making bank payments from other money. I’ve come across some people who don’t think about all these things, but it seems you are, so good.

It’s something I am very glad I did and it’s very close to my heart. So in my opinion, worth it if you have the bucks. You can make decent return but over long term, through different means, as you mentioned property value increase, or lots of luck and perfect management.

Kinda like an aviation career.

[Swartbok]

In line with what Mouser said, You also need to think about infrastructure affecting the price. Roads, fences, waterlines, dams etc.

If it’s not there then you’ll have to install on your own cost for the type of farming you want to do, time and money.
If it is already there the purchase price will probably be higher.

I’m just naming a few things I believe you should consider (maybe you already have) no matter which area you decide to buy.

All of them have pros and cons, you’ll have to decide what/where works best for your needs.

Good luck, I hope you find a good deal.

[Fransw]

Swartbok,

I have no argument with what you say. I myself was part owner of a game farm near Swartruggens. It was 180km from my driveway to the farm and during the four or five years that we owned it, I was there almost every second weekend, it is a GREAT lifestyle if you still have a job in the city and don't have to rely on the farm for an income.

The reason why I mentioned the lower prices in certain areas:

To buy a 1000ha farm in the Bushveld, will set you back between R10 and R15 million today.
For less than R5 million, you can buy a 5000ha farm in the Bushmanland, bo-Karoo area.


Obviously the Karoo lifestyle is not everybody's cup of Tea, but I love it!!!

@ Mouser: When the economist did your sums for you, did he factor in the way the value of your land increases? they usually fail to do that, have been warning for years that farming is not economical, and the farmers all still laugh all the way to the bank.

Farm land has grown consistently at significantly above the inflation rate for 50 years now, and is still growing. So even if your farm does not make one cent of profit, it is still a good investment.


C

No argument at all. I was just pointing out a few things to think of, like you’ll get a bigger farm, but therefore have higher running costs for as long as you own it, and I also understand everyone has a budget.

If I could afford a R10mil farm, I would personally only buy a R5mil farm. A farm, especially in the beginning is a deep dark hole where money disappears.

Also when I enquired those years back, a bank would only loan you 50% of the value to be paid back over 10 years max. at a very high interest rate. There’s no way in my opinion that you can farm that amount of money. So you end up buying cash, or making bank payments from other money. I’ve come across some people who don’t think about all these things, but it seems you are, so good.

It’s something I am very glad I did and it’s very close to my heart. So in my opinion, worth it if you have the bucks. You can make decent return but over long term, through different means, as you mentioned property value increase, or lots of luck and perfect management.

Kinda like an aviation career.

Very good advice! ...I think the same should apply for buying other "luxury" things like aircraft, cars, etc..

[Marius Schrenk]

So anyone care to name one of
If you would buy in a "less murderous" area as defined,you would have to buy BIG or else you would not make it financially.There are irrigation areas in the said areas but then you are right back to square one in terms of people concentration and crime.It is also not as romantic as it sounds to live 160km away from the nearest town (of which most might be dirt road and the rest badly maintained) You need a very special partner to do that...and except your children would be in boarding school from 6 year old on....or worse....you would be homeschooling.

Not a problem for the weekend/hobby "farmer" with a couple of animals and a Schrenk buffel or two..

Frans somewhere in a previous live I used to be a "part time farmer" There is nothing more frustrating.Phineas on his own can never keep the maintainance up to date. You end up using every weekend to try and fix everything. In the end nature wins...and the romance fade.

[Sunbird]

I used to be a weekend farmer.
Now I’m a farmer thanks to the madness.
It’s hard work.

[Marius Schrenk]

Its a longterm commitment.Like someone above said in many cases you plus minus break even. The only real profit is in the longterm growth of the land value...and the lifestyl.Land value depends much on politics......

[Fransw]

Its a longterm commitment.Like someone above said in many cases you plus minus break even. The only real profit is in the longterm growth of the land value...and the lifestyl.Land value depends much on politics......

Of topic: What are the regulations on keeping buffalo? ...and can a buffalo be tamed like an impala for example? Just questions to burn some covid time..

[Marius Schrenk]

The farm needs to be registered at veterinary services(used to be a WR no).Normal 21 strand gamefence inspected by invironmental affairs. All buffalo moving in or out needed to be tested for Foot&mouth,corridor,Tb,Brucella. All movements by double permits from both Invironmental aff and State vet. No domestic animals allowed on the same farm. You need to stay away from Bluewilde beasts as they carry "snotsiekte" which might kill buffalo.Tests per animal plus minus R10 000 each. They get very tame but see you as a sparing partner.....if your a not a good one and by excident bleed a little....they smell it and your adrenalin.....your family come and kill them in revenge for them winning the sparing match. Your wife collects on your insurance... and get a new younger version....

[Fransw]

The farm needs to be registered at veterinary services(used to be a WR no).Normal 21 strand gamefence inspected by invironmental affairs. All buffalo moving in or out needed to be tested for Foot&mouth,corridor,Tb,Brucella. All movements by double permits from both Invironmental aff and State vet. No domestic animals allowed on the same farm. You need to stay away from Bluewilde beasts as they carry "snotsiekte" which might kill buffalo.Tests per animal plus minus R10 000 each. They get very tame but see you as a sparing partner.....if your a not a good one and by excident bleed a little....they smell it and your adrenalin.....your family come and kill them in revenge for them winning the sparing match. Your wife collects on your insurance... and get a new younger version....

Minimum land size?

Edit: like the guy who got killed by his "pet" hippo. He was even on CNN with his adorable little hippo, playing in the water riding on the animals back.....

[Marius Schrenk]

Minimum ha depends on the province. In Limpopo it is 400ha.