Buying Real Estate Overseas For Cash Flow (And A Better Life)

11Agriculture—Buy Land to Rent to a Farmer

Would you rather own ALL the gold in the world or ALL the farmland?

—Warren Buffett

Post the 2008 crisis, property prices fell around the world, dramatically in some cases. Still, rental yields in many markets worked out to less than our 5% to 8% threshold, even when figured against post-bubble property values. Worthwhile cash-flow rental opportunities, which, until the global property boom reached its peak, had been our primary investment focus, were hard to find.

In 2009, we turned our attention to agriculture. We've always been fans of land and trees. Until this point, though, we hadn't identified a way to earn turnkey cash flow from them.

Agricultural land on which to grow cash crops, fruit trees, grape vines, or timber will always hold value, because the world is always going to need those things. Population growth (the human race is expected to increase by 2 billion people to reach nearly 10 billion by 2050) and limited and shrinking amounts of arable land (the earth has lost a third of its arable land due to erosion and pollution in the past 50 years) are combining to create a global food crisis that is going to grow more severe in coming years and decades, making productive land the ultimate hard asset.

By definition, productive land is an opportunity to produce something of marketable value, meaning, unlike a lot in a development community or a plot in the middle of a commercial district, productive land always retains the ...