Invest in a Vineyard in Argentina

Saturday, April 12, 2008

Read more about investing in international real estate in International Living Postcards—Saturday Edition

Residential prices in Buenos Aires have been rising since 2003. Today, prices for apartments are at an all-time high, and I’d say it’d be foolish to think about buying one from a pure investment perspective. However, B.A. is a market unto itself...and a relatively small one in this vast country.

Look beyond it to Argentina’s interior. Productive land is the buy today. I find vineyards a good choice, with good profit potential. You won’t likely see your investment double in a year, but the values can be excellent.

Argentina boasts many wine regions, mostly in the provinces bordering the Andes. The high, dry climate is perfect for controlling the amount of water the plants receive. From the provinces of Salta to Rio Negro, you’ll find vineyards. But the most productive province is Mendoza.

Mendoza is being compared to Napa Valley for both the volume and the quality of wine being produced here. It’s increasingly like Napa Valley in another way, as well. Mendoza is beginning to try to make a business of wine tourism, attracting growing numbers of wine enthusiasts from around the world. Vineyards are opening restaurants and boutique hotels and offering tours and tastings. They have even begun putting up signs pointing the way to their bodegas.

All of this combines to make Mendoza one of the most expensive wine regions in Argentina. But remember, “expensive” is a relative idea. Expensive for Argentina can be cheap in a broader context.

Furthermore, Mendoza is the priciest of Argentina’s wine regions with reason. It holds out the greatest potential for riding out any next crisis.

What cost your own vineyard in Mendoza?

First, let’s put the question into context...by considering the cost of a vineyard in Napa Valley.

You’ll pay $41,700 per acre for raw land in California’s Napa region...and as much as $116,700 per acre planted with mature vines.

On the other hand, land suitable for planting vines in and around Mendoza city can go for as little as $4,170 an acre when you’re buying at least 240 acres. Get off of the beaten path in the surrounding province, just beyond the current main wine corridor, and you can find land good for vines for as little as $1,670 an acre.

Land already planted with grapes? In Mendoza, you’ll pay $8,340 per acre—that is, less than one-tenth the cost way up north of the Rio Grande.

Planting vines on raw land will cost you between $3,340 and $5,000 per acre depending on the water system, the total area planted, and whether or not you put up netting (to protect from hail and birds).

To read my entire writeup on the potential returns of Mendoza vineyards, read the April issue of International Living magazine. It contains information on how to make up to 12% of your invested capital off these vineyards even if you don’t want to make your own wine…plus the real estate contact you’ll need to get into this market. (It wouldn’t be fair to our paid subscribers to give that information here.) Sign up to get the IL magazine…and instant access to the April issue.

Lief Simon
For International Living

Read related articles:

- Live on Your Own Vineyard…From $165,000

- Bargain Property in the Best Part of Town

- “We knew nothing about farms, and couldn’t speak Spanish…so we bought a vineyard in Argentina.”