Spring is traditionally the best season to take advantage of the rural property market: the sun is out, temperature is rising, grass is green, and stock is at its most healthy and presentable.

Although not given, many still prefer to buy and sell property at this time of year, as the hours of daylight grow longer, and farms become more presentable. As a result, more farms are listed on the market, giving more choice to find the best property that matches your needs. 

If you are intending to buy farmland this spring, remember that preparation is crucial. Here’s some useful things to know before you get started.
  

See full documentation of the property

This can include compliance, stocking rates, farm improvements, production history, inputs, pasture development and business expenses. Asking for this information in advance will work to ensure the sales process arrives at a successful conclusion for everyone involved.   

Without these comprehensive details, you may not know all aspects of the property, making this a higher risk.  

It’s expected that sellers will gather these facts before the farm is offered for sale, which will help resolve many issues that might otherwise give you reasons to hesitate. 

Having this information to hand early will help you to make sound, confident business decisions about whether to purchase this property. 

Prepare your business case 

Anyone considering a purchase of a rural property will likely need a conversation with their banker. Banks maintain highly specific lending criteria around supporting clients into farm ownership and are wary of their level of exposure to agriculture. 

A financier will not come on board to support the purchase of a farm without a persuasive business case, which should focus less on capital gain and more on revenue generation.     In most instances bank analysis and your due diligence will focus on the property’s environmental sustainability and compliance to land and water use regulations. 

You should be able to request such information from the seller, to then disclose it to the bank. Better quality information gives you the means to convince the bank that this is a farm to invest in. 

Good operational information will help to make the case compelling. If the vendor can collect that and ensure documentation is all in order well ahead of setting out on the sales process, the chances of selling within an acceptable time frame will improve significantly.    

Remember, while vendors and purchasers may be swayed by the aesthetics of the farm and the promise of spring, the banker is only interested in the business case and the bottom line. 

The best chance of success on your property journey will come from being well prepared and partnering with experts. And if you’re in the market for the right rural property to purchase, then we recommend speaking to an experienced salesperson from PGG Wrightson Real Estate.

No matter where you’re looking across New Zealand, our team of local, professional agents are working hard to get the best results for their clients. 

Check out our latest listings or contact us now - we’re waiting for your call.  

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