As interest rates stay persistently high, with the Federal Reserve adopting a hands-off approach in the face of stubborn inflation, many real estate investors are trying to think outside the box to turn a profit.
Year-round vacation homes have proven lucrative in this regard, earning over three times as much as a regular rental. But competition is tight, and relying on a full calendar of guests can be stressful.
Fortunately, other, less-known real estate assets can also turn a tidy profit when done correctly. Let’s take a look at a few of them.
Wineries
Investing in a winery isn’t just for rock stars, hedge funders, or tech tycoons—and they aren’t limited to California’s Napa Valley. Granted, of the more than 800 million gallons of wine produced annually in the United States, California produces 84%. However, quality wine also comes from New York, Pennsylvania, Virginia, Maryland, and Oregon. Wine, of course, is also produced in large quantities in the Mediterranean and around the world.
Buying an operating, functional winery is not cheap and not for the novice. If you hope to learn on the job, no credible winery will sell to a newbie. Rather, they will want to see that you are connected and known in the business.
If you want to buy in Napa, being involved in associations such as Sonoma Valley Vintners & Growers or Napa Valley Vintners Association and being on good terms with other winery owners is a huge help. These connections can take years to build, so partnering with someone who has them and knows the wine business is the way to go.
What it costs
As you can imagine, the cost of buying a winery spans the gamut from several hundred thousand to several million dollars, depending on size, location, and profitability. Assuming you are not a vineyard expert and want to purchase an ongoing, operating vineyard, expect to pay $35,000 an acre. Considering you need about 20 acres of land for a profitable vineyard, you’re…