How organic farming can be a sustainable real estate investment
While many investors focus on accumulating positive cashflow through rental properties and/or investing in stocks, sustainable agriculture is a great way to diversify your portfolio in 2020 as part of a “Plan B.” Based on teaching international real estate investing for decades and being a “Rich Dad Poor Dad” Elite Trainer in Costa Rica, I have found investing in organic farming in Panama to be a sound investment strategy.
After leaving Costa Rica in 2014, I was grateful to discover hard-to-find investment opportunities in Panama in real estate and sustainable agriculture. Now, I travel between Atlanta, Georgia, and Veracruz, Panama, hosting VIP Tours for a maximum of 14 people at a time to educate global investors, retirees, and people who want to become expats on “All Things Panama.”
And during this global pandemic, there has never been a greater awareness of our basic needs for food, water, and shelter. Eating is never going out of style, and especially organic fruit and vegetables that are grown in Panama on USDA certified land.
So why invest in organic farming in Panama, and why now?
- Global population growth ensures high demand for organic food – Based on the United Nation’s global population growth estimates of 8.5 billion by 2030 and 9.8 billion by 2050, demand for USDA certified organic farming will continue to skyrocket, especially for smart greenhouses and long-term investments in trees that are now available in Panama.
- The growing Panama economy is called the “next Singapore” – Over the last 10 years, Panama’s GDP (before COVID-19), has been between 5.6 percent and 11.3 percent. As a business-friendly democracy using the U.S. Dollar and many tax breaks, this growing economy has been referred to as the “Next Singapore.” Panama City has seen many multinational companies (John Deere, Nike, Under Armor, Exxon, etc.) set up offices, along with a Panama Canal Expansion, metro, international airport, and a new Johns Hopkins–affiliated hospital. And their Cobre Copper Mine is predicted to generate more income than the Panama Canal.
- Significant local demand and virgin land – 85 percent of the food is imported into Panama, so there is a very high demand for local fruits and vegetables. And because there was a lot of virgin land throughout the interior of the country that had never been used for planting, the dirt was immediately granted as USDA certified organic.
- Onsite farming experts with global distribution channels – While you may be thinking, why not invest in agriculture in the United States, we have not been able to find deals like these. And you do not need to be there or be a farmer. Investors lease the greenhouse and/or land back to a farm management company.
- Low risk/high returns with smart greenhouse and rotational crops (melons, cucumbers, berries) – You can either invest in a smart greenhouse and/or purchase land for rotational crops. The smart greenhouses protect the crops from insects and weather elements (mostly torrential rains because Panama does not have your typical natural disasters). And with farm experts managing the greenhouses, you can more easily switch short-term rotational crops to what is the highest–paying fruit or vegetable. And while nothing is guaranteed, investors have started seeing returns with an average IRR (Internal Rate of Return) of 10-17 percent.
- Long-term investments in permanent crops with trees (limes, avocadoes, and mangoes) – You can also invest long-term in trees that will grow 50-80 years as a legacy investment that you can leave to your heirs. For this investment, you wait four years before seeing a return, but if you are looking for long-term investments with 40 years or more of income, these trees can be a great option. It just depends on the individual and their investment goals.
- Continual stream of income with no renters – By investing in these organic farms in Panama, you have cashflow from your agriculture business. And one of the best parts is that you don’t have to wonder, “Am I going to be able to get renters?”
Along with considering sustainable agriculture in Panama, there are global real estate deals that do not require you to be there to manage the property. Panama’s prices are typically 25-50 percent less for the same quality of most major U.S. cities with a more affordable standard of living. We also have access to pre-construction loans where you put down a very small deposit of 10–30 percent, depending on the construction phase, and then you hold until it’s finished.
In the long-run, there will always be a demand for food, so think seriously about adding these income-producing assets to your portfolio.
We are also focused on contributing to the number of trees being planted globally and are grateful to the United Nations’ One Trillion Tree Initiative for all their work.
Evie Brooks (Atlanta, GA and Veracruz, Panama) is an elite Real Estate Investment Educator, Keynote Speaker, Investor, Coach, Mentor, Entrepreneur and former Advanced Trainer for “Rich Dad Poor Dad” who now specializes in Panama real estate and organic agriculture investments. As a disclaimer, Brooks and her employees and affiliates are not investment or tax advisors, and do not offer investment advice. To learn more, visit https://eviebrookspanama.com/