Wine lovers the world over fantasize about what it must be like to wake up early in the morning to look out over endless rows of healthy grapevines growing on their very own vineyard.
It’s a romantic notion, but it is rare that the hard work necessary to run a vineyard and or winery creeps into those daydreams. There are many factors to consider when purchasing an agricultural property including irrigation, soil quality and elevation to name but a few. It’s important to have a game plan when entering into major agricultural endeavors such as grape and wine production.
There are many ways in which to invest in wine, but if you’ve dreamed of being on the production side of the industry, it is important to understand everything that goes into making your agricultural investment successful. So consider this your vineyard buying guide.
Is Buying Vineyards and Wineries a Good Way to Invest in Wine?
That is entirely up to you and what your goals are. People invest in vineyards for different reasons. Some people see it as nothing more than a real estate investment, but others see it as the ultimate investment in the wine subculture. Before investing in a vineyard, though, you need to make sure you have a clear understanding of what you want to get out of it.
- Lifestyle Investors. While sharing wine with friends and family can be a lovely experience in itself, having loved ones take part in the actual production of the wine enriches the product with the added element of a shared experience. Vineyards and wineries are often passed down from generation to generation, with each new wave of winemakers learning from the previous one. A lifestyle investor isn’t just investing in a business, they’re investing in a legacy.
Vineyards tend to be located in geographically stunning locales. Vineyard owners often have luxurious chateaus on their estates and host opulent parties featuring wine produced on-site. Vineyards and wineries are properties that owners want to keep in the family for the next generation to enjoy.
If you fall into this category of investor, your main concern should be that you have the funds to cover the land purchase, staff salaries and other operating costs. A winery buying guide like this can help, but the lifestyle investor has a tendency to be more hands-off than someone examining the science behind wine production. While the lifestyle investor surely wants to make a profit or at least break even, the day-to-day duties will be taken care of by expert viticulturists and vintners.
- Owner/Operator Investors. The owner-operator investor wants to get his or her hands dirty. They want to know soil pH, vine lineage, irrigation techniques, best harvest times, etc. Wine is their passion and they want to build a name for themselves in the wine industry. They know that there are many bureaucratic rules and regulations that govern any alcohol-producing business, and that they have to learn all of the ins and outs if they want to be successful.
If you are an aspiring owner-operator, consider starting small. Give yourself time to learn the terroir of your property and how to best utilize its unique characteristics. Doing this will allow for better-informed decisions that will pay off over time. In the beginning, you can sell off most of your grape harvest to larger operations while holding back enough of your crops to start fermenting and barrel aging your own product.
- Real Estate Investors. Speculative real estate investors buy vineyards hoping to sell them at a higher price than what they purchased them for to lifestyle and aspiring owner-operator investors.
Speculative real estate investing can be a very high-risk gamble. You would need to be able to analyze everything that makes vineyard prices fluctuate in order to make a profit.
Where is the Best Vineyard Land in Texas?
Texas has three main (wine) grape-producing regions, all with upsides and downsides. Determining what kind of wine you would like to produce is the first step in narrowing down your choices.
- North-Central Region. The high elevation and semi-arid climate of this region make it ideal for growing wine grapes. Over seventy different varieties of grapes are grown here. Many grapes for white wine and rosés are grown here because whites and rosés retail for a lower price than reds. The land in this region tends to cost less than in other Texas grape-producing regions, so it makes sense that wine producers would utilize this cost-effective option for their crops. That being said, because the soil is well-drained, irrigation may be an issue that potential land buyers should factor in before making a purchase.
- South-Eastern Region. Muscadine and Black Spanish grapes flourish in this humid region of Texas. These are two grape varieties that are resistant to Pierce’s Disease — a bacterial pathogen that can devastate wine grape crops. Grapevines of the vinifera variety — think merlot, pinot noir, and chardonnay — have a difficult time thriving in this region, so hybrid varieties are often grown here instead.
- Trans-Pecos Region. This region and its subregions produce bold reds and ultra-crisp whites. This is where the vinifera vine thrives. The highest in elevation of all Texas wine-producing regions, Trans-Pecos produces grapes with thicker skin and higher tannins.
Fredericksburg, Texas is located in the Trans-Pecos region. It is home to over fifty wineries. This is where people who are truly interested in becoming part of the Texas wine industry come to set up shop.
Not all wine-producing areas fit neatly into these three regions. In Travis County — home of Texas’s capital city of Austin — you will find row upon row of grapevines growing around the Lake Travis area. It’s a good thing, as Austin is home to over 50 wineries.
Roughly 60 miles north of Austin is the town of Marble Falls, located in Burnet County. Many of the vineyards here mimic the aesthetic of traditional French wineries and are perfect locations for a day trip.
Comal County in the Texas Hill Country is home to many bed and breakfasts attached to vineyards and tasting rooms. There are several wine-related festivals and events in Comal County throughout the year.
How Can TexasLand Help?
We facilitate land sales and purchases for a variety of sellers and buyers. In order to do this well, we must examine the land and know the right questions to ask. This means boots-on-the-ground investigations of the properties. We wouldn’t send someone who has never hunted to research hunting property, and we would never send someone with no knowledge of agriculture to research a vineyard.
The Texas Land staff is extremely well-versed in Texas real estate. If you are interested in learning more about purchasing vineyard land in Texas, contact us today.
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