Photograph courtesy of Bob McClenahan
4 reasons to invest in a vineyard
Making (and drinking) your own wines
Undulating sun-kissed hills planted with rows of lush vines yielding fruit that has the potential to make us merry; the prospect of owning a vineyard is universally romantic to those with an epicurean edge and an appreciation for the finer things in life.
“There are many reasons to buy a vineyard,” says David Ashcraft, founder of Vintroux Real Estate, who has been selling vineyards in Napa Valley and Sonoma for 17 years. “They are usually in beautiful locations, and they epitomise a great lifestyle, something that they can share with friends and go and visit. Plus, there is huge bragging potential. On top of the property itself, you can create your own wine that you can gift to friends and associates and that can also be run as a business and yield some income.” You need never worry about buying the best wine for your superyacht parties again.
The beautiful scenery
You can plant grapevines wherever the sun shines, but when it comes to investing, some locations are better than others so check out some of the best places for wine tasting before you buy.
“The safest place to invest in would be the Napa Valley — it is very secure and values hold there even if there are changes in the economy. Sonoma and the Bordeaux and Burgundy regions of France are also good options, and these days more and more people are looking to South America, too,” says Ashcraft. “But blue chip is always going to be Napa and Sonoma.”
Take, for example, this 109-acre estate with a 5,000-square-foot main house, a 1,500-square-foot guesthouse, two barns and 35 acres planted with Merlot and Cabernet Sauvignon. The vineyard is located in the Napa Valley Appellation. The unique microclimate provides very desirable fruit characteristics, and wines made from this vineyard have received numerous awards and accolades.
Napa Prestige Vineyard Estate is listed by Vintroux Real Estate for $7,995,000
Vineyards can be a great business opportunity
Once you have a vineyard, there is the potential to operate as a profitable business, but it’s a tough going enterprise that depends on a number of variables, from the quality of the fruit to the volume you produce and the hours of sun that season.
“The safest and most effective way to make money out of a vineyard is to hold it over time,” says Ashcraft. “However, it’s very different to other commercial real estate. You wouldn’t get the same return as you would on an office building or apartment complex, but then you wouldn’t go to either of those places to enjoy yourself, so there’s a good trade-off.”
There is, of course, the option of getting into the wine business, growing your own grapes, making your own wine and selling it directly to consumers. “That way you can take the entire margin, which is obviously an attractive prospect,” says Ashcraft. “But there are a lot of hoops to jump through as the wine industry is a tricky one and highly competitive. My client base is a mixture of people looking for a certain lifestyle and of people within the wine industry who are looking to pick up additional vineyards or smaller wineries, but I definitely have more lifestyle buyers than commercial.”
It can be a rewarding way of life
"We were searching for a country home; I was between Miami and New York and Steph was in San Francisco," says Dennis O'Neil, co-owner of the Checkerboard estate in Napa Valley (pictured). "We were looking for something in wine country in the Napa Valley area and we came across the initial part of the Checkerboard estate, mulled over it for a year and eventually bought it."
"It needed everything — there were no roads to it, no water and no electricity. We have spent a fortune — in excess of $25 million, but we’ve essentially built a small town. It was purely a pleasure building it, but it is an operating and profitable business now. Once you start producing and selling delicious wine, you have to become serious about it because your customers are serious about it. We certainly enjoyed and collected wine before, but we weren’t connoisseurs; now we tell people we are farmers."