REFLECTING DURING LOCKDOWN – PADDY JORDAN

LAND INVESTMENT

During lockdown I have been reflecting on why land has been a good investment over the last 40 or 50 years since I have been involved in the property business. In February 1968, I started in a company called Hassett & Fitzsimons and I worked in the Country Department with the late great Tony O’Toole from Ratoath. He was dealing solely with agricultural land in the Meath/Kildare area. I travelled with Tony. Accompanying him to look at various properties and meeting farmers mainly in the Meath area, where Tony was from in Ratoath. That was 1968 and lands were making £300 and £400 an acre and I was just thinking why has it been such a good investment compared to other commodities.

THE DAY YOU BUY IS THE DAY YOU SELL

My advice always was “the day you buy is the day you sell” and that has long stood the test of time.

Land performed well since 1974 which coincided with the introduction of Capital Acquisition Tax (CAT) and Capital Gains Tax (CGT). The Revenue Commissioners accepting a 1974 figure of £1,000 per acre at that time for probate which equates to approximately €1,300 per acre.

From time to time we have been retained to acquire suitable land for farmers either adjoining lands or lands in close proximity to their existing operation. While in some cases a whole new location, provided there was enough acreage in the package for it to be a stand-alone independent entity i.e. 150+ acres. Our clear goal is to do the best we can for our client!

WHAT SHOULD ONE LOOK FOR ?

Good land is always good land and bad land is always bad land, no matter how much you spend on it. Having acquired bad land and invested in either drainage or improvements, it is still bad land. On the other hand good land is always good land and that is why the saying “the day you buy is the day you sell” holds. Whether it is a good market or a bad market you are buying in. As long as the land is good it will appreciate and hold its value.

LOCATION, LOCATION, LOCATION

The other adage is Location, Location, Location. If the property is in a good location when you buy it, it will be in a good location when you sell it. Various things can happen in the meantime to help that. For example, perhaps some adjoining lands might have been sold or used for development. This land may have been purchased by an individual who may want to add to their holding and would make a direct approach to combine the two holdings in their investment.

ACCESSIBILITY

Accessibility is always very important. Road or rail infrastructure for future developments is a hugely important consideration. Towns like Newbridge, Kildare Town and even Monasterevin are all locations on the up, with good accessibility to the M7 and direct rail access to Dublin, Heuston or Grand Canal Dock.

TILLAGE

Land that is suitable for tillage and grazing is consistently going to be more appealing in the long run.

WE LIVE IN HOPE !

Bob Hope the famous comedian who finished up being a multi-multi-millionaire had one rule when he was investing. He always bought on the edge of towns and cities no matter where in the USA. The reason being; that with a densely populated area there was going to be a requirement for housing. No matter how long you had to wait, if you bought something on the edge of town, it was likely to appreciate over the long term and thus change from agricultural to development values when exiting.

The other reason for buying near towns and cities is the road infrastructure, services and utilities. All services may already be available or they are likely to be available in the long term. Hope didn’t have to do anything except wait – he finished up by being one of the wealthiest men in the USA when he died.