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Money & Culture

Love Wine? Make Your Own: Consider Investing in a Winery

June 26, 2015
Invest in a winery

Love wine? Love investing? You might blend the two by investing in a winery. After all, plenty of people follow the mantra “invest in what you know.” For wine enthusiasts, that might include turning a hobby into more than a pastime through a major winery land purchase, a smaller vineyard microplot, or even a time-share.

Agricultural-land investment has become increasingly popular in the past several years, especially as investors seek alternatives to the stock and bond markets. In addition to investing diversification, there’s the romance of going to the vineyard, where you can see your investment grow into grapes and the grapes get turned into wine for your table.

Of course, there’s also the sobering part. Entry costs are prohibitive, and risks can be high. Owners have to deal with day-to-day business operation risk as well as Mother Nature. And then there was the short-lived news of a lawsuit about arsenic in wine—evidence that market whims can levy as much stress on a vineyard as the weather.

But if you’ve steeled yourself against such risks and still want to live the dream, there are several ways to get more involved in wine beyond picking up a bottle before dinner.

Enlist the Experts

Carla Bowers, co-owner of ICONIC Wine Tours in Napa Valley and publisher of books on the region, describes several ways to enter the wine industry.

First, ask yourself: “Are you going to be winery owner, a wine grower, a wine maker? There are so many different ways now to partake in that lifestyle or that fantasy. It really depends on what the goal is, what the desire is, what the budget is,” Bowers said.

To start, seek out real estate agents specializing in wine estates. One example is VineSmart, which has wineries for sale all over the world.

But Bowers cautions enthusiasts that the purchase price is only the beginning. Many, she said, “don’t bring in the right resources to understand all the different regions, the different grape-growing areas, and what it really costs to maintain it, produce wine, and bring it to market.”

Just a Taste

One alternative to owning a whole estate is to buy a microplot.

Michael Evans is co-founder of Vines of Mendoza, which is based in the Uco Valley of Mendoza, Argentina, and allows investors to buy into their own vineyard, anywhere from one to 10 acres. “They get a title to the land … we do all the farming. We enable them to have the fun part of owning a vineyard and making wine and drinking wine of course, but none of the headaches of doing the farming that happens there,” he said.

Some owners make just enough for friends and family, but about 10% of owners sell their wines commercially, he said.

How Much Are We Talking About?

Purchase costs for land and winery management at Vines of Mendoza range from $100,000 for one acre up to about $800,000, as of spring 2015, Evans said. The average plot is about three acres. Land value can vary in both directions over time, of course.

“If someone has a three-acre vineyard with us, that [plot] can make 6,000 to 12,000 bottles of wine,” he said.

Still sound like too much work?

Consider a vineyard time-share such as Napa Valley Reserve. According to articles in Worth magazine and Food & Wine, for a $150,000 deposit, a buyer can purchase from one-half to three barrels of wine and get some hands-on experience in wine-making.

Being able to bottle your own wine is a thrill, Evans said.

“Many people share it with friends and clients. It’s a nice way to solve holiday gifts,” he said.

A Satisfying Retirement

Plan for income and lifestyle needs by keeping your retirement plans flexible. Let TD Ameritrade’s Chartered Retirement Planning Counselors help.

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