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Buying agricultural land in Poland as an investment opportunity?

posts: 15

♂

Jul 23, 11, 16:21 #1

halo,

what do you think about buying an agricultural land as investment. It make sense?

I got a such offer:
land is located in Mazury close to the lake. I have to admit that it is charming place but I do not know if it is worth.

http://www.votemazury.org/en/mazuria.html

some more information:
In investment complex there are 100-200 units. One unit has 3000m2 which is the lowest size possible for agricultural land in Poland. I want to buy 4 of them to avoid paying PPC tax which is 2%.
The cost of one unit is around 60000-80000 PLN depends on the location.
I pay only 20% deposit and rest of the amount I will be paying in Instalments. after I pay 6 instalments the company assign on me shares in LTD company as it is the only option that I was the owner before 2016. option where I pay in cash is 5 PLN cheaper than regular price. One share is one unit. Instalment is 500-600 PLN per unit.
price per m2 is around 25-30PLN depends on the location.

I am thinking to use leverage and to chose option with instalments.
key factors to buy.
- location: close to main roads, in nice areas, close to lake,
- in complex with other investors and people which just want to buy a land to build a house in the future or have the place where they can relax. there will be no more than 20-30% foreign investor in one complex. the more people in complex the higher possibility the land in the future will be a building plot which only increase value but I predict this will not happen in the next 5-10 years. it is rather 10-15 years investment.
- company guarantee if the land will not be a building plot in the future return of the money.
- land over the last 20 years have not gone down and it is higher possibility that is will be going up as it is limited good especially in good locations.
- no tenants, no fit-out and other cost.

everything looks ok but I do not have experience. What do you think?
and like the site :)

regards
daniel(at)polishmortgages(dot)eu

delphiandomineThreads: 42 Posts: 9,954 Joined: Nov 25, 08 ♂ [Suspended]	Jul 23, 11, 16:25 #2
- company guarantee if the land will not be a building plot in the future return of the money. Err...in Poland, such a guarantee is absolutely worthless, unless you have a personal guarantee from one of the company shareholders/directors.

polishmortgagesThreads: 7 Posts: 20 Joined: Jun 22, 10 ♂	Jul 23, 11, 16:36 #3
I confirm it. It is really looks ok for me that is why I a bit sceptic. Poles first sign preliminary purchase contract and in 6 month final purchase contract. Over this 6 months the owner must divide complex to unit which I buy. In my case the owner will have 6 months to assign ownership to the company.

♂

Edited by: warszawski Jul 23, 11, 16:49 #4

In investment complex there are 100-200 units. One unit has 3000m2 which is the lowest size possible for agricultural land in Poland. I want to buy 4 of them to avoid paying PPC tax which is 2%. The cost of one unit is around 60000-80000 PLN depends on the location.

About 10 years ago I got involved in a similar project, we bought a piece of land next to Jezioro Narty and divided it up between friends http://www.nurkomania.pl/nurkowisko_narty.htm, good place for water sports and not so far away from Warsaw, our plots average 8,000 m2 each, the idea was to create a village, the land had the permission to build a summer house ( wooden House) although we wanted to change the status of the land, as there were brick built houses about 400 mtrs away, after a couple of years the status was changed, then we had the financial crisis and a few of the group could not afford to build, so it was put off. So this year, we have found a builder this year and the project will start in 2012. We paid 5pln per M2 and all the media was installed, so 25-30 PLN for rolna, seems very expensive to me, you can buy rolna in some nice areas near Plock close by the Wisla for 8-10 PLN per M2.

As a side note, I am told that land has been sold close by ours in Narty ( same status budowlana), for 65 PLN per m2. It has been a long waiting game. I would not even sell the land, purely because of the hassle I have been through. My advice, expect the unexpected.

peterwegThreads: 35 Posts: 1,997 Joined: Feb 16, 07 ♂	Edited by: peterweg Jul 23, 11, 16:54 #5
If its agricultural land you can't build on it, thats not going to change. It looks like an elaborate scheme to sell you land for several times its worth, these sort of cons are very common in the UK. Run. Away. I paid 5zl/m2 and it included a 80m2 house, barn.

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Jul 23, 11, 17:21 #6

I agree with you that you cannot build in rolna but as you know when you get permit/allowance then you can. I do not want to talk about price because you can find a land for 1pln in middle of nowhere or you can meet rolna close to Warsaw for 150pln or more. Here I see what I buy. A good location, nice view, with other people who wants to buy a house. I do not have also experience in finding land and also time. I do not have time to go to Poland to often. I will check the prices only if in this location prices are competitive and then I take a decision to buy it or not.

delphiandomineThreads: 42 Posts: 9,954 Joined: Nov 25, 08 ♂ [Suspended]	Edited by: delphiandomine Jul 23, 11, 17:24 #7
I do not have time to go to Poland to often. Yet you sell mortgages for property in Poland? hmm. Your own website gives an address in Poland - you do realise that this is...well...dodgy?

polishmortgagesThreads: 7 Posts: 20 Joined: Jun 22, 10 ♂	Jul 23, 11, 17:26 #8
Warszawki good idea with diving. I hope that someone will do something like that in complex. there will be 100 or more people so for sure somebody will build a nice hotel or anything...

polishmortgagesThreads: 7 Posts: 20 Joined: Jun 22, 10 ♂	Jul 23, 11, 17:44 #9
I will do that again soon as I want to move back to Poland as soon as ownership of the company change...

peterwegThreads: 35 Posts: 1,997 Joined: Feb 16, 07 ♂	Jul 23, 11, 20:06 #10
Your own website gives an address in Poland - you do realise that this is...well...dodgy? How so? If he has a contact address in Poland it doesn't mean his company is dodgy, you cannot be everywhere and he can have representation here.

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Jul 23, 11, 20:22 #11

he more people in complex the higher possibility the land in the future will be a building plot

How do you figure out that? My understanding is that you have to have adjacent building land for a change in use. Is that a the case? How does the fact that its separated into small lots work with that?

Why is the vendor selling the land cheap if he is confident of getting permission which will double its value?

♂

Jul 23, 11, 21:08 #12

I pay 6 instalments the company assign on me shares in LTD company as it is the only option that I was the owner before 2016. option where I pay in cash is 5 PLN cheaper than regular price. One share is one unit.

Which, of course means that you do not own the land. So the directors can sell the land and hand themselves a large bonus while you get to keep your share certificate.

- company guarantee if the land will not be a building plot in the future return of the money.

Worthless and meaningless. The land owners know what the probability of the land getting permission is, and they choose to sell it without. Thats very instructive. If the land cannot be built on, its (any remaining land, sales income will be long gone) assets are worth 1/5 of what they were sold to you. So who is going to finance this guarantee? Again, thats a solid evidence of a scam.

Also, what about media, water, gas electricity? Besides the large potential cost, there is no guarantee they will install it due to capacity restrictions and this is almost a nation park - it maybe impossible. Why isn't it already installed? its normal in building land.

There is loads of building land available in Poland and planing permission is reasonably easy to get. So why over pay for agricultural land on the very vague (and almost certainly no) chance that it can be converted?

♂

Jul 23, 11, 22:51 #13

Also, what about media, water, gas electricity? Besides the large potential cost, there is no guarantee they will install it due to capacity restrictions and this is almost a nation park - it maybe impossible. Why isn't it already installed? its normal in building land

It is not installed because it is " rolna " unless there was planning permission for the land or existing buildings, I personally would stay away from it. Your going to find, the only way to get permission is to use the building company of the " chief " in the local gmina, who will charge you what he wants and is not market price. Everyone needs to eat on the type of project you propose.

pipThreads: 11 Posts: 1,293 Joined: Jul 4, 11 ♀	Jul 23, 11, 23:21 #14
look for something better. Like the others said the chance of converting the land from agricultural is slim to none- unless you know have a good lawyer who can find a way to make it work- for example, deeming part of the osiedle as agricultural. Also check if there are any leans or claims on the land.

peterwegThreads: 35 Posts: 1,997 Joined: Feb 16, 07 ♂	Jul 24, 11, 23:49 #15
Another thing, you can buy agricultural land with a permit now. It takes time, but it should be possible. If you you are desperate for farmland, buy in the UK, its cheaper, £4k/acre for the best agricultural land against £20k/acre for this land in Poland.

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