Do Effluent Systems add Value to your Farm?

If you’re wanting to get the best price for your farm, you’re likely wanting to target people who are wanting to buy a dairy farm. In general, people wanting to convert property into something else are more likely to be hunting for a bargain.

With farms coming up for sale reasonably regularly, it can be a competitive market out there…meaning buyers have the upper hand. The savvy buyer knows what to look for and can smell a system that will need work. They’ll be on the lookout for something that is council compliant and reasonably future-proofed.

We’ve often been contacted by farmers having difficulty selling their farms upon the advice of their real estate agents. They’ve either experienced very low offers or none at all, and the agent tells them the feedback has been around the effluent management system needing work.

The effluent system is one of the first things discussed

Talking with Stewart Rutter, Rural & Lifestyles Sales Consultant at PGG Wrightson Real Estate, he tells us the effluent system is one of the first things they discuss with dairy farmers.

“‘The first question a prospective buyer asks is usually ‘is the effluent system compliant?’. If the effluent system is not up to speed, then you can expect the prospect to offer a lot lower price, it will be harder to sell, and spend longer on the market. It pays to be proactive before marketing your farm.’”

– Stewart Rutter
Rural & Lifestyles Sales Consultant at PGG Wrightson Real Estate

One example is a farmer in Waikato who’d had his farm on the market for a long time and it was getting very little interest. It had inadequate pumping system in place. The solution was to install a lined pond, new pump and pond stirrer, which he approved. As soon as the sale listing was updated to include the yet to be completed effluent system upgrade there was a lot more interest, and the farm sold before the system had been commissioned. The farmer more than recovered the cost of the investment, and the sale happened quickly.

Of course, not all farms require large investments to make them more attractive to potential buyers, buyers just want to know they won’t be inheriting likely problems in the short term. So our advice is to look at the farm from the buyer’s perspective. Is it compliant now and in the near future? If in doubt, find out – a small investment can reward you with greater returns and a faster sale.