If you are considering investing in California’s wine industry, several issues are more pertinent than ever.
Doing due diligence is essential before making any purchase, yet purchasing real estate in the state’s wine country carries unique risks.
- Will you have enough water?
Water supplies, once considered limitless, are proving to be otherwise, and there is high demand for the available water from several factions. With the growing awareness that taking water out of rivers for agriculture affects aquatic life downstream, the state’s water resources control board has already reduced the amount of water available to some wineries. California has tightly controlled its water for years, and it will only do so more.
- What is your fire risk?
The wildfire risk is increasing. It only takes one fire to burn through all your hard work and investment, as many winery owners discovered over the past few years. Proposals to improve fire safety could also force wineries to spend heavily to improve the roads that access their properties.
- Can you get insurance?
Insurers are, in effect, expert gamblers. They study the odds and avoid betting when the odds are stacked against them. Some insurers are deciding that if you have a winery in a part of the state prone to wildfires, they are not prepared to risk insuring you. Or, if they do, they will charge sky-high premiums to do so.
The wine industry has never been easy, and despite these increased challenges, demand for land is still high. If you believe you can make a go of it, conducting thorough research is crucial. Having help to understand legal requirements, zoning regulations and more will allow you to decide whether entering the California wine industry is right for you.