Which is the Better Investment Cow?

I am not a rancher. I am a real estate investor, but I select my real estate investments based upon a comparison of two types of cows. One is a beef cow; the other, a dairy cow.

The owner of a beef cow must feed it every day until it has grown to optimal size for sale to the slaughterhouse. The owner then tries to obtain the best price per pound. Until that time, the animal is a cash flow negative asset. To receive any return on investment at all, the owner must sell.

The owner of a dairy cow must also feed it every day, but the cow produces milk. Provided the milk is sold for more than the cost of maintaining the animal, the owner receives regular, positive cash flow. In fact, it's not necessary to sell the animal at all in order to receive a good return on investment. Eventually, it can be sold to the slaughterhouse, perhaps when the price of beef is highest.

I look for “dairy cow real estate” for the best overall return on my investment, and so should you.

~ Fred Margel is a lawyer and he is president of London Pier Properties Ltd.

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