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Investing In Farmland

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Invest In Farmland 2021: Is Farmland Worth It?

Is your knowledge of farming limited to “Old MacDonald had a farm” or the theme from Green Acres?

Maybe you live in a high-rise apartment in the city and work in a skyscraper. If this is the case, you might believe that investing in farmland is not for you.

Farmland investing, however, offers a unique asset class that may help you expand your wealth.

This article will go over investing in farmland to see if it really is the best fit for you.

And at the end, you’ll find answers some of the most frequently asked questions regarding farmland investing in general

But most importantly, you’ll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.

But, before you start hunting for bargains at the county fair, think about how you may hire specialists to assist you to earn from farmland investing.

The following information will provide you with an overview of the asset class.

Table of Contents

What Is Farmland Investing?

Farmland investing, as the name implies, entails making investments in some way related to crop production. At the end of the day,  the land is real estate, and so this falls under the umbrella of real estate investing.

You are, however, investing in farmland rather than structures for homes or retail space.

USDA Reports 911M Acres of Farmland

According to the USDA, the United States has around 911 million acres of farmland. You might be shocked to learn that more than half of that property is rented, which means farmers are paying landowners for the privilege to utilize it.

In fact, non-operator landlords own the vast majority of rented farmland. These are landowners who are not actively involved in farming activities. Landlords who own the land and are actively involved in farming are known as operator landlords.

According to the USDA, these non-operator landlords hold 283 million acres or 30% of all farmland in the US. These are people who wish to profit from the farmland investment opportunity without getting their hands dirty.

Only 20% of rental farmland is owned by operator landlords, who work his farm personally.

Every day, a growing number of people are discovering the investment opportunity in farmland but not necessarily participating in the farming process. Farmland investing platforms are constantly emerging, providing you the chance to get in on the action.

On top of that, farmland provides various benefits to the environment.

Invest In Farmland Review: Is Farmland A Good Investment?

Everybody had a difficult year in 2021. Investment opportunities were scarce.

As business leaders, investors, and regular residents searched for solid ground, they realized that the year in question was one of the most chaotic in history. 

The rediscovery of land as a safe haven by investors helped to make the second half of 2020 a record-breaking year for land sales. Then they found hope in investing in farmland.

Is It Good To Invest In Farmland In 2022?

2022 is expected to be another excellent year for the land market, following the setbacks of 2021. 

Rural land for residential usage appears to be a particularly desired commodity. The pandemic crisis is clearly a significant factor in this trend. 

People are eager not simply to invest in farmland outside of the city and monetize the recreational options such as hunting and fishing that it provides. 

In addition, they want to reside on the land they own and be able to enjoy the fresh air and nature.

The Southeast region of the United States has had the greatest increase in real estate value in the last year. One reason for this is that the current pandemic migratory flow from urban to rural areas is occurring on top of a major migratory stream from the Northeast to the Southeast that has been ongoing for many years and appears to be accelerating. 

The U.S. Census Bureau estimates that more than 1.2 million people migrated to the South from different regions in 2018 alone. Currently, Atlanta, Houston, and Birmingham, Alabama are the most attractive investments.

Overall, the price of rural land is expected to go up in many sections of the country in 2021, with the Southeast seeing exceptionally high growth. 

Land Investing Versus Equity Investing

Prior to investing, of course, investors must research and be aware of the difference between land investing and equity investing. 

For example, investors must not be blindsided or otherwise disoriented when dealing with land as opposed to equities, and an investor who lacks adequate preparation or adequate counsel may risk paying too much for the land, or any modifications or enhancements they consider essential or desirable.

Not only does homework on the potential and market pricing for land investments include understanding the tax law and conservation easements, but it also necessitates having knowledge of land mitigation and appraisal methods. 

Many investors are hesitant to participate only because of the tax benefits, but that does not rule out the possibility of a positive impact on expected returns.

Will Farmland Investment Set The Future Trends?

Investing in farmland may not be as trendy or glamorous as it is with equity in technology companies. However, you might be surprised to know… farmland investors sleep comfortably at night because they know they are investing in a solid asset with little volatility. 

Even more so in 2021, rural real estate will provide numerous options for investors ready to look outside the box, which means returning to an investment class that has demonstrated its worth and stability for decades.

Invest In Farmland Review: What Are The Risks Of Farmland Investing?

Liquidity

Investing in farmland has a number of significant risks. The first risk is liquidity. 

If you possess physical farmland, it is difficult to sell without the assistance of a broker. 

Private deal companies like FarmTogether are similarly difficult to liquidate. 

The investment’s shares are usually only liquid once the company’s departure strategy is determined (for example, it sells the farm). 

The farm income from these farmlands, on the other hand, is in the form of cash returns and is obviously very liquid.

Because they are easy to acquire and sell through online brokers, publicly-traded farmland ETFs eliminate the liquidity issue.

Knowledge Problem

The second risk linked with farmland is a knowledge problem, hindering great returns. 

Unless you are well-versed in the asset classes, it might be difficult to obtain a decent deal on the land. 

If you overspend, you can lose profit returns and be stuck with a bad asset for a long time. Those with deep ties to the agriculture sector may be able to avoid this risk of losing returns by only purchasing specific land that satisfies their personal criteria. 

In general, publicly-traded ETFs avoid this problem of losing huge returns by having a large number of buyers and sellers. 

And in general, the lack of knowledge among many buyers and sellers leads to a reasonable price for the shares.

Why Invest In Farmland Now?

Older Population

For starters, the present generation of farmland owners in the US is aging. According to USDA data, 40% of US farmland is owned by those over the age of 65. 

It is estimated by the American Farmland Trust that 370 million acres of farmland will change ownership in the next two decades. 

However, even if initial land transfers are to family, much of it will wind up on the open market if subsequent generations choose to sell and leave agriculture.

New Buyers

It is becoming increasingly unlikely that the new buyers will be farmers. The rising general farmland values over the previous several decades have resulted in a diminishing pool of farmers who can afford to buy rather than rent new property (NPR).

If someone inherits land and does not want to continue the farm, or does not see the value of planting row crops, the best alternative is often to sell the farm and profit from the last many decades of appreciation. This is a better option to get returns rather than turning the farm into waste.

Reduced Entry Barriers

Barriers to ownership of farmland by non-farmers are rapidly decreasing. 

Renting farmland as a farm operator is already prevalent in the US, and around 80% of rented farmland is owned by “non-operator landlords” (USDA), or those who own farmland but are not actively involved in agriculture.

In fact, many of those non-operator landlords are retired farmers who have opted to keep ownership of their land and rent it to other operators. Their farmland’s rental income is a source of retirement funds for them.

These trends are anticipated to continue, with generational shifts in farming in the United States spurring the entry of an increasing number of non-farmers into this asset class. This will further grow the investment portfolio of landowners.

As present farmers retire and either sell their land or leave it to their heirs, an increasing amount of farmland will become available on the open market. The need for farmers to plant row crops is actually increasing now.

Can You Really Make Money Investing In Farmland?

Yes, You can!

But…

There’s a lot that comes along with Farmland Investing that many people struggle with.

Now, don’t get the wrong idea…

It’s not impossible to make money investing in farmland, but if you’re gonna put in the amount of grueling work to do it (which isn’t easy), you might as well bring in some REAL money while you’re learning the ropes.

The program that helped skyrocket many online businesses to over $40,000+ per month is so simple that making money really does become second nature.

Tax Benefits Of Investing In Farmland In The United States

One significant advantage of investing in real estate over stocks/bonds is the variety of tax advantages accessible to you. Real estate, according to current tax legislation, follows a beneficial set of rules when it comes to taxes.

You can take advantage of these tax breaks and improve your k 1 if you acquire farmland shares through internet platforms or buy a farm directly. Regrettably, publicly-traded REITs do not provide the same tax benefits.

Here's a rundown of some of the most prevalent tax breaks for real estate investors:

  • To offset some of the income, you can depreciate the property.
  • The interest on a mortgage is tax-deductible.
  • This is deductible if you pay a mortgage insurance premium.
  • A 1031 exchange allows you to postpone capital gains.
  • Repair, upkeep, and maintenance expenses can all be deducted.
  • Other services, such as rental property management, are tax-deductible.
  • Utilities are deductible expenses.
  • Travel expenses, such as driving to and from the property, can be deducted.
  • Individual tax breaks are available in certain areas, such as opportunity zones.

These are the primary tax advantages to consider when investing in agriculture.

Farmland Investment Opportunities For Both Accredited And Non-Accredited Investors

Farmland Investments For Accredited Investors

As an accredited investor, your primary investment option is to invest in farmland through online farmland investing platform. You are also permitted to participate in non-accredited investor investments.

Check out some of the best farmland investing platforms below:

AcreTrader

AcreTrader is one of the most well-known farmland crowdfunding platforms available. Their minimal fees and competitive returns distinguish them from many other platforms that charge exorbitant fees just to stay afloat. AcreTrader has carved out a niche for itself, leading to rapid market dominance.

Farm Together

FarmTogether is a farmland crowdfunding website that specializes on purchasing lucrative farmland around the west coast. As a result, an investor might be able to obtain cash flow from their investment right away.

FarmFundr

FarmFundr is a crowdfunding platform that allows investors to purchase shares in a farm rather than just the land on which it stands. As a result, investors share in the returns generated by the annual crop. This provides investors with greater upside potential as well as an additional risk if crop production is lowered.

Farmland LP

Farmland LP is an investment platform that specializes in converting conventional farmland to organic farmland. Farmland LP is able to create four times the profit per acre as traditional farms by leveraging on the supply and demand imbalance in the organic market. An investor on the platform cannot invest in individual projects, but must instead invest in a Farmland LP-created fund.

Farmland Investments For Non-Accredited Investors

Don’t be worried if you are not an accredited investor. There are alternative ways to participate in this investment. Many of the online farmland investing platforms have stated that they intend to include non-accredited investors in the future. However, so far, there are only a few options.

Having said that, here are your non-accredited investor options for investing in farmland.

Buy Land

This isn’t the most passive option, but if you can get a bank loan, after paying off all student loans, you could go out and buy farmland directly.

There are websites where you can bid on farmland or check what properties are for sale, such as Buy A Farm. 

The main distinction between this approach and using the farmland investing platform is that you will be completing all of the legwork. You have the option of becoming an operator landlord, which means you will be growing on the land. You might also be a non-operator landlord and rent out the land to a farmer.

To purchase the land outright, you need to be prepared to put down tens of thousands of dollars to secure a mortgage. You will also need to have good credit, and they may want to see some form of track record relating to your farmland and agricultural experience.

If you are prepared to put in more effort, you can bypass the middleman and own the land directly. You will not be charged any administration fees in this manner.

Farmland REITs

Non-accredited investors can also invest in a farm through ETFs, or exchange-traded funds.

When it comes to real estate, this is referred to as a REIT, or real estate investment trusts. The fund’s owner raises capital to purchase real estate. The fund is then divided into individual shares that may be purchased and sold on major stock exchanges. To be categorized as a REIT, a company must distribute 90% or more of its taxable income to shareholders in the form of dividends.

While this may seem appealing, there are a few drawbacks to investing in a REIT.

First and foremost, they are not the most transparent investments available. When investing in a REIT, it might be difficult to determine which properties you own. To answer that question, you’d have to sift through a slew of intricate financial paperwork.

Second, because REITs and stocks are traded on the same exchanges, they tend to behave similarly. 

Diversifying your portfolio is one of the primary reasons to invest in real estate. Diversification is vital because it prevents you from taking on too much risk by being overly invested in a single asset. 

Unfortunately, REITs are subject to some of the same panic selling as equities. Because they trade on the same markets as stocks, they may be unloaded with the click of a button.

However, as a non-accredited investor, your options for farmland investment are restricted. There aren’t many farmland REITs available.

Also, if you wish to buy these REITs, you’ll need a brokerage account or a stock trading app.

Gladstone Land Corporation (LAND)

Gladstone Land is an equity REIT that grows fresh food for sale in the United States rather than commodity crops. The REIT presently owns over $900 million in farmland and diversifies by cultivating over 45 different crops over 100+ farms. Since its founding in 1997, LAND has paid out continuous monthly dividends to its shareholders.

Farmland Partners Inc (FPI)

Farmland Partners is a younger equity REIT that has amassed more than $1.1 billion in farmland. The REIT focuses on farms that produce commodity crops such as maize, soybeans, and cotton. They are able to take advantage of economies of scale and extensive knowledge of best practices by doing so. Since its IPO in 2014, the company has paid a consistent quarterly dividend.

The Bottomline

Farming has become more important than ever as the world’s population has exploded. This means that investors seeking to diversify their investment portfolios have an opportunity.

Investing in farmland is not a risk-free investment. However, by investing in the right companies and fields, it is possible to create a consistent passive income.

What Is Our #1 Recommendation For Making Money Online In 2021?

Where these Farmland investments fall short is in scalability. 

Because in order to make a good amount of money with farmland real estate, you have to own a lot of it.

And who has that kind of capital to start?

But what if you went digital?

With Digital Real Estate, you will be getting service requests from multiple websites at every minute of the day from people who are willing to pay a lot of money for what you can provide them.

I was watching a YouTube video once where the host made a comment that it isn’t about making a lot of money from one website… it’s about making a little bit of money from lots of different websites.

So, think of it this way….

What if you could have multipole streams of investment income where you operated 10 rental units that you could charge anywhere from $750-1,000 per month?

That’s $7,500-10,000 per month in passive income!

What If You Invested Into 100 Rental Units?

But instead of spending $Millions to buy farmland… you spend a couple of hundred dollars to build websites.

You then get those websites ranked in the search engines for specific home-based services that customers are searching for.

Next, you offer your lead generation system to local business owners who are looking for customers and are willing to pay you for their information.

And Then…

BAM!

You’ve just created a Digital Real Estate Investment Empire that is potentially earning you 4-5 figures in PASSIVE INCOME on a monthly basis without spending a single dime on ads.

With conventional digital real estate, you have to compete with thousands, if not millions of others who are selling the SAME product to the SAME customers.

Unlike Farmland investments, where you’re profiting maybe $250 per property, you could be getting 5-10X THAT.

With Local Lead Generation, the competition is virtually nothing and your profit margins are 85-90%.

Now, I could go on and on, but I’m sure you have tons of questions about how to create Digital Real

Estate assets and start building YOUR digital empire!

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