It’s but logical. One thing that will never run out of demand is food. That’s a given. We all get hungry every day. And for some centuries there, people have never grown tired of food. In other words, it’s essential.
If there is one industry that has been the backbone of the food we eat, the farmland is at the center of it. Think about it: corn, vegetables, rice, soybean. The list is simply exhaustive. That’s telling you investing in farmland is one of the most lucrative investments anybody can make. Farmland represents a 9-trillion market worldwide. And the best part is its low volatility and extremely high returns.
You will be surprised to find out that there are over 2 million farmlands in operation in the U.S. With 2.6 million farmers, you have about 1.3% of the workforce in the superpower nation growing its food basket. Indeed, a small but mighty percentage. The question now is how will you get a piece of such a lucrative market. Here’s a good start.
The first essential to deal with is buying farmland. Take note that buying farmland isn’t like getting regular land. No, sir. You’ll have to make sure the land you’re getting will give you healthy produce.
When it comes to getting loans, it’s different from what you get with a usual mortgage. For one, the duration for paying up in a farmland loan is usually within 5 years. And then the down payment and interest rates are higher. So if you have the money, just pay in full at once. That way, you don’t have to be worried about interest rates.
Another thing about farmland is handling it. You need to care for the land well. That’s because the care of the land affects the effectiveness of the land. If you don’t know how to, then get someone to do it. This step is important to maximize the profitability of the land.
Things To Know About Farmland
So how do you earn from your farmland investment? It doesn’t have to be done in a certain way. There’s a lot of ways to earn you can try out with farmland investment. And it would still yield returns.
The first option is for you to lease the land. As mentioned before, there are many farmers in the United States. And many, for one, can’t afford to get a land of their own. So when you lease the land, you constantly get returns on the land without working it with your own hands.
The next option is using the land for farming activities. That, of course, is if you are interested in it. This is a good option. Just be ready for other expenses.
You have to think about hiring farmers that can work for you. Decide on what you will be planting or what livestock you would rear.
Then you need to get equipment. For equipment, it’s best to think long-term. Efficient and strong machines such as a disc mower from Krone could get you the ROI (return of investment) for the long haul. To note, a Krone brand disc mower offers you easy and clean cuts. It can cut your farm work in half. In the long run, you’ll be glad you got these types of machines that ease your burden and are durable enough to last for a lifetime.
Another option is just leaving the farmland for some years. Usually, the price of the land would keep rising over the years. With this, you can make so much profit when you want to sell it.
Why Invest In Farmland Now?
Farmland investment is very stable. As mentioned above, there’s a lot that can be done with the farmland. And whichever option you choose, you can be sure you’ll be making profits. The stability is there because it is observed to be inflation-resistant compared to other investments. Everybody eats all the time, right?
Also, if you farm on the land, there are certain taxes you wouldn’t have to pay. No matter how much money you make. A good example is the estate tax. At least, you don’t have to worry about that.
Lastly, there’s the support of the government. Just in case you want to farm on the land or rear livestock, you can get government grants. It’s a long and winding road, no doubt. But the returns could last a lifetime and beyond.