Agro Sector Ideas

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Farmland - >>> Grow Your Money for Real by Investing in Farmland

Consider a stable, profitable asset that literally puts food on the table.


MoneyWise

By Justin Anderson

Jul. 13, 2021


https://moneywise.com/investing/real-estate/grow-your-money-with-shares-of-farmland?utm_source=syn_oath_mon&utm_medium=B&utm_campaign=18745&utm_content=oath_mon_18745_higher+risk-adjusted+returns


This is a strange and disorienting time, even for seasoned investors. The pandemic flipped whole industries upside down, crytpocurrencies are rallying to record heights and a pack of provocateurs sent GameStop to the moon.

In this climate, many investors are just doing their best to abide by what history has taught them: Volatility comes and goes, but a well-balanced portfolio always does well over the long term.

While that still makes sense, it’s probably wise to add a little extra diversity these days — preferably in something insulated from other asset classes.

And as it turns out, now is a very good time to invest in one of human civilization’s oldest and most reliable sources of wealth.

That’s right: we're talking about farmland.

Real growth potential

Unlike many other types of investments, farmland is intrinsically valuable — come what may, people still need to eat. And with the global population poised to hit 10 billion by 2050, there will be no shortage of mouths to feed.

The rate of return on farmland over the last 47 years was 10.27% — better than average returns on real estate or stocks, according to data from the investing platform FarmTogether.

Over the last 20 years the numbers have been even stronger, with farmland investments yielding a return of 11.98% compared to 8.68% for real estate and 8.78% for the Russell 3000 Index, a capitalization-weighted index that aims to be a benchmark for the U.S stock market.

And here's where it gets really interesting: The United States has less and less of this valuable resource by the day, and much of the remaining supply is about to go on sale.

Farmland is changing hands

The U.S. population is aging, and working the land has always been a demanding job.

While family farms make up 96% of all farms in the country, federal data suggests the next generation isn’t interested in taking up the task themselves. Farmers over age 65 own 40% of the land and outnumber farmers below 35 by a factor of six to one.

The result: A profitable asset is hitting the market that has, until now, been difficult to buy into. Farmland has traditionally been privately held, but as more farmers retire and sell or rent out their land, investors have a rare window.

So how does someone without any experience in agriculture take advantage of this opportunity? Thankfully, you don’t need to grab a pitchfork and you don’t even need to buy an entire farm.

Here’s how to get started

FarmTogether is an all-in-one investment platform that lets qualified investors buy stakes in U.S. farmland. The company pursues attractive properties and then partners with experienced local farmland operators, who manage the land.

Depending on the type of stake you want, you can get a cut from both the leasing fees and crop sales, providing you with a cash income. Then, years down the line after the farm rises in value, you can benefit from appreciation of the land and profits from its sale.

With a minimum initial investment of $15,000, FarmTogether’s offerings are primarily aimed at experienced investors looking to diversify their portfolios with alternative assets. The platform is also restricted to accredited investors with the SEC.

Start by opening a FarmTogether account free of charge. You can sign up without any obligation to invest and you’ll get a sampling of the data and tools that active investors can access.

It’s rare to find an asset that beats other investing options in both returns and stability. With a potentially once-in-a-generation opportunity opening up, take the time to investigate whether farmland should be part of your portfolio.

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