An agriculture investment can take you a long way if you know what you’re doing. It is a highly sustainable industry – much more than the stock market. The value of the land appreciates over time as long as the right people are in charge of it.
Investing in agriculture is something that lasts a long time. The returns will vary depending on factors such as commodity prices and how quickly the land appreciates. There are also location factors to consider. Farmland with specialty crops can have higher returns than those with commodity crops.
Farmland falls under the category of real estate investment. Investors can earn money from it differently, such as leasing the farmers’ property for growing crops. Another way is by becoming part of a partnership through a farm through a crowdfunding platform. Another option would be to invest in ETFs or mutual funds with a focus on agriculture investment.
There are always risks with agricultural investments, just as there are with any investment. However, with farmland, as long as you are careful with your decision making, you can limit those risks. Suppose you don’t already own physical farmland. In that case, you might not want to become the sole owner of any unless you are confident that you will be able to work with a broker to sell it someday.
This limit happens because an individual or LLC cannot easily sell the physical farmland – they must sell it with a broker’s assistance. The shares of investments are typically liquid only once your exit strategy is confirmed.
Crowdfunded farmland offerings are perhaps the most straightforward and safest option for beginners starting with agriculture investment. These are available for accredited investors and have low minimums compared to the minimum requirements for sole ownership, which would require several hundred thousand if not a million dollars.
Agriculture Investment Can Be Hassle-Free
Opt for hassle-free investment services that keep the process as simple as possible. You should have secure access to your account, including documents, comparisons of projected and actual payouts, K-1 tax forms, distributions history, and so forth.
Regardless of which type of investment type you go with, focus on the platform that handles your investment. It should partner with local operators of that physical farmland, negotiates service agreements, and ensure that the practices are sustainable and profitable in the long-term for investors.
Get more information about different types of agriculture investments, including sole ownership and crowdfunding options, at FarmTogether. This platform works only with the best experts, farmers, and other professionals at farms that will likely bring in the most money in the long-term.