Does your only farming knowledge come from an old nursery rhyme or the theme from “Green Acres”?
Perhaps you work in a tower and live in a high-rise apartment in the city. If so, you might think purchasing farmland is not a good investment.
However, investing in farmland offers a distinct asset class that can enable you to grow your wealth.
This article will go over investing in farmland to see if it really is the best fit for you.
Investing In Farmland is a course that teaches you about real estate investing.
If you’ve read my other articles on real estate investing, you’ll know there are 3 primary ways to invest:
Wholesaling, buy-and-hold, and flipping.
While each has pros and cons, there is a ton of potential for success investing in real estate.
Real estate has created some of the largest fortunes in world history.
That being said, you should take some time to think about something seriously:
Is now the best time for YOU to get into real estate investing?
Because despite the potential upside, investing in properties or land takes a lot of capital, and is very labor intensive.
That means if you:
- Have less than 3 hours per day, OR
- Aren’t sitting on $20K+ in disposable income
This may not be the best time for you to start investing in physical real estate.
Don’t get me wrong, real estate investing can be an amazing way to protect your assets while generating cash – but there’s a time and a place for it.
But there’s good news!
All you need is a system to generate the cash (& free time) you need to be ready for real estate investing.
My preferred method of getting there is by becoming a Digital Landlord
It takes the benefits of real estate investing but removes many of the barriers (& annoyances), like:
- Small cash flow on properties
- Having to take out debt
- Dealing with repairs and upkeep
- Dealing with tenants
The cool part is that the income is mostly recurring (AKA semi-passive).
You could make anywhere from $2,000-$10,000+ per month doing it.
You can build it as big (or small) as you feel like, without the annoyances I listed above.
If that sounds interesting, you might want to think about becoming a Digital Landlord.
Then, you can take the profits and start investing in physical real estate a year or two from now.
If you wanna see what Investing In Farmland In 2022 looks like on the inside, keep reading.
What Is Farmland Investing?
As the name suggests, farmland investing means making investments that are somehow connected to agricultural production. This is classified as real estate investing because, after all, the land is real estate.
But instead of purchasing residential or commercial buildings, you are investing in agricultural land.
USDA Reports 911M Acres Of Farmland
The USDA estimates that there are about 911 million acres of farmland in the United States. It may surprise you that more than half of that land is rented, meaning farmers are paying landowners for the right to use it.
Non-operator landlords really own the majority of farmland that is rented out. The people who own this land don’t engage in farming. On the other hand, operator landlords are landowners actively involved in farming.
According to the USDA, these non-operator landlords hold 283 million acres or 30% of all farmland in the US. These people 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 their farms personally.
Every day, a growing number of people are discovering investment opportunities in farmland but don’t necessarily participate 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.
Is Farmland A Good Investment?
Everyone experienced a challenging year in 2021. There were few opportunities for investing.
Corporate leaders, investors, and ordinary citizens searched for a stable foundation in a chaotic year.
The second half of 2020 was a record-breaking year for land sales, thanks partly to investors rediscovering land as a haven. They discovered hope by investing in farming.
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 the city but to monetize recreational options such as hunting and fishing.
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 over 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, rural land prices are expected to go up in many sections of the country in 2022, with the Southeast seeing exceptionally high growth.
Land Investing Versus Equity Investing
Investors must, of course, do their research and understand the difference between equity and land investing before investing.
For instance, investors need to be aware of the differences between dealing with land and dealing with stocks so that they don’t end up paying too much for the property or the improvements they deem necessary 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 doesn’t rule out the possibility of a positive impact on expected returns.
Will Farmland Investment Set The Future Trends?
Farmland investing may not be as popular or glamorous as equity in tech firms. Nevertheless, you might be shocked to learn that Investors in farmland rest well at night knowing they are putting money into a reliable asset with low volatility.
For investors willing to think outside the box and return to an asset class that has proven its value and stability for decades, rural real estate will provide a wide range of alternatives in 2022.
What Are The Risks Of Farmland Investing?
Investing in farmland has several significant risks. The first risk is liquidity.
If you possess physical farmland, it isn’t easy 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).
On the other hand, the farm income from these farmlands 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.
The second risk of farmland is a knowledge problem, hindering great returns.
Unless you are well-versed in the asset classes, obtaining a decent deal on the land might be difficult.
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 many buyers and sellers.
And in general, the lack of knowledge among many buyers and sellers leads to a reasonable share price.
Why Invest In Farmland Now?
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.
The American Farmland Trust estimates 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.
It’s becoming increasingly unlikely that the new buyers will be farmers. Over the previous several decades, the rising general farmland values have resulted in a diminishing pool of farmers who can afford to buy rather than rent new property (NPR).
If someone inherits land and doesn’t want to continue the farm or doesn’t 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. 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 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!
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. According to current tax legislation, real estate follows a beneficial set of rules regarding taxes.
You can take advantage of these tax breaks if you acquire farmland shares through internet platforms or buy a farm directly. Regrettably, publicly-traded REITs don’t 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 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 to stay afloat. AcreTrader has carved out a niche for itself, leading to rapid market dominance.
FarmTogether is a farmland crowdfunding website specializing in purchasing lucrative farmland around the west coast. As a result, an investor might be able to obtain cash flow from their investment immediately.
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 is an investment platform that specializes in converting conventional farmland to organic farmland. Farmland LP can 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.
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 must 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.
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. You’d have to sift through a slew of intricate financial paperwork to answer that question.
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 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.
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’s possible to create a consistent passive income.
Are There Alternatives To Investing In Farmland?
Yes, there are plenty of other business models to choose from if you want to pursue this making money online. Here are just a few:
Is Investing In Farmland A Scam?
So, time for the $1,000,000 question – is Investing In Farmland a scam?
No, not technically. You can 100% make money with this program, though it’s not nearly as simple as they make it seem.
As with most businesses, there is A LOT of work to be done upfront & no guarantee of you being successful.
Not to mention the profit margins are typically pretty small.
Don’t get me wrong, I’m a big proponent of front-loading work now, so you can reap the rewards later.
But if I’m gonna do that, I want the rewards to be HIGH and virtually guaranteed.
I’d rather put in that same 3 months of work (in my spare time) & build a handful of Digital Rental Properties that each produce $500-$2,000 checks every single month afterward (AKA recurring income).
And the cool part is that you can do it in a lot less time than 3-months (I personally did it in my first 2 weeks of being a Digital Landlord).
Unlike physical real estate, you can do it from anywhere in the world, so it’s a genuine “laptop-lifestyle” business.
All you need is an internet connection.
Some of my friends are Digital Landlords that run their 6-figure businesses from:
- Camping trips at national parks
- Beachfront in Hawaii
- On the road in a camper van (with a pet pig!)
They focus on living an enjoyable life first, and focus on income second. All thanks to this program.
They can take weeks or months off, and money keeps rolling in.
Living happily is the top priority.
If the thought of living perpetually at your dream vacation spot interests you, being a Digital Landlord might be for you!
What’s My #1 Recommendation For Making Money Online In 2022?
I’ve personally tried all of the major online business models:
- I’ve sold fidget spinners through Amazon FBA
- I’ve drop-shipped a toilet bowl putting green on Shopify
- I’ve sold women’s health supplements via Clickbank affiliate marketing
And I made money with all of them, so trust me when I say: there is no “perfect” business model.
It’s worth noting that I FULLY endorse real estate investing as a way to grow wealth, and that’s why I invest my own money in commercial and residential real estate.
That being said, my #1 recommendation for making real money online as a beginner is, hands-down: being a Digital Landlord.
Whether you’re a complete newbie, or you’ve been around the block before but have never had that “big win” to propel you forward, becoming a Digital Landlord is for you.
Time: If you’ve got a spare hour or two each day, you can do this. If you want to drop everything and go all in, you can do this. More time obviously means faster results, but even putting in a few hours per day is enough to see real success.
And because of that flexibility, you don’t need to trade your time for money. Once the income starts, it’s recurring.
That means you can take a month off, travel the country, pursue a passion project, chill on the beach, or charter a boat across the world.
But you can only do that once you’ve created an income stream that doesn’t require YOU to be there all day, every day.
Real estate investing is a FULL-TIME JOB. If you stop finding deals, your money dries up.
Ownership & Control: Unless you’re buying your properties in cash, you don’t technically own the properties – the lender does.
If you miss a single payment, the property can be taken from you.
Why pour your soul into a business that could be taken away from you at the drop of a dime?
When you’re a Digital Landlord, you literally own all of the assets, which means you have ultimate control.
Ongoing costs: With real estate, profit margins are actually pretty slim. Real wealth is made in owning the assets, and owning A LOT of them.
Being a Digital Landlord, your profit margin is nearly 100%. Watch here to learn how.
Just a reminder: these Digital Rental Properties are worth (at a minimum) $500/mo in semi-passive income. And each time you create another one, your income increases, and the effort put into creating the next property decreases.
Best-case scenario, you have properties bringing in over $3,000+/mo on auto-pilot.
It’s Effectively Copy-Paste: Here’s my favorite part: once you have your first Digital Rental Property up, you can literally copy-paste another version of it and find another willing “renter” in a few days. DOUBLING your income doesn’t get much easier than that…
If you wanted to double your income with real estate investing, you would need twice as many properties, or double your profit margins on each property. And I can guarantee you, that’s a lot harder than a few clicks & a phone call.
Make Money Helping Real People: When you’re a Digital Landlord, you’re helping solve REAL problems that people are ASKING for help with:
Small local businesses around the world need one thing: customers. Without them, their business would fall apart. If you can provide those customers, they’re going to be really happy – and they’re going to pay you for it.
You’re helping a struggling mother or father put food on the table for their families, put their kids through college, or simply live life a little bit more comfortably.
Having this type of impact on the world is what will help you sleep soundly at night.
So, the rest is up to you. You could keep looking at other opportunities, like Investing In Farmland, which might make you money.
You could keep researching and researching for the next few months (or few years), never making a concrete decision.
OR, you can look deep inside, think about those dreams, hopes, & desires, and make the decision to ACTUALLY make it happen, just like it has for thousands of other students before you.
Making a fortune while actually helping real people that need it.
If this sounds like you, click here to see how it all works.