8 Reasons Why Farmland Could Be Your Best Investment in 2020
In the face of global supply chain disruptions and a falling stock market that may get much worse, you may be wondering where to put your money to weather the current storm.
Here are 8 reasons why you should consider owning farmland.
1. Land performs well
Since 1990, farmland has outperformed most other major asset classes over time. (1) Land values almost never decline but rather consistently increase in value. For the past 47 years, US farmland has yielded returns of over 10%, with appreciation of 12% in the last 20 years. (2)
2. Land performs differently than other asset classes
Farmland negatively correlates with other asset classes such as the stock market, so it’s a good way to diversify your portfolio. (When the stock market goes down, land values tend to go up.) For example, in the 2008 recession, farmland continued to increase in value. (1)
3. Supply is shrinking
Productive, fertile land is a finite resource. Farmland is currently disappearing at an average rate of 3 acres per minute in the US due to urbanization. (3, 4, 5)
4. Demand is increasing
The agricultural industry is under pressure to produce more food for more people. By 2050, we will need to increase global crop production by 70% to feed the world. (6)
5. The tipping point is near
Technology, higher crop yields, and better equipment won’t always be able to produce the economies of scale to stay ahead of global food demand. Food surpluses and low commodity prices may be replaced by food shortages and high prices as soon as 2027. (7)
6. You control the food supply
Once that tipping point occurs, land prices will likely see a sharp increase in value as the income potential per acre will drive up values.
7. No farming knowledge required
The landowner doesn’t have to know anything about farming. You can hire a farm manager or lease the land to a producer, bringing you year roundly passive income.
8. There’s still a chance to get in on this
Some of the best, most highly productive land in America is still available at affordable prices. Today, for example, $3.6 million could get you a luxury home in a major city, or it could get you a 4,300-acre wheat farm in Montana that can be entirely managed by only two workers with some additional help at harvest time.
Sound interesting but don’t know where to start?
Start by looking at properties with a real estate agent who knows farmland. Marv Van Houten has been a farmer since he was a young man, and has been in real estate for over 25 years. He will tell you the good, the bad and the indifferent about a property.
If you’re considering grazing land, JR Breen knows ranching at a deep level and can help you navigate the buying process.
American Land Brokers specializes in offering uncommon insight to the discerning buyer. We focus on land, and we’re here to help connect you with agricultural property in the Midwest.
Browse properties at American Land Brokers to see what’s currently on the market, and contact our agents today to start the process.
MARV VAN HOUTEN