Reasons why you should invest in farmland

Reasons why you should invest in farmland

Many investors are pretty clueless about where to invest during this post-pandemic scenario. After a long downtime, the market has started to respond again. And it’s a green signal for many investors. When it comes to investment, we can see that many people go for real estate, ETFs, mutual funds, stocks, and bonds. Without any doubt, there are quite common options that we have even before the COVID-19 pandemic. The pandemic has proved that the market is quite uncertain and we always need to think prior to others otherwise surviving and making a profit will be a mere dream. So, what’s the best investment way during this post-pandemic scene? The answer is you can invest in farmland. 

Farmland? Yes, farmland. We are not asking you to go and start farming right now. But farmland can be an effective investment that can make your future quite bright. 

Why should you invest in Farmland? 

  1. A natural hedge against market inflation  

Just like Gold, many investors use farmland as a natural hedge against market inflation. The value of United States farmland has been about 70% correlated with CPI. by investing in farmlands, investors can ensure two sources of returns. Investors can get passive income from periodic rental along with crop payments. The second option is selling the land after a while. The investor must wait for the increase in the price of the farmland. 

  • It offers attractive returns with low volatility 

According to investment experts, farmland is not only a good option to perform in such an inflammatory environment but also ensures good annual returns. We can see that between 1992  and 2020, farmland investment has offered average annual returns of nearly 11%. This return includes both income and price appreciation. If we take a look at the stock market, we can see that over the same period, it has offered 7.8% average returns. In the case of gold investment, it has offered 6.0% average returns during the same period. 

  • Farmland ensures a good passive income 

Among all other reasons for investing in farmland, one prominent one is it offers a good passive income. You already know that the investor can use the famland for rental and crop payments. The investor will just offer the land on rent and get rents as well as crops. Here, the investor does not need to put in any direct effort. The amount of effort is very small. In order to ensure a good passive income and to keep the investment secure to earn bigger profits in the future, investing in farmland is an intelligent investment plan. 

  • Investing in farmland is easier than ever 

Technology-enabled investment platforms have made it extremely easy to invest in farmland. If an investor is in the beginner phase yet he/she can easily invest in farmland quite easily without facing any interruption. We can notice that for a time, the farmland investment was limited to a small group of institutional investors and ultra-high net worth investors. There was a barrier to investing in farmland. But today, there is nothing such barrier. 

These are the top 4 reasons that prove why should we go for farmland investment during this post-pandemic phase.

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