Investing in certain companies and industries can experience some volatility which is why it’s essential to have a diverse portfolio. Most investments have uncertain returns, but one of human civilization’s most reliable and oldest sources of wealth holds many promises in farmland.
Farmland is a more uncommon investment that should become more common because it is intrinsically valuable and is prevalent in every person’s life as an essential part of life. Investing in farmland is investing in a product that people need rather than want compared to other investment industries.
Reports estimate that by 2050, the human population will reach 10 billion people and drive the supply of food from farmlands. As the need for food increases, the future of investing in farmland has limitless potential.
Along with the inevitable growing demand for food from farmland, the rate of return for investments in farmland over the last 47 years is estimated at over 10%, according to the FarmTogether investing platform. Compared to other returns for stocks or real estate, farmland is better than average return rates.
Over the last 20 years, farmland investments produced a return of over 11% compared to the Russell 3000 Index (a weighted system setting the benchmark for the U.S. stock market) with 8.78% and real estate with 8.68%. The U.S. is increasingly losing more of this valuable resource by the day, and the remaining supply will be up for sale.
Roughly 96% of American farms are family farms, and reports indicate that the next generations of these family farms are less likely to continue the family legacy. A study shows that farmers over the age of 65 own 40% of the land, outnumbering farmers under the age of 35 at the rate of six to one.
The result of this shift is that this profitable asset that was once difficult to buy into is hitting the market for open investors. In the past, farmland was privately held, but investors have a rare open window to invest as more farmers retire, resulting in renting or selling their land.
Investing in farmland might seem like you’re signing up to become a farmer, but FarmTogether is an all-in-one investment platform for qualified investors to buy stakes in U.S. farmland. FarmTogether partners with experienced farmers who manage the land after pursuing attractive properties.
This investment opportunity depends on the types of stakes you want in the company that can provide you with cash income by getting a cut from both the crop sales and leasing fees. If the farm you invest in raises in value, investors can benefit from the profits through its sale and appreciation of the land value over time.
FarmTogether currently has specific requirements to invest, but you can start by opening an account with FarmingTogether that is free of charge without the obligation to invest. Users with a FarmTogether account have access to sampling data, and active investors can use tool features.