10 Important Benefits For Investors In Farmland To Consider

NJ Landowner Blogs | 2024

As the global population continues to grow, so will demand for food. This has led to an increasing interest in investing in farmland, as it can provide many benefits for investors. Here are 10 pros of investing in farmland:

1. Diversification: Adding farmland to your investment portfolio can help diversify your assets and potentially reduce risk.

2. Inflation hedge: Farmland has historically been a good hedge against inflation, as the value of land tends to increase with inflation and has a low property tax burden compared to other commercial real estate.

3. Potential for capital appreciation: Farmland values have generally trended upwards over time and hold solid potential for continued appreciation in the future.

4. Potential for rental income: If you purchase farmland with the intention of leasing it to farmers, you may be able to generate rental income.

5. Strong demand for food: The “buy local” and “eat local” movement has many people looking at their food mileage and giving higher consideration of their “foodshed.” This will lead to increased demand for farmland in Northern New Jersey and potential price appreciation.

6. Limited supply: There is a limited supply of land available for agriculture, which leads to increased competition and higher prices for farmland.

7. Agricultural tax benefits: In some cases, owning farmland can provide tax benefits, such as lower property taxes or the ability to claim certain expenses as deductions. Have you ever heard of Schedule F?

8. Environmental benefits: Many investors see purchasing farmland as a way to support sustainable agriculture and promote conservation efforts.

9. Potential for additional income: Some farmers and hunt clubs may be willing to pay for the rights to hunt on your farmland, or you may be able to generate income from timber or harvesting other natural resources. If the farm is not already a “preserved farm”, selling the development rights can be a significant income stream to offset the fee simple purchase.

10. Sense of accomplishment: Owning and investing in farmland can be a fulfilling experience, as you are able to contribute to the production of food and potentially make a positive impact on the environment.

Overall, purchasing farmland can be a viable investment option for those looking to diversify their portfolio and potentially generate income. It is important for investors to carefully consider their goals and do thorough research before making any investment decisions. Pinto Consulting has a network of landowners and farmers in New Jersey. Very often a full-time farmer cannot finance the purchase of additional farmland in Northern New Jersey but are interested in a long-term lease arrangement. If you
are an investor and seek this situation, please contact us.

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