The Economic Benefits of Investing in Farmland
December 16, 2019
These days, more and more Americans are investing in agriculture. Farmland can be a great investment because it can diversify your portfolio, hedge against inflation, provide a low level of risk, and may even provide tax benefits. Read on to learn more about some of the economic benefits of investing in farmland.
Any investment advisor worth his salt will tell you that you need to diversify your portfolio and hedge (protect your portfolio) against inflation. If you can find an investment that accomplishes both of these goals at once, then you should probably consider adding it to your portfolio. Many Americans invest in the stock market, which historically does provide significant gains over inflation. However, too many Americans only invest in the stock market or in retirement accounts that may actually be losing money against inflation. An investment in farmland accomplishes both portfolio diversification a comfortable hedge against inflation. Farmland is a real estate investment, and real estate investments have long been considered to be one of the best ways to protect your portfolio from inflation.
One of the most attractive benefits of an investment in farmland is the low level of risk. If you have a large portion of your portfolio in the stock market, you are exposed to a relatively high level of risk. Data shows that farmland has solid capital assurance attributes over longer periods of time. Unlike other asset classes, such as mining or oil and gas, farmland is a renewable resource which has the potential to stay productive and profitable, indefinitely.
Of course. we recommend consulting a tax professional to inquire these tax benefits, but many individuals invest in farmland to limit their tax liability. There are a variety of tax incentives associated with farmland real estate. This may include standard charges (inheritance, income and capital taxes). These tax benefits can increase net profits in a farmland investment which may not be seen with investments in other asset classes.
If you want to reap the unique benefits of an investment in farmland, we invite you to get started in a simple and straightforward way. With FarmCek, you can take fractional ownership in a working farm and reap the benefits, annually. To get started, simply create a complimentary account and explore the offerings.
Curious about the options for investing in agriculture? You can learn more with our Ultimate Guide to Investing in Farmland.
