Celebrities and moguls Kanye West and Jeffree Star are just two of many multimillionaires who recently made the big move from industrial places like Los Angeles and New York, to the humbler and quieter life on a farm or a ranch. And it’s not just these two multimillionaires that made this big-money move— heavyweights like Bill Gates and Thomas Peterffy are also investing in United States farmland in their own ways.
While we may not be as wealthy as Gates, West, and Star, even regular folk and smaller investors would benefit greatly from investing in farmland. Here are the advantages of getting ahead in this new trend.
Investing in farmland builds equity
One of the biggest reasons entrepreneurs invest in farmland is so they can build equity. Having equity can open more doors for other financial opportunities, which includes retirement income, and having an easier time passing down resources to future generations.
If you are an investor, you can use whatever income you have that isn’t being used for taxes and expenses, as investments in additional land. Doing this will also help you gain more opportunities for easier borrowing processes in the long term.
Owning agricultural land presents tax benefits
One of the biggest reasons why businessmen and investors are also looking towards owning farmland is the tax benefits it yields. The types of benefits will depend on the kind of crop that is being produced on the farm, as well as the structure of the investment deal.
Perhaps the most common example of tax benefits for landowners is agreeable property tax rates. You might be surprised to know that every state has better farmland taxes compared to other types of land properties, like residential and commercial. But the process of claiming these tax benefits will vary from state to state so before you invest in land, identify first if the farm is eligible for these tax breaks. You will usually know by determining the land’s size and income.
Having your own farm is an excellent real estate endeavor
If you have always wanted to build your dream home that you can pass on to future generations or you can sell or rent out eventually, situating it in a ranch or farm can instantly increase its value, much like Ashton Kutcher and Mila Kunis’ modern farmhouse in Los Angeles.
Building your dream villa or mansion in your own farmland will allow you to design the home however way you want it: You can hire a contractor to build a pickleball court or other types of courts because you will have the square footage for it, you can place the stables near your main home so that your kids can grow up amidst horses—the sky’s the limit! Building your dream home on a farm will ensure that you don’t have to hold back design and feature-wise because you won’t have to deal with a lot of limitations or restrictions.
Agricultural land investments diversify your portfolio
We already knew this even before the pandemic, but the global health and economic crisis enforced it even more: Investors cannot place all their eggs in one basket. If you invest in farmland, you don’t have to worry about only having assets in the stock market, which can be volatile and can crash at any given time. Agricultural land, unlike the stock market, is usually known for faring better in terms of stability.
Having farmland can also help you expect favorable returns, especially when set side by side with bonds and stocks. Agricultural land usually has better value appreciation, and the demand will remain high as time goes on.
Having farmland will help you supply food
As the global population continues to grow, so will the demand for food and produce. The numbers suggest that the global population may reach 9.7 billion by the time 2050 arrives, and the world might require 70 percent more food than we consume today. Moreover, consumers are more inclined towards healthy, organic food, and they are more likely to care about how the food they consume is produced, so you can also have plenty of freedom to decide how you grow animal products and land produce. It’s a market that you can tap into, and a demand that you can help meet for the years to come.
Investing in farmland yields plenty of economic, and even personal, benefits. Consider this path and give the next generations in your family a secure future, and give the planet a fighting chance by working the land in a way that doesn’t harm it.