Farmland has been in the news a lot lately. Bill Gates, for one, saw food shortages coming years ago. His foresight explains his rampant buying of American farmland. His purchases have been met with plenty of controversy and backlash — as well as scathing reviews from Russell Brand.
Gates knows what he’s doing, and his peers mimic his strategy.
Gates’ $30 billion investment firm Cascade Investment LLC handles his investments, which include companies like United Parcel Service Inc., Ecolab Inc. and Crown Castle. One of Gates’ most notable investments is his heavy investment in Berkshire Hathaway, whose CEO is none other than fellow farmland aficionado and billionaire, Warren Buffett.
While Buffett owns a family farm in Illinois, Gates’ investments have been next level. Gates owns around 240,000 acres of tillable farmland in the U.S. Smart. Investing in U.S. farmland can help keep food on your table. What makes the investment look even smarter is the recent statistics from the U.S. Department of Agriculture and research by The Center Square, showing that about 30% of U.S. farmland is rented out by owners who serve as landlords and aren’t involved in farming.
Farming and owning farmland are lucrative ventures. A survey by the Illinois Society of Professional Farm Managers indicated that Illinois farmland values are up 18% over the past year.
The trend is even more eye-opening the further you dig. “If you put last year’s gains and then the first half of this year’s gains, in certain parts of the state and certain classifications, you are looking at a 40% jump in 18 months,” Luke Worrell, Chairmen of the Illinois Society of Professional Farm Managers, said.
Illinois isn’t alone. Farmland values increased in neighboring states as well, up over 30% in Indiana and 29% in Iowa in the past year.
How can you get in on the action?
Real Estate Investment Trusts (REITs)
Real estate investment trusts (REITs) are funds that allow users to invest in parts of many real estate projects and types. Farmland REITs like Farmland Partners FPI and Gladstone LAND are two examples of farm-related REITs; however, plenty of other industry-specific options and hybrids allow you to invest in commercial, residential, retail, warehouse, and other types of REITs.
Crowdfunding makes it possible for fractional ownership and a discounted rate, as well as the possibility for an incredibly diverse set of land plots instead of just one. One of the most popular platforms is AcreTrader, which releases new private equity farmland offerings almost every week.
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