Invest in Farmland

Mark Twain once said, “Buy land, they're not making it anymore”, and he was absolutely right. Farmland is a tangible asset that will hold its value no matter what happens. Farmland is an appealing investment because you can receive income from rents and get appreciation that tends to run ahead of inflation.

My family is in the orange farming business and we don’t make much money by selling the oranges after all the labor costs. But on paper, we have made a boatload of cash from land appreciation. That really doesn’t matter because we will never sell our land, as it’s a great long- term investment. Let me explain.

Many farmers are getting a lot more income due to higher crop prices, growing food demand and increasing demand for bio-fuels. So it’s not surprising that farmland prices are on the rise.

A government can always print more currency, but it can’t make new farmland.



Investing in farmland is a great idea because the world’s population will continue to grow and so will the demand for farmland. The farmland is necessary to grow the food for all these extra people. So land is essentially the most valuable thing that you can possibly own.

How to invest in farmland

If you have the time and money, then buy a farm in Iowa and farm it or rent it out for the income. Good farmland in Iowa goes for about $4,500 per acre and you can aim for a 12% per year return with rental income and land appreciation.

If you have lots of time, you could pick up cheap land in a developing country for a few hundred bucks an acre and bring it into production or improve it to raise yields. My wife and I looked at some farmland the last time we were in Brazil in 2004 and we could have picked up some cheap land for only $100 an acre. The problem is the land was in an extremely remote area. We decided against it because it would have been difficult for us to develop since we live in the US and don’t speak Portuguese.

If you don’t have the time to become a farmer, then I suggest you buy stock in a timber producer. One of my favorites is Plum Creek Timber (PCL). PCL owns and manages millions of acres of timberland in the United States and its products include lumber products, plywood, medium density fiberboard, and related by-products, such as wood chips.

Best Wishes,

Ted Peroulakis

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Disclaimer…The subject matters expressed above is based purely on technical analysis and personal opinions of the writer. it is not a solicitation to buy or sell