This is a great point - despite the cautions I posted above, owning farmland directly isn't that much of a hassle and much simpler than owning & renting a house (as long as you do a little research).I am not sure what part of the country you are in, but in states where ag production is a main economic driver, the opportunity to purchase land is always there. You would be surprised what cash rentals go for on crop land and you get paid regardless of how the crop does and you will usually have multiple people lined up to rent if the current tenant is not reliable/good. I know a guy who was into rental properties for 20+ years and sold every single one of them and bought up ag land. He said it was a relief not to deal with the headaches associated with renting properties these days, where is seems tenant "rights" supersede the owners rights. He has long-term rental agreements on his land that pays for property taxes, insurance, and a steady net income each year. Instead of buying into a fund, that may be shady, dive in and buy the land yourself. It might take more that 5% of your portfolio, but you would be getting what you are trying to get now.
On the other hand, land prices have done well in recent years but could be tapering off. Here's a report published last week by the Kansas State department of agricultural economics (they have a lot of good info on their website):
"Weakening commodity prices, higher interest rates and lower net farm income will translate into steady or perhaps decreasing land values in 2024. With a softening of the farm economy from 2023 to 2034, land values will not increase at the levels in 2022 and 2023....Land values were reported to increase by 25.2% in 2022 and 16.3% in 2023 which are large increases based on historical changes where about 1 in 4 years see an increase of more than 10%. It is likely that land value increases in 2024 will be close to zero. Since 1950, land values have increased by an average of 5.4% annually."
Statistics: Posted by Lookingforanswers — Fri Feb 09, 2024 3:42 pm
