# Farmland investing



## reccoso (Dec 16, 2010)

So what's the best way to invest on farmland?

Anyone have any experiences with AGCapita or Bonnefield?


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## Just a Guy (Mar 27, 2012)

Be a farmer so that you can make money off the land if it doesn't appreciate in value. 

Land investing is very high risk if you don't know what you are doing. Companies that offer to "do it for you", make their money up front, regardless of what happens with the investment.


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## sags (May 15, 2010)

It worked when farm land prices were rising at an astronomical rate.

The strategy of buying land today and selling it for a profit in a few years falls apart when land prices stagnate or start to fall...........which they have.


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## Berubeland (Sep 6, 2009)

FYI lots of Ponzi's in this space. First of all, lots of these companies will use "straw buyers" so the real buyer will buy from the farmer, their buyer will sell to them at an inflated price. Then there is no income in this type of investing so just a pure speculative play. 

This is a bad idea.


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## Just a Guy (Mar 27, 2012)

sags said:


> It worked when farm land prices were rising at an astronomical rate.
> 
> The strategy of buying land today and selling it for a profit in a few years falls apart when land prices stagnate or start to fall...........which they have.


I may also point out, that prices go up "on paper", which is different from "in reality". In real estate, the actual value is more a "random guess" than a true value. You need someone to want to pay you that amount.

With houses, in a big city, there is quite a demand for real estate, so it's pretty easy to sell relative to rural property. The average urban property sells in under 3 months, the average rural property takes a lot longer...not many people want 100's or even 1000's of acres in the middle of nowhere. These properties can be an albatross around your neck.

Of course, the novice investor can claim to own large swaths of land, worth a small fortune...but they need some other fool to actually buy it from them. Just because they paid a fortune for it, doesn't make it worth anything close to what they paid, or think it's worth.

Once again, I suggest reading this entire thread...

http://www.financialwisdomforum.org/forum/viewtopic.php?f=29&t=105756


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## samy44483 (Mar 31, 2015)

you are being to negative,god is not making any more land.paper money loses value everyday.with global warming farmers will be able to grow crops that will get them a better return


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## Just a Guy (Mar 27, 2012)

Farmers are a dying breed. How many people even know how to grow food anymore? No one in the first world wants to live in the middle of nowhere. We'll probably wind up importing farmers like we do for all the other jobs we feel to good to do ourselves.

Btw, most people wouldn't accuse me of being negative on real estate. I am however, quite negative on bad real estate deals.


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## sags (May 15, 2010)

There are investors who buy productive farmland and then rent it out every year on a per acre or crop share basis.

As land values went up, per annum rental rates also went up.

Land rent prices is dependent on commodity prices though, and can vary from year to year, and from a more productive acreage than a less productive acreage.

Average yearly crop yields for land is available at government or Farm Credit websites.

Land rent usually falls in the 6% of land price per year range.

It is a safe investment for someone with cash to pay for the land, that they will receive some return on their capital every year.

Pasture land will cost much less and will return a much lower rent every year.

Non productive vacant rural land will usually not have any annual return at all.

Buying and renting out farmland has several noteworthy advantages.

The rents are long term, no less than one year and often for multiple years. The rent is set and paid at the start of the year. There are no maintenance costs or tenant vacancies for the landlord to deal with. Many people who own land and rent it out, never visit the land or do anything but cash the rental cheque every year. Farming families that are expanding often rent land from retired neighbours for decades.

There are also some risks...........such as poor farming methods that deplete the land's growing capacity, and poor grain prices which lower the rent.

Notwithstanding the above it is virtually impossible to borrow to buy and rent out farmland. The lenders will only lend to people who are farming the land themselves.

Farm Credit isn't allowed by their mandate to lend to land "investors".

So cash is king in this real estate space.


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## samy44483 (Mar 31, 2015)

the worlds population keeps growing,every human has to eat,the food has to come from somewhere farming and farmland are going to be a precious commodity going forward/
you cant eat paper money


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## none (Jan 15, 2013)

samy44483 said:


> the worlds population keeps growing,every human has to eat,the food has to come from somewhere farming and farmland are going to be a precious commodity going forward/
> you cant eat paper money


No but you can buy food with it.


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## samy44483 (Mar 31, 2015)

agcapita fund 2 redeemed in q1 2015 net profit for investors 60%


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## samy44483 (Mar 31, 2015)

CPPIB invested in sask farmland


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