Learn the Ins and Outs of an Agriculture REIT for Smart Investing

Investing in an agriculture REIT is a great way to benefit from farming practices without actually having to own a farm or be a farmer.


agriculture REIT

Farmers are often considered the backbone of the country, and with good reason. Without high-quality farms growing large amounts of food, the country would fall on hard times. From an economic and investing perspective, it makes sense to want to put some money into the agricultural environment. An agriculture REIT might be the way to do it.

Why? If you don’t know anything about farming, it’s hard to know where to begin with investing in the agricultural industry. There are a few different publicly traded companies that offer stock in their businesses, including companies that focus on production, distribution, and supporting industries such as seed, fertilizer, and equipment providers. Still, what about investing in the land itself?

An agricultural REIT or farmland REIT is a type of real estate investment trust that owns the land and leases it to farmers. This is the closest you can come to owning your own farm without having to work on it or understand the details of the work behind America’s most important industry.

Free Now!

When you’re buying a new house for yourself—or even considering an investment property—you should know all the tips for saving time and money … and making money when you transact. All revealed now in this FREE report, Knowing How Much You Can Afford for a House and Other Tips for Profitable Real Estate Investing.

Why investing in farming with an agriculture REIT is a smart idea

Agriculture is essential to society. Since it is so important, it is a viable investment option. If agriculture fails, many other things fail with it. There is a lot of support behind the agricultural community because people and businesses depend on their production.

This doesn’t mean farms don’t fail. Of course, they can, just like anything else. If you depend on a farm with poor management or somebody that doesn’t know what they’re doing, that farm isn’t likely to succeed. Environmental factors can’t be controlled and could wreak havoc on a farm’s production no matter how good the management is.

With all this to consider, having a real estate investment trust with vetted farming options ahead of time takes care of the leg work for you. They’ve found dependable land and will lease it to reliable farmers to provide the best chance for success. Plus, an agriculture REIT offers an easy way to diversify across many types of farmland and crop production for greater safety, just like somebody would do with stocks.

As another benefit, owning land through an agriculture REIT is by far the most liquid way to own property since you can sell it quickly on an exchange.

Understanding background information on agriculture REITs

One of the important distinctions to make is how the REIT works. It could be a debt or equity REIT. An equity REIT will operate by purchasing and leasing farmland, as we mentioned before. Thus, your focus would be on owning REITs that buy high-quality land and lease to capable farmers. On the other hand, debt REITs will loan money directly to farmers, usually to expand an existing operation.

With debt REITs, you pay much more attention to the farmers that receive the loans. With equity, while the farmer is always important, the land becomes more relevant since you own it.

Agriculture REITs are still relatively new as an investment option, and they can be a fantastic hedge against inflation to make sure your money holds its value. Just make sure you look into the details to know where your money is going.

Are debt or equity agriculture REITs more appealing to you? Why?

Free Now!

When you’re buying a new house for yourself—or even considering an investment property—you should know all the tips for saving time and money … and making money when you transact. All revealed now in this FREE report, Knowing How Much You Can Afford for a House and Other Tips for Profitable Real Estate Investing.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Enter Your Log In Credentials

This setting should only be used on your home or work computer.

Need Assistance?

Call Financial Freedom Federation Customer Service at
(800) 777-2658

Send this to a friend