Tuesday, April 10, 2012

How Can a Retail Investor Invest in Farmland?

One of the things we hear constantly about farmland is some variant of "its a great idea, I know lots of big institutional investors are going into the asset class, but how can I as as an individual make an investment in farmland?"  There is the perception that one needs to make a huge investment and actually own a farm, hire out a farm manager etc.  The good thing though is that it is now possible for individual investors to make investing in farmland a part of their portfolio.   The method for this is to pool a number of individual investors' capital together to purchase a large parcel of land, and then divide it into individual parcels to offer to investors. Farmland investments for individuals generally pay a regular yearly dividend from the sale of crops, and also provide the opportunity for long-term capital gains as farmland continues to increase in value.  Of course, an alternative investment like farmland should only constitute a small percentage of an overall portfolio, but the option is now absolutely possible. Below is a summary of GreenWorld's farmland investments for individuals: