🚜 Farmland Investing 👉 Why the world's wealthiest are investing in land

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Today’s Snapshot:

• Who is investing in farmland?

• Why is it such a popular investment for the wealthy?

• How can you buy your own farmland?

Farmland Investing

What do Bill Gates and the Mormon church have in common?

In 2020, the pandemic created chaos in our lives and in the markets. The market disruption brought inflation and volatility and left investors seeking stability in alternative assets.

Since 2020, inflation has risen 17%!

Supply chains were disrupted globally and caused additional volatility in the markets.

So where have the world’s wealthiest investors been putting their money?

In 2021, it was discovered that the Mormon church outbid Bill Gates on 33,000 acres of Washington farmland with a $209M winning bid.

A closer look into the portfolios of one of the world’s wealthiest men and the religious organization shows that these were not one-off investments.

• Bill Gates has amassed about 270,000 acres of farmland over the past 10 years, making him the largest private owner of farmland in the US.

• The Mormon church and affiliated entities reportedly own more than 1.7M acres of land, making the church the 5th largest landowner in the US.

And they aren’t the only ones gobbling up farmland.

• Stewart and Lynda Resnick, billionaire owners of Wonderful Company (POM, Fiji water), own 192,000 acres of farmland.

• Ted Turner, the founder of CNN and one of the largest landowners in the US, also owns around 200,000 acres in farmland.

Why farmland?

Farmland is a scarce commodity. As the old saying goes, “Buy land, they don’t make it anymore”!

With an average 11.5% annual return since 1991, farmland has even outperformed the major stock market indexes.

Farmland has also shown to be an effective inflation hedge over time.

It’s not hard to see why. Farmland produces crops and commodities that will rise in price and earn higher yields during inflationary times.

While the world’s population is growing at more than 67 million people per year, more people need to be fed, but the world’s farmland supply is shrinking!

Simple economics shows us that this agricultural land will become more valuable as the demand grows and supply shrinks.

How can you invest?

There are three main ways to invest in farmland.

1. Buy your own farm

   This is the most active form of ownership and probably not the right investment for most, unless you have the capital and operational expertise.

2. Invest in a REIT

   REITs (Real Estate Investment Trust) provide an easy way to get exposure to farmland in the public markets. Different REITs may have different focuses and business models, so it is important to do your due diligence.

   Gladstone Land (LAND) and Farmland Partners (FPI) are two examples of farmland REITs. Gladstone Land focuses on row crops, like fresh produce. Farmland Partners largely focuses on commodities, such as rice, corn, and wheat.

3. Crowdfunding

   Crowdfunding platforms let you pick your investments and invest smaller amounts to own fractional shares. These farms are also selected by investment managers and professionally managed.

   Here are two of the top farmland crowdfunding platforms available:

   AcreTrader has 44,900 acres and $330M in equity.

   FarmTogether has 4200 acres and $175M+ in assets under management.

   While REITs only allow you to invest in the overall company and model, crowdfunding platforms allow you to select individual farms like this:

That’s all for today.

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