Farmland Among Best Investments to Make During a Recession

By Shelley Swearingen – April 20, 2020

In uncertain times, people flock to stability. Our nation is currently battling a global pandemic, and all the economic ramifications incurred by such. Millions are seeking unemployment benefits and have seen their financial portfolios take a severe hit by the suffering economy. Due to the uncertainty of the stock market, many are seeking alternative ways to invest their money. Among the safest of investments is land.

Land is among the most stable of investments. People will always need a place to live, grow food, and create business. Land is a finite resource; we cannot simply ‘make more’.

“Farmland has historically been a great bet. For the past 47 years, US farmland has yielded returns of over 10%. This performance is even better when considering only the last two decades. From 1992 to 2016 farmland yielded an impressive 12% return vs. real estate (NCREIF) at 8.7%, and the Russell Stocks Index 3000 at 8.8%.” ¹

When buying farmland, it’s important to work with an educated and experienced broker. A vetted broker will:

evaluate crop yields and soil maps to help determine a fair market price, and
research the history of the land for significance, and
investigate any covenants, restrictions, or easements, and
help find tenants to farm your farmland.
get the benefits of farm and land management

While buying farmland and leasing land to farmers may seem like an affront to farmers, quite the opposite is true. Farmers often look to lease land rather than buy. The initial capital required to purchase land is quite large, and farmers can increase their operations much easier by renting the land. If farmland is leased and worked, it continues to keep nutrients in the ground. Thus, maintaining the value of the land. By working with a reputable broker, you can insure you purchase a plot that will give an added return upon your initial investment.

Land should also be considered when planning for your children’s futures. For all the reasons given above, this would be a wonderful way to prepare for your child to enter adulthood. Twenty years from now, a considerably smaller investment could prove very helpful in paying for your child’s education or first home.

Recession Investment Strategies

Diverse investment portfolios that withstand economic downturns and recessions include farmland real estate/ Compare the returns on investment (ROI) of farmland to the stock market and Dow Jones over time – land is a safe and stable investment opportunity year of year.

Whatever your goals may be, Geswein Farm & Land is here to listen. We take every client’s concerns and wishes into consideration when assisting in acquisition of new property. We have over forty years of experience in assisting with the sale of farmland, vacant land, ranches, and homesteads. To learn how we could best assist in your needs, call 765.427.1619 or email johnny@edgeswein.com.