Farmland investments can be traced back to many centuries ago when people invested in agriculture through land ownership. When in need of money, they later sold off the acquired land or borrowed money using the land as collateral. In the 19th century, Farmland investments expanded from land ownership to resources needed to exploit land.
Today, Farmland investments covers funding, resources, and also farmland yields. It has developed to be a profitable business suitable for a wide variety of investors including students. Farmland investment is simply investing in agriculture. It works by investing in activities needed to work the land for sustainable profits.
This article will share with you 7 farmland investments options a student can exploit to make money.
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Benefit of Farmland investments
- Farmland investment is a low-risk venture compared to other investments. You could choose to join a farmland fund which is usually less expensive compared to the cost of buying farmland and leasing out for farm operations.
- Individuals investing in farmland will help strengthen food security and increase economic growth as there will be enough funding to cultivate the millions of arable land laying dormant.
- Students who venture into farmland investment will be assured of income which will increase as returns grow.
Farmland Investments you can venture into as a student
Join an Agricultural REIT fund
Buying land can be capital intensive but joining a REIT fund will make the high expenses go away which is why I recommend it as a farmland investment option students can venture into.
Real Estate Investment Trusts (REIT) are companies that operate, own or finance income to generate real estate. Agricultural REITs work by purchasing farmlands and leasing them to farmers to work on. As an investor using REIT, you will be getting dividends for the farmland or farmlands you have bought a share(s) or stock(s) while REIT pools the capital you invested to buy the farmland and lease.
Joining an Agricultural REIT is one of the best farmland investment options that will give you a steady income without you being involved in the farmland operations. You can also sell your REIT shares on the stock exchange to get more money.
Invest in an agricultural Exchange-traded fund(ETF)
The agricultural ETFs work like a mutual fund by pulling assets from its shareholders and investing it by tracking an agricultural commodity or asset(farmlands). It offers options for diversification( individuals are not limited to one investment) and this is one of the reasons a student going into farmland investment should invest in it.
Agricultural ETFs stocks can be exchanged or sold on a stock exchange. However, before investing in any agricultural ETF you should consider their management fees and the general performance of the ETF in past and recent years also the index it tracks(commodity or asset or the entire sector).
Invest in Agriculture mutual funds
Here your farmland investment(capital or assets) will be invested in agriculture projects by expert money managers.
You will receive your capital gains or income for the funds you have invested after a considerable amount of time.
It is a good choice of farmland investment because an investor will not need to be active in the operation of its investment,(will only need to provide an investment) as everything ranging from bonds and securities to equities management will be done by professionals. Still, as a shareholder, you will also be participating in the gains and losses of the fund.
Direct investment on farmland commodities
As a student, you can also directly invest in farmland products and take advantage of its market pricing to get returns. This is a good alternative for farmland investment than actually acquiring a farm. You can look on to the help of agricultural ETFs, and ETNs and purchase a futures contract to give you more guidance on the type of farmland commodity to invest in.
Buy Agricultural stocks
You can buy agricultural stocks in a publicly traded company that operates in farmland investment and sell off later.
There are several public trade companies that either grow or produce crops and some that work in agroindustries that support farming. You would however have to look out for which suits your farmland investment amount, keyword searches can provide you with a variety of public trade companies you can buy shares from.
Fund crop production
Just like there are hundreds of agricultural REITs and ETFs, there are also a large number of firms that support farmland investments. Most of these firms grow, plant, harvest crops and also distribute farmland products(yields).
Funding these firms to help in their operations will give you profitable returns plus having profit is guaranteed as agriculture is considered recession-solid.
Invest in supporting industries
Farmland investment also covers investment in resources needed to work farmlands. You can invest your funds and buy shares in companies that support farming. Some sell farm inputs(fertilizers and seeds), manufacture farm equipment and also distribute crop products to locations they are needed.
Before investing in an agriculture supporting company the first thing you should consider is what type of farm operations they support, this will guide you in making a better farmland investment decision.
Final Thoughts on Farmland Investments you can Venture into as a Student
Agriculture is a relevant sector of every nation’s economy as it provides agricultural products necessary for man’s survival. There will be no agriculture without farmland. This implies that an investment in farmland has the highest likelihood of getting profitable returns.
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