Investors -- start your tractors

Farmland is a draw to diversify portfolios

As the price of vacant lots skyrockets in Florida, here is another real estate investing a farm. With farm management options that are available today, a farm investment doesn't have to be Green Acres.

Frederick Gillis, a 37-year-old money manager with A.G. Edwards & Sons in Boston, recently purchased 320 acres in western Nebraska to provide balance to his portfolio. An advantage to investing in farmland is the ability to generate returns while holding the property. Gillis estimated he made $16,000 with his first harvest of irrigated corn and dry land wheat, or a 6.5 percent return on his $246,000 investment.

Investing in farmland is not a new trend, but it is a steady business, with many people trying it after seeing listings on the Internet or advertisements in magazines and newspapers. More than 40 percent of U.S. farmland is owned by people who don't actually work the land, and that has been the case since at least 1988, according to the U.S. Department of Agriculture.

Farmers National Company of Omaha is one of the largest farm management companies in the country and can be of assistance in locating farm investment opportunities. Farmers National offers Florida grove and crop management services through a joint venture called Blue Goose Growers based in Ft. Pierce, FL.

Those selling their land have been getting good returns, too. Across the country, the value of land and buildings on farms has grown from an average of $599 an acre in 1987 to $1,360 an acre in 2004, a 52 percent increase when adjusting for inflation.

Investors find farms can bring high yields [Houston Chronicle]

Post a Comment