Tuesday, December 5, 2023

Get The Scoop On Why Farmland Is a Good Investment For Black People

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Why Invest in Farmland?
By Gary L. Smith

Many African Americans have ties to farmland either through inheritance, or through some form of ancestral rights. Whenever the word “farmland” comes up most of us immediately envision images of dirt roads between fields of crops, with beautiful sunsets. But have you ever considered such an investment as a strategy for creating wealth?

You may be surprised to learn that investing in farmland may indeed offer the kind of stability and consistency you’ve been seeking. Farmland in the U.S. is highly fragmented, typically with family-owned farms passed down from generation to generation. These farms make up a large portion of the farmland market, and with these valuable assets controlled by multi-generational families, it’s exceptionally difficult to access (there’s that word again) the growth potential of farmland investing.

Access to information is the gap we have in understanding potential investment opportunities that are literally within our grasp. An investment in farmland is an effective strategy for hedging against inflation and volatile markets. In fact, farmland is known as a low volatility asset. With many assets as consumer prices rise with inflation, the value of the asset decreases. But with farmland, the value tends to rise right along with consumer prices.

As a non-correlated asset, farmland investors are not handcuffed to the uncertainty of the stock market. Regardless of the stability or instability of the current market, farmland can continue to produce income and rise in value. Since farmland has only become scarcer over the years, a trend that is likely to continue, capital appreciation will likely continue to grow as well.

The Holidays are rapidly approaching, so before you pass the turkey, and share gifts, share and pass this information along. This is a subject worth discussing if there is farmland in your family. Having said that, any potential investor should conduct their own due diligence first and seek out and consult with the most knowledgeable and experienced investment advisor you can get. For the best results, choose someone who specializes in farmland to gain the most from your investment (inheritance).

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There are many moving parts to investing in farmland and profiting from it, such as crop types and geographies that are key to providing long-term income and total return potential. From timber, to cotton and everything else in between. You will definitely need to get an updated assessment of value. Let me say this, before you saddle up and head down south for the next family reunion. There is a lot of development going on nationwide and, in my opinion, black farmers are being ignored or pushed out completely from profiting from their land.
Knowing exactly what your land is worth is crucial to not being duped, tricked or flat out ripped off of your property! Do not ignore this advice, you must know your worth. Actually, this bodes well for anything attached to you.

Right now, there is a demographic shift in farmland ownership due to aging farm families. Most U.S. farmland is owned by people who are age 65 and older. They own the largest amount of land. A turnover in ownership for a huge percentage of America’s farmland appears to be imminent, because our young people can’t see the forest for the trees (no pun intended here). They are missing out on opportunities and are basically giving away precious farmland, like how we gave away our party stores back in the day.
 
Money is literally growing on some trees for those who own timber land down south. However, the ownership turnover is potentially giving “other” investors the biggest opportunity to take the land and profit from our ignorance.

Consumer trends only make farmland more appealing for investors because consumers control the supply chain. Americans are dedicated to eating healthier more now than ever before. As an investor, providing people with safe, quality food is certainly something you can feel good about.
Potential investors should take time and choose the right partner for their investment goal and strategy. The right farmland advisor, and I do want to stress the right one will NOT advise you to sell! Selling anything of value that produces income will surely bring an end to that cash flow, leaving you with a huge capital gains tax bill and no cash flow for the future.

Remember, “they ain’t making any more land”. Hold on to it, it’s the only thing you can pass on to your children’s children for generations to come, possibly tax free!

About Gary Smith
The impact of Gary Smith's contributions has even transcended the written word, as he was featured on the prominent Fox2 News segment, specifically Murray Feldman’s “Money Monday” news cast. This appearance underscored Gary's authority in the field and served as a testament to his standing as a trusted source of insight.

With an illustrious career defined by unwavering dedication, groundbreaking accomplishments, and a commitment to create and preserve wealth through passive investments, Gary continues to be a beacon of inspiration for aspiring professionals and seasoned experts alike. He is the founder and CEO of Business Consultants International, Inc. (d/b/a, Black Swan Capital).

A private money lender that provides financing to real estate investors and entrepreneurs in need of capital to secure and sustain profitability in their real estate and business acquisition endeavors.  To order "5 Keys to Create Passive Income with Commercial Real Estate," Click here


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