wealthymatters

The Why’s And How’s Of Buying Agricultural Land

Here’s what John Malone, the founder and chairman of Liberty Media,who owns an estimated 2.2 million acres of U.S. cropland, ranch land and woodland and so is the largest landowner in America has to say about why he invests so heavily in agricultural land:

“Productive land is one of the very few permanent values throughout history.In the long view in real dollars,cropland is probably best, because it’s producing a commodity that is consumed by a world market.To me it looks like one of the safest places you can invest money is productive land.”

So does this make you wonder what sort of returns North American farmland generates?Here’s your answer:

Over the past decade North American  farmland has generated annualized returns of 13.9%.

So what questions does Malone ask before buying agricultural land?Here they are:

Does it make economic sense?

Does it bleed money or is it self-supporting and self-managing?

Do I have to get involved in day-to-day operations of the business, or does it have competent current management?

Does it represent economic diversification for myself and my family?

There’s no reason why this can’t be your check-list and mine too while buying agricultural land.