How to Generate Profits Off Farmland
When deciding how to monetize an investment in farms for sale in Florida, there are a few different options, but first, it is best to determine your limitations and goals for the land. Do you have the capabilities to farm the land yourself? Are your objectives only to sell the land once it appreciates? Do you want to lease the land? Each option comes with its own unique set of opportunities for generating profits. So, before you invest, understand the various options, challenges, and opportunities that come along with a farmland purchase.
Farm the Land Yourself
Harvesting and selling crops, especially those in high demand, such as, organic fruits and vegetables, can be extremely profitable. Farmland, however, is not a self sustaining investment. It takes an understanding of the land, soil, livestock, and the market, along with an investment in farm workers and the proper equipment. Experience in farming is crucial to harvesting crops efficiently and profitably. Without the proper training, this option is best left to the professionals.
Lease the land
If you want to make a profit off the crops generated from your land, but don’t have the capabilities or desire to harvest the land yourself, a crop share lease agreement may be a good option. An experienced farmer will tend to the land, and the profits generated will benefit both parties. This not only makes up for a lack of experience, but also frees up your time to generate returns from other investments.
Another option is to create a standard lease agreement, where a farmer pays monthly or yearly to lease the land. This will grant you an annual income, but you run the risk of overgrazing if the tenant has cattle. So, it is important to make annual visits to ensure the farm and soil are being properly attended to.
Sell The Land
The final profit generating option, when buying Florida farms for sale, is selling the land immediately to turn a small profit and free up capital, or hold the investment over time and sell after the value has appreciated substantially. With the continued rise of crop prices, farmland is a very sound investment. Between 2012 and 2013 alone, there was a 13.0% increase in average farmland values nationwide.
Because a Florida farm for sale is a sound investment and has the ability to generate profits in a few different ways, consult a CBC Saunder Real Estate land professional to guide you in purchasing the right farmland for your goals.