Investing in farmland REITs can offer a number of advantages, including:
Diversification
Farmland REITs can diversify portfolios, providing uncorrelated returns and a hedge against inflation.
Attractive returns
Farmland REITs can offer accessible exposure to attractive returns, combining rental income and appreciation.
Less volatile than stocks
REITs tend to be less volatile than other stocks, offering diversification from the stock market.
Tax benefits
REITs don’t pay federal corporate income tax, shielding investors from “double taxation”.
Professional management
Property owners can contribute their agricultural land to a REIT’s operating partnership in exchange for OP units, which can later be converted into REIT shares.
However, farmland REITs also face risks, such as interest rate fluctuations, natural disasters, and challenges with farmer-tenants.
Some examples of farmland REITs include:
Farmland Partners
A publicly traded REIT that purchases, leases, and manages farmland in North America. Their stock trades on the New York Stock Exchange (NYSE) under the symbol: FPI.
Gladstone Land Corporation (LAND)
The world’s largest farmland REIT based on its total market value. They have acquired stakes in more than 150 farms spread across 14 different states.
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