These days, the young generation is looking for creative ways to generate returns on their investment. While investing in the stock market is one way of making money, real estate investing is also a lucrative option. It gives investors a chance to increase their net-worth quickly compared to other investment avenues. Traditionally, people would only invest in residential or commercial property. A new trend that has caught the real estate market by storm is farmland investment. Entrepreneurs, seasoned investors and non-resident Indians (NRIs) are unlocking the potential of agricultural and farmland investment in India. With the rise in organic farming and sustainable agriculture, investing in agricultural land is the safest bet for those who want to make the most out of their money.
The returns come in two ways – farmland value appreciation, and crop yields or rental income.
Different Types of Farmland Investment in Hyderabad
4 Ways to get Started
As a real estate investor, if you’re looking to invest in farmland, there are multiple ways of foraying into it. The route you take is completely your choice and it totally depends on your situation:
Owning land directly
The most obvious way is buying farmland directly and managing it. Just like you would buy any other residential or commercial property, you can buy farmland outright, and use it the way you want to. You can even rent the agricultural land to a farmer who can use it to grow crops or rear their livestock. There are many farmlands for sale in Hyderabad. By doing so, you can also earn some passive income in the form of rent.
Farmland REITS
The second way of investing in farmland is via RIETs. Contrary to popular belief, Real Estate Investment Trusts (RIETs) aren’t just for office buildings and residential apartments. This route is perfect for real estate investors who want to invest in farmland without going through the hassle of managing it. Other benefits include enhanced liquidity and diversification.
Agricultural stocks
Another way of investing in farmland is investing in agricultural stocks. As the name suggests, this works similar to the stock market. Companies usually have a pool of funds and you can choose to buy shares in different companies of the agricultural industry.
Crowdfunding platforms
There are times when you want to invest in farmland but lack the necessary capital. You can go through farmland crowdfunding platforms. There are various marketplaces that buy shares of farmland. This allows an investor to buy even a small portion of a real farm thereby lowering the minimum investment.
Factors to Consider before Investing in Farmland
Now that you’re aware of the different ways through which you can invest in agricultural land for sale, let us look at a few factors you must consider to ensure it meets your objectives.
When you’re buying land directly, you need to evaluate if the land is investable and will be able to yield a sizable long-term return. Here are a few factors you must consider:
Soil quality:
When you’re buying farmland, you probably have an idea of what kind of farming you want to do. There are certain crops that thrive in specific soil conditions. Take a good look at the soil and see if it meets your farming needs.
Location:
If you’re at investments with good returns, the location of the farmland plays a significant role. If the farm for sale in Hyderabad is located in an area that boasts of rich soil, ample water supply and is close to the local markets, you can be assured of your returns. Other factors to consider are the climate and local agricultural laws.
Water rights:
When you own farmland, you need 24/7, ample water supply. Check if your farmers will have access to water and also be sure of the water rights related to the property, if any.
Tax and legal aspects:
Buying any form of land involves tax implications and legal aspects. When you’re new to agricultural investments, it’s always better to seek legal guidance who can help you along the way and also assist you with estate planning and land acquisition agreements.
Risk management:
Farmland can be at the risk of crop failures or natural disasters. Thus, in order to protect your investment in the future, think about all the available risk management solutions including insurance.
Unlock the Potential of Farmland Investment in Hyderabad
Whether you’re a new investor or a seasoned investor who has always dreamt of owning a farm plot in Hyderabad, Hillock has you covered. With over 150+ acres of open and opulent farm plots, real estate investors can invest in a sustainable lifestyle. The expansive farm plots are nestled in the foothills of the Ananthagiri Hills. For more information, send an email to info@hillock.com.
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