Should you Invest in Agricultural Property in BC?

Irrigation System Watering a Field in the Countryside of British Columbia on a Sunny Summer Day. Mountains are Visible in Background.

Thanks to its vast amount of farmland, Canada is one of the biggest agricultural exporters and producers on the globe. British Columbia alone has a growing market for around 200 agricultural products, making it an exciting time for those interested in getting into the agricultural sector.

While this is great for farmers and others employed in the industry, is this increasing demand worth it to someone simply wanting to invest in agricultural properties? Also, if you don’t have much experience or interest in agriculture, why would you want to put your money into this type of property over the more traditional investment options?

As it turns out, there are actually quite a few benefits to investing in agricultural properties such as farmland, regardless of your experience in the industry.

It Can Protect You from Losses

The world has gone through many periods of economic instability throughout the years, and it can often be hard to predict which investments may result in losses. More traditional assets like stocks and bonds may lose money due to inflation, but farmland actually tends to increase along with inflation. This makes it more stable than even other real estate investment options during times of economic uncertainty.

You Have Income Options

There are multiple ways that you can earn income from agricultural properties. If you’re thinking about working the land yourself, row crop farmland, for example, can net you about 4 – 8% returns in income. On the other hand, if you don’t want to work the land or are only planning on using a portion of it, you can always rent it out to farmers and sharecroppers, as some want to do the work but simply don’t have the budget to buy out acres of agricultural land on their own.

You can even rent the land out for non-agricultural purposes. Some people may be willing to pay for the space to hunt or put up a billboard, and energy companies may be interested in the land for windmills to harness wind power.

Capital Appreciation

The world’s population only seems to be growing, and the need to house and feed its people is growing right along with it. This makes investing in something like agricultural properties an especially wise choice. As available land declines and demand for agricultural commodities increases, your farmland will only continue to increase in value.

Is There Anything Else I Need to Know Before Investing in Agricultural Properties?

One of the most important things you need to know about investing in agricultural properties is that it is a long-term commitment. If you’re looking to maximize the return on your investment, be prepared to spend more time with your farmland than other types of properties. The farm economy tends to fluctuate over time, so you’re probably going to want to hold onto it for 5 – 10 years in order to fully realize its potential.

Agricultural real estate is also quite different than traditional real estate, so if you’re unfamiliar with the agricultural industry in BC, it’s a good idea to hire a real estate professional who knows their stuff. Call or email us today to talk about your options.