4 Reasons You Should Invest in Farmland

You might instantly consider investing in the stock market when making financial decisions for your future. While buying stocks and bonds might increase your wealth, many investors ignore another strategy.

Land for sale in SC is a valuable limited resource that appreciates with time. You diversify your financial holdings and increase your portfolio's reliable assets when you buy land in South Carolina. Check out these four arguments for buying farmland in South Carolina if you still need to convince yourself that it's a wise investment.

• Values of Farmland are Increasing

The University of South Carolina reports that land values are rising across the state, frequently faster than anticipated. Non-irrigated farmland increased by 2% to $5,555 per acre between 2019 and 2020. During this time, pastureland’s value increased, reaching 6% annually to $3,374 per acre. Before investing, spend your time investigating various sites because the value of farmland varies by location. You may opt to buy irrigated or non-irrigated crops, pastureland, forest, or recreational/hunting land, depending on how you intend to manage your investment.

• High Demand for Food

Due to the expanding global population, the amount of food we now produce will need to practically quadruple by 2050. Food can only be grown on 7% of the planet's territory, and most of that land is already in use. As food costs increase, so does the demand for land. Whether you choose to farm yourself, lease your property to another farmer or rancher, or sell the land later for a profit, the scarcity of land suitable for growing food improves the value of your investment.

• An Inflation Hedge is Farmland Investment

US annual inflation reached a 13-year high as of September this year. This indicates that you are paying more for the same goods and services compared to last year. In other words, the dollar now has less purchasing power. Gold, Treasury Inflation-Protected Securities, and real estate are the only investments that frequently keep pace with inflation. Farmland can act as a hedge against inflation and could assist in maintaining the value of your investments over time.

• Some Taxes are Exempt from Farmland

Agricultural land investors are eligible for various tax deductions and exemptions. In South Carolina, the land for lease in South Carolina is assessed at 12 percent of its market value, which is far lower than the 19 percent rate for residential property. Federal tax deductions for mortgage interest on the agricultural property might help you pay less yearly taxes. Suppose a working farm is located on your property. In that case, you are eligible for several South Carolina state tax exemptions, and your agricultural income is free from the federal government's wealth tax.

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