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Can Farmland Actually Pay For Itself Over Time?

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Owning farmland is a dream for many.

However, this is unlikely to become a reality for most, and that is because of the economics associated with borrowing money to buy land. 

If you're looking to own arable land that pays for itself over time, this is much easier said than done. Most family operated farms are leveraging land that has been passed down from generation to generation.

Simply put, the family owns it, and there is no loan payment. As soon as you take out a loan to borrow money for land, you increase the monthly cost for operating your farm.

Family farmers are operating on slim margins to begin with.

While it is possible to be 100% self sustaining on a piece of land, it's difficult – but not impossible – to buy land and have the yield from it pay for the land itself over time.

As soon as you borrow money to buy farmland, in most cases, the ability that land has to generate a positive cash flow disappears

That being said, here are the key factors that impact income generated from farming.

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PlatformMinimumLinkAccredited OnlyInvestments
AcreTrader farmland investing platform$8,000+View InvestmentsYesUS Farmland, Timberland, Vineyards

Farmland Investing 101

Farmland has provided investors with consistent returns for decades, but gaining exposure to this alternative asset has been a challenge in the past.

Today, you can invest passively in farmland through crowdfunded real estate platforms like AcreTrader.

AcreTrader Investment

Instead of buying a farm yourself, investors pool their money together. And instead of managing the farmland yourself, AcreTrader takes care of that. They handle everything from the paperwork to finding a suitable farmland renter.

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To date, the team over at AcreTrader has funded 149 properties, totaling over $365 Million in equity raised. This has been invested into over 50,000 acres of farmland.

Looking to learn more? Here's our full review of AcreTrader.

This is a sponsored promotion for the AcreTrader platform. Farmland Riches, LLC and it's members may have investments in companies represented on the AcreTrader platform. This informational post is by no means a promotion, solicitation, or recommendation of any specific investment.

Generating Income from Farmland

Farmland has the potential to generate income through various agricultural activities.

1. Crop Production

One of the primary ways farmland can generate income is through crop production. Farmers cultivate and harvest crops, which can be sold in the market for profit.

The income generated from the sale of crops, such as corn, wheat, soybeans, or vegetables, can contribute to covering the expenses associated with farming operations.

2. Livestock Rearing

Farmland can also support livestock rearing, which presents another avenue for generating income.

Farmers raise animals like cattle, sheep, pigs, or poultry for meat, milk, eggs, and other animal-derived products.

The sale of livestock or their products can provide a source of revenue to offset the costs of maintaining the animals and their infrastructure.

3. Leasing and Renting

In some cases, farmland owners may choose to lease or rent out their land to other farmers.

By entering into agreements with other agricultural operators, landowners can receive rental payments in exchange for the use of their land.

This allows farmland to generate income even if the owner does not directly engage in farming activities.

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Each parcel is divided into shares, and investors can purchase shares to earn cash distributions as well as benefit from the land value appreciation.

Farmland Riches is affiliated with AcreTrader, and we may earn a commission when you sign up for AcreTrader.

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