Farmland Investments Benefit Both Investors & Farmers
Investing in farmland is beneficial for investors and farmers, and Promised Land provides a unique opportunity to participate in a large-scale opportunity zone investments. John Heneghan, Promised Land Opportunity Zone Funds Manager, said Promised Land culminated as opportunity zone tax legislation can be applied to farmland.
“The idea behind the tax legislation is to encourage capital to flow to those low-income communities. So, incentivize folks to buy property, in this case farmland, in rural opportunity zones. The requirements are that you improve the property. So, we bring additional capital to improve the productive capacity of the farmland and economic activity to the communities that the farmland is a part of.”
He said it provides a win-win for farmers, their communities and investors.
"Investors get tax benefits to the extent they invest in property and OZ. And for farmers, we're looking for sophisticated farmers who want to expand acreage under management. Most of them know that they don't have to own every acre that they farm. They can partner with investment groups like Promised Land, We're going to hold the farms for ten years and we'll generally gladly have a right of first offer with our farmer tenants.”
Heneghan said Promised Land focuses on row crop farms.
“We've been focused on row crop, it's a lower risk profile. Farmland is a terrific asset to build wealth long term. It's a wealth preservation strategy and grow your wealth long term on any ten year hold, which is the required hold period for an OZ farmland fund.”
Owen Peele, a North Carolina farmer who partners with Promised Land, said they are devoted to ensuring the farms success.
“Farming is changing and then that change investment groups are just part of it. Promised Land is one of the first groups that I've worked with that they're interested enough that they want to add back to the farm, but also, they want to come visit, they want to come see what it is, is going on.”
Promised Land held a recent webinar for potential investors and Heneghan says farmers are a great partner for investors, as investors can enhance the productivity of the land.
“They can quickly identify high quality farmland that they'd like to farm in opportunity zones. Our farmer tenants understand that the big three improvements that we do, drainage tiling, irrigation equipment or grain bin storage, are all productivity enhancing to the farmer, so their profitability and cash flows will improve.”
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