Farmland is a prudent investment for several economic reasons…limited supply of land in a world with a growing population of people who demand more food, inflation hedge, safe harbor and income appreciation from higher yields or rents. In addition, there are special situations that put the prudent investor in position to get greater returns or take less risk. Buying, managing and selling to capitalize on several special situations create unusual investment opportunity.
Development opportunity. Buy in the path of development.
Opportunities occasionally exist to buy development land at farmland prices. These investments justify themselves on rent income and have the imbedded advantage of a cheap or free call option on future development potential.
Underpriced quality. Some situations result from incorrect pricing based on a soil quality analysis. Some soil types occasionally sell at a 20 percent price discount to the same soil 30 miles away. Finding such underpriced opportunities creates immediate value.
Under managed land. Some opportunities exist on farmland that has a wet area needing tile. Farmer buyers shun such farms because they create costly planting and harvest delays. Buying a situation like this, investing in drainage tile, adding tillable acres frequently creates significant value.
Breakup opportunity. Some opportunities exist in 
markets where houses and buildings create a discount to the value. Buying the entire property and selling off the parcel with the buildings occasionally creates significant value.
Land creation opportunity. Farms with rocks, trees, driveway lanes and other obstacles can occasionally be dramatically improved with some land clearing techniques….burying rocks, burning trees and creating additional acres.
Cash now opportunity. Sellers with an urgent need for cash sometimes discount the value of their land by 10 to 20 percent. Buyers prepared to close a deal in 30 days occasionally are handsomely paid for their ability to act quickly. Buyers with this decision making capability get the first look at many deals, some of which get sold before the market hears about the deal.
Negotiated rent opportunity. Skillful negotiation of variable rate
risk share/profit share leases with financially strong tenants sometimes increases the rate of return by 25 to 35 percent. These negotiations are completed with producers who know how to use commodity futures markets and crop insurance to mitigate risk and maximize upside potential, then share these benefits with the knowledgeable owner.
Tired listing opportunity. If land is priced too high, local buyers reject the seller as not being serious. Buyers skilled at smoking out tired listings occasionally find discouraged and willing sellers nine months later. Investors advised by experienced, sophisticated buyers who know how to size up and negotiate these special situations put themselves in the best position to maximize their farmland investment dollars.