How farmland investment can reap high returns
A P R I L 8 2 0 2 3 | I S S U E 2
HOW
FARMLAND
INVESTMENT
CAN REAP
HIGH
RETURNS
WHY INVESTING IN
FARMLAND IS A
SMART CHOICE
FARM LAND INVESTMENT
GREEN IS THE NEW GOLD
WRITTEN BY PYAR MOHAMED
Investing in farmland can be a profitable alternative to traditional real estate investments in India. The demand for speciality crops such as avocados has been steadily increasing, making farmland investments particularly attractive. By partnering with recognized organizations like Kodai Agriorg Private Limited, investors can benefit from the growth potential of this thriving industry and contribute to sustainable agriculture practices.
BEYOND CONCRETE
JUNGLES
INFLATED AND EXPENSIVE
Residential plots in metro cities like Chennai, Mumbai and Bangalore can be quite expensive, with prices ranging from Rs. 50 lakhs to Rs. 1 crore or more, depending on the location and size of the plot. However, these plots may only appreciate at a rate of 4-6% annually, according to a report by Knight Frank, a global real estate consultancy firm.
In contrast, farmland in India has seen an annual growth rate of 12% over the past decade, according to the same report. For the same amount of investment that it would cost to buy a residential plot in a metro city, an investor can buy a much large plot of farmland in a rural area, and potentially see a much higher appreciation rate.
For example, an investor could buy a 1-acre plot of farmland in a rural area for approximately Rs. 30 – 50 lakhs, the same cost as a residential plot in a metro city.Over a 10-year period, assuming an annual growth rate of 12%, the farmland investment could potentially appreciate to Rs. 1.54 crore, whereas the residential plot may only appreciate to Rs. 81 lakhs.
Investing in farmland also offers unique tax benefits. In India, agriculture is classified as a primary activity, and investments in agriculture enjoy a variety of tax incentives. Additionally, farmland investments can be eligible for capital gains tax exemptions, making them an attractive option for investors seeking to maximize their returns while minimizing their tax liability.
