Farmland Loan InvestmentsThe recent move by the Federal Reserve to increase interest rates on agricultural loans is an unwelcome development. Experts say that lenders are likely to require more valuable assets as collateral when extending credit.

While many AG land interest rates are still highly competitive without unreasonable requirements, Farm Mortgage Loan noted that the chilling effect of the prospect of future hikes should compel you to maximize the value of your farmland.

For starters, here are the most effective ways to make the most of your agricultural land:

Bank on Appreciation

If you’re looking to buy farmland, choose a relative location undergoing renovation. Any savvy investor would tell you to make the purchase while development projects are still on the horizon. This way, you can buy the land for less and grow your wealth passively with appreciation as the local population grows. In the future, you might be able to resell it top dollar if you wish.

Be Open to Renters

Consider renting out portions of your farmland to advertising or telecommunications companies to turn a profit on top of your regular revenue from farming. Make sure to still keep your crops and livestock in mind, though. Check if such installations wouldn’t affect your bread and butter.

Invest in Improvements

Retire your old agricultural assets to take your farming efficiency and production to new heights. Aging machines increase your timeliness costs and require more time and money to maintain. New technology adoption helps keep downtime to a minimum and boost your capacity.

Diversify Crop Production

Growing new kinds of crops is a good way to expand into other markets and build new revenue streams. Diversifying your produce is one thing, but choosing which crops to grow is another. It’s best to understand the demographics of different communities and know your potential local competitors. Filling a niche with strong demand is a recipe for success.

Maximize every square foot of your farmland to increase its inherent value. In turn, you might be able to use it as leverage to negotiable for favorable deals when you decide to take out a loan.