Investing in hemp real estate has become a phenomenal way for entrepreneurs to build wealth. A 2020 survey finds that about 33 percent of Americans have used CBD. They cite stress, anxiety, pain, and inflammation as reasons they take CBD supplements, lotions, and other products.
CBD’s growing popularity, however, does not ensure success in the industry. Follow these 8 golden tips for investing in hemp real estate to make smart choices and maximize your ROI.
Know How Much an Acre of Hemp Is Worth
How much an acre of hemp is worth depends on several factors. An acre that already has an irrigation system probably has a higher value than one that relies on rain for watering crops. Access to a major highway can also affect how much an acre of hemp is worth. After all, it takes time and money to move plants from the farm to the production facility. The shorter the distance, the more you can make from your crop.
Other qualities that can affect land value include:
- Soil acidity.
- How previous owners used the land.
- Whether you already have a permit to farm hemp on the land.
- Existing infrastructure for water, electricity, and other utilities.
If you have questions about the value of farmland, it never hurts to ask a professional appraiser to look at the property and give you an estimate.
Compare Regional Prices to Get a Good Deal on Hemp Real Estate
How much does an acre of land typically cost in the area? Reviewing regional land prices can help you determine whether you’re getting a good deal on your hemp real estate investment.
Work With an Experience Hemp Real Estate Agent
Even if you’ve purchased agricultural land before, you might not know how to find the best hemp real estate for your investment dollars. Growing hemp isn’t the same as growing other crops, largely because you have to deal with state and federal regulations that can affect how you operate and how much money you earn.
Working with an experienced hemp real estate agent helps ensure that you make informed decisions that lead to higher returns.
Identify all of the Ways You Can Make Money From Hemp
Obviously, you can use your hemp real estate investment to enter the CBD market. Before you decide to purchase or lease property, though, you should identify as many ways as possible to make money from hemp.
For example, you can sell your hemp to a company that makes CBD products. You can also purchase extraction equipment to start making your own CBD products. Is that an additional investment you’re willing to make? And will it lead to increased profits?
Other ways hemp real estate owners can make money include:
- Leasing land to farmers who want to take advantage of your hemp growing permit.
- Carefully trim flowers from the hemp plants to sell as CBD buds.
- Extracting CBD and other chemical compounds from hemp leaves.
- Selling stalks and other plant materials to companies that make products like cloth and paper.
Hemp isn’t just about CBD production. Use the whole plant to maximize your returns. Can you build a house out of hemp? Believe it or not, some companies use hemp fibers to make a material called “hempcrete.” It’s considered an eco-friendly way to construct houses and other buildings.
Estimate the Overall Cost of Ownership
It’s pretty easy to determine how much hemp real estate will cost to buy. You just negotiate a price with the current owner and add any applicable taxes and fees.
That doesn’t give you the total cost of ownership, though. Consider that you will probably have to:
- Pay annual property taxes.
- Add to the existing infrastructure.
- Amend the soil to improve crop yield.
- Renew your hemp growing permit.
- Pay utility bills.
- Hire employees.
- Purchase seeds, equipment, and other essentials.
Determining the total cost is an ordeal, but you can make the process easier by hiring a business consultant who has been through the steps many times before.
Get Crop Insurance to Protect Yourself From Losses
Imagine that one day you look out over your acres of profitable hemp, growing easily in the sun after a gentle rain. The next morning, you wake up to learn that a terrible storm has destroyed area crops. Unfortunately, your farm got hit hard. You lost at least half of your hemp crop.
That’s a sad moment for anyone. All of that hard work gone to waste! You will feel much less upset, though, if you have crop insurance that protects you from financial losses.
Most farmers have crop insurance. Unfortunately, the government makes it a little harder for hemp and cannabis farmers—even though Congress legalized hemp in the Farm Bill. Private crop insurance providers have policies that can protect your hemp real estate investment.
Compare Funding Options to Lower Costs
It’s not always easy to get funding for 420 investment opportunities. You can find funding offers through 420 properties, though.
Always compare your funding options to make sure you spend as little as possible. Few people have enough money to purchase large plots of land without help. That doesn’t mean your loan’s percentage rate should eliminate your profits!
Explore loans and other funding opportunities so you can purchase hemp real estate that will grow healthy crops and earn you significant returns on your investment.
Consider the Benefits of Selling Your Hemp Real Estate Investment
What is an acre of hemp worth? They might have paid significantly less when you bought hemp real estate a few years ago. Today, you could potentially double or triple your money by putting your land up for sale.
Contact us today to get your hemp property listed and attract serious buyers willing to pay for the true value of your land.