Finance Tools
Is Buying Farmland Worth It Calculator
Decide whether buying farmland makes financial sense by estimating annual net income, appreciation, total return, payback period, and comparing against an alternative investment return.
This tool estimates whether buying farmland is worth it by combining cash flow + appreciation and comparing against an alternative investment return.
Equity invested upfront (if using a loan).
After operating costs (rent profit or farm net).
Used to compare opportunity cost (e.g., index fund).
Verdict (vs alternative)
Maybe not (lags your alternative)
Total return (cash flow + appreciation)
$14,083
ROI on equity
14.08%
Annualized return (approx)
1.33%
Payback period
No payback (negative cash flow)
Alternative gain over 10 years
$79,085
Break-even appreciation to match alternative: 3.96%
How it works
- Total return = (annual cash flow after debt × years) + (future value − purchase price)
- ROI uses equity invested (down payment if loan, otherwise full price)
- Annualized return approximates a compounded rate over the holding period
- Break-even appreciation shows what land growth rate would match your alternative investment
FAQ
Is this a perfect farmland underwriting model?
No—real deals include transaction costs, rent growth, variable yields, taxes, and leverage nuances. This gives a fast decision-grade estimate.
Why compare against an alternative return?
Because “worth it” is relative—you’re choosing between this and another use of your equity.
How to use this is buying farmland worth it calculator
- Enter purchase price, down payment, and loan terms (optional).
- Estimate annual net income from rent or farming operations.
- Set expected annual land appreciation and holding period.
- Compare farmland total return vs an alternative investment return.
- Review ROI, annualized return, payback, and break-even appreciation.
Example
Example farmland worth-it estimate:
- Purchase price: $500,000, down payment: $100,000
- Annual net income: $25,000
- Appreciation: 3%/yr, holding period: 10 years
- Alt investment return: 6%/yr
- Result: farmland return vs alternative shown with payback + annualized return
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