Farmland
Buffett is known for his preference for productive assets over speculative ones.
In his 2011 letter to shareholders, Buffett elaborated on this investment focus. He wrote, “My own preference… investment in productive assets, whether businesses, farms, or real estate. Ideally, these assets should have the ability in inflationary times to deliver output that will retain its purchasing-power value while requiring a minimum of new capital investment.”
Buffett isn’t known for being an agricultural investor, but he sees value in farmland as a tangible asset.
At Berkshire’s 2022 shareholders meeting, Buffett said, “If you said, for a 1% interest in all the farmland in the United States, pay our group $25 billion, I’ll write you a check this afternoon.”
According to data from investing platform FarmTogether, U.S. farmland returned an average of nearly 11% per year between 1992 and 2023, surpassing U.S. stocks in performance and exhibiting less volatility.
The best part? You don’t need to have $25 billion to invest in U.S. farmland. And you don’t need to know how to operate a farm either. FarmTogether allows accredited investors to invest in U.S. farmland by taking a stake in the farm of your choice.
You’ll earn cash income from the leasing fees and crop sales — and any long-term appreciation on top of that.
Real estate
Real estate is another productive asset Buffett has highlighted, and for good reason: it generates rental income.
“[If] you offer me 1% of all the apartment houses in the country and you want another $25 billion, I’ll write you a check. It’s very simple,” the legendary investor said in 2022.
Whether the economy is booming or in a recession, people need a place to live. And with real estate prices rising to unaffordable levels in many parts of the country, renting has become the only option for many people.
Real estate is also a well-known hedge against inflation. As the price of raw materials and labor increases, new properties are more expensive to build, driving up the price of existing real estate.
Of course, that also means properties can be costly, especially with elevated mortgage rates. But these days, you don’t need to buy a house to start investing in real estate thanks to online platforms like Arrived.
Arrived is an online platform where you can invest in shares of rental homes and vacation rentals without taking on the responsibilities of property management.
To get started, you can browse through a curated selection of homes, vetted for their appreciation and income potential and choose the number of shares you want to buy.
Backed by world class investors like Jeff Bezos, Arrived makes it easy for rental properties to fit into your investment strategy regardless of your status as an investor.
For accredited investors who feel a tad more ambitious, there’s also First National Realty Partners, a platform that enables accredited investors to invest in institutional-quality, grocery-anchored commercial real estate.
With a focus on essential needs-anchored properties, First National Realty Partners invests in stable assets that can provide long-term, predictable cash flow. Boasting an expanding portfolio of top brands, the platform works with national tenants such as CVS, Kroger, Walmart and Whole Foods.
