Rural property was the only investment that had a positive Return on Investment during 2008 in the UK according to a recent article from Farmers Weekly Interactive. These numbers compare rural property ROI to other types of investment properties.

Over the 28 years of the IPD Rural Property Investment Index, rural property has averaged a 12.7% ROI compared to commercial property’s 7.5%. Even though rural property ROI has dropped in the UK, it remains the only investment property yielding positive returns in this economy.

Jason Beedell, head of research at Smiths Gore, noted "(The index) proves how good rural property is as an investment class in a recession. Farmland performed well in the last recession in 1990-91, and it was the only property class which showed a positive return this year."

Is US farmland ROI similar to UK farmland ROI?

The short answer is that the US is not identical to the UK in regards to ROI for properties. Although, many US experts claim that US farmland hasn’t lost any value during this recession, and farmland values have been idle for a while and are now set to rise.

According to the Chicago Fed, the year-over-year increase of farmland values was 2% in the first quarter of 2009. Cash rents on the same land rose 7%, which still creates a positive ROI here in the US. Now compare US farmland’s 2% increase YoY in the first quarter of 2009 to the S&P 500’s 39% decrease, we see that the UK and the US are somewhat similar in this recession.

Farmland proves to be a great investment, especially during a recession. It yields a positive ROI when other investments struggle. Beedell sums it up well, "We see farmland values staying steady for the rest of this year and potentially strengthening by 4-6% a year in the medium term. Coupled with that, farmland is attractive to investors because it isn't exposed to the same influences as commercial and residential property sectors, so it can help to spread risk in a portfolio."