6 Mistakes to Avoid when Investing in Farmland in India

Buying a part of nature, a farmland, is exciting, rewarding and satisfying. But can the excitement alone justify purchasing a massive asset? If the thought is enough to buy farmland? No, it needs proper research, a huge amount of background checks , legal formalities  and paperwork. And there are few other aspects which need to be gauzed before the investment, afterall it's an investment that will yield returns for generations to come, if taken care properly. And if you are also to buy farmland, then here are top 5 mistakes that need to be avoided and to be taken care of before buying farmland.

1. Neglecting the significance of undisputed land titles:

A farmland's title must be verified before purchasing, which is a fundamental compliance. Legal issues would arise if the clear and marketable title to the land wasn't verified. The dispute on the title and area of land would not only lead to delay of acquisition but will also take a lot of mental toll on your health, as there are cases which involve land disputes for more than 50 years. And you surely want to acquire your land in this lifetime. And title verification should date back to a minimum of 40 years from the date of purchase. Detailed examination of mother deed documents is another step in the title verification process. Few other documents which needs to be verified before hand are:

Encumbrance Certificate

RTC – Record of Rights or Pahani

Mutation Extract

Family Tree History

Patta Book

Survey Documents include – survey sketch, Akarband extract, Hissa Tippani book extract, Tippani, Phodi extract, Hudbust Register extract, atlas, and village map.

Conveyance Deeds

Khata Certificate

Grant Certificates 

Note: The above list is not exhaustive and the land may need few other verification documents. Please see a legal team for better understanding.

2. Presuming a state’s law holds good for all the other states

Just a way agricultural produce is different in different states, the agricultural and thus farmland law are different for different states. For example, Earlier, prior to recent modifications, those without an agricultural background were not permitted to own agricultural land in Karnataka. Hence just developing a thought of purchasing farmland won’t suffice. Know the land laws of the state. Also you must know the ceiling limit of the number of lands that can be purchased by an individual.

3. Failure to conduct a proper land survey

Just checking land details and boundaries are not sufficient criteria to purchase a land. A detailed physical land survey is efficient to check suitability of land for agriculture or even pursuing gardening. You should therefore examine the soil's state and quality. Typically, good land for farming and harvesting can be defined as having soil that is well-drained, rich in minerals, and organic. Also, this helps to gauze the connectivity of the land via road and mobile. Thus, one should never skimp on this step when considering purchasing farmland.

4. Failure to know the seller

Examining the earliest document that was ever kept should always be the first step in tracing ownership. Also, learning about the history of the landowners would reveal information about the history of the land use itself. After all a buyer should know whom he/she is buying from as this may help to resolve any land dispute in future. 

5. Failure to set a proper objective

For many, purchasing agricultural land is just a way to get closer to nature and experience farm life. But you agricultural enthusiasts must remember that they still are investing in a property and not setting a goal may lead to disappointments if you don't reach your expected returns. So, a question must not be neglected and that is: What's the goal you want to achieve when buying a Farmland? Whether you want to keep land for investment purposes Or you are looking for a holiday home/retirement home for some leisure and recreational activities Or you want to pursue farming as a hobby, or a second occupation or retirement profession. 

And this goal setting highly depends on the ROI you are expecting. A hobby or a retirement profession can never yield good ROI. But a thoughtful investment in Agro forestry can generate good long term ROI. 

6. Not exploring FarmlandBazaar.com 

Last but not the least, exploring India’s First and only one-of-a-kind online marketplace to know the best properties around your region at best price can surely not be ignored. Farmland Bazaar not only filters the best properties around you but will also help you to compare them in one place without much hassle. Farmland Bazaar provides you with competitive pricing to compare and decide on the properties, amenities and locations.