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Farms are the production ground for most of the food we consume, whether they’re plant or animal-based. However, managing a farm and keeping it productive is tedious work. This difficulty discourages many people from getting involved in agriculture at the base level. But if they knew how to invest in farmland and earn passive income from it, they’d probably be eager to own a farm.

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The idea of reaping returns from investments in farmland is, more often than not, a smart one. Nigeria’s population is growing at a rate of 2.1% per annum. With more mouths to feed, food crops, meat, and dairy won’t be experiencing a decline in demand any time soon. If you are meticulous with your due diligence and invest wisely, you could garner an impressive ROI from farmland.

Why You Should Invest in Farmland

Here are some reasons you should consider investing in farmland, especially for passive income generation:

There’s a high and growing demand for the food items that farms produce
The value of farmland tends to increase over time, so the resale price will continue to climb
Farmland with perpetually increasing value is great for preserving your wealth against inflation
It’s one way to diversify your investment portfolio
Provide employment to people in rural communities

Steps to Investing in Farmland for Passive Income in Nigeria

The following are steps you can take to invest in farmland in Nigeria.

Hunt for a Decent Location

Nigeria has a lot of arable land, but not all of it is suitable for investments of this kind. If you would like to gain maximal return on your investments, you should be careful about selecting land that’s appropriate for your purposes. The basic things to look out for include closeness to markets, soil quality, climate, and access to water. Potential for value appreciation and the availability of willing farmhands are also important factors to bear in mind.

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Engage the Services of an Agent or Consultant

Unless you are well-versed in the business of acquiring farmland in your location, it’s a good idea to ask an agent or consultant for help. This person will ideally possess deep knowledge of the farm purchase and sale processes. They may know what kinds of farmlands are available and where, and which ones are most suitable for you. In addition to this, they could help you negotiate a fair deal.

Verify Land Titles

After identifying the farmland you wish to purchase, your next step would be to discuss things with its seller. There may be negotiations about pricing, miscellaneous fees, and the transfer of ownership. But one thing you shouldn’t approach casually is verifying the land titles presented by the seller. You must ascertain that they are complete, genuine, and relevant. Only go ahead with a purchase if you have confirmed these things. Note: Common land titles are the Certificate of Occupancy (C of O), Deed of Assignment, and Gazette.

Conduct a Land Search

Here’s one more thing you must do before deciding whether to buy the land or not. You must determine that the land in question is free from disputes or encumbrances. You should also confirm that the seller actually has the legal right to sell the land. Your legal representative or agent can land search can conduct your land search at your state’s land registry.

Do Further Due Diligence

Apart from investigating possible disputes or encumbrances, you will also want to check for things like unpaid taxes and verify leases or agreements. The aim of this is to avoid risks that may lurk beneath a lack of clarity. If information about anything seems missing or poorly conveyed, don’t hesitate to ask for clarification.

Wrap up the Purchase

The next step would be to negotiate and agree on terms. This is followed by your fulfillment of payment obligations and the full transfer of land ownership to you. Remember that you must register the land transfer with the government, usually at the land registry.

Look for Farmers

The whole point of earning “passively” from farmland is that you don’t do the hard work of planting, cultivation, weeding, pest control and harvesting yourself. You outsource these things to farmers who are willing to use your farm for a lease period. They could pay you rent, and may even share some of their produce with you. However, you will need to monitor activities at the farm, so you’re always in the know about what happens there.

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Final Words

This article has explained how to invest in farmland in Nigeria. It all starts with knowing what you want, and reviewing all options carefully. Also, only carry on with a journey towards acquiring land if its ownership isn’t in doubt or disputed. Finally, find trustworthy hands that will utilize your farmland and pay you to use it. This is what it all comes down to.

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This article was first published on 5th April 2025
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ikenna-nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.