Farmland investing is a great way to diversify your portfolio, with the potential for long-term appreciation.
There are a few different ways to find farmland investments. You can buy shares of a farmland REIT, which is a real estate investment trust that owns farmland properties. REITs are a good option if you want to invest in farmland but don’t want to worry about the day-to-day operations of the farm.
You can also invest in farmland through a crowdfunding platform. These platforms allow you to invest in small parcels of farmland, often for as little as $100. This is a good option if you want to diversify your portfolio and don’t have a lot of money to invest.
Farmland investing is a good way to invest in a simple business model that will make money over time. The farmland investment can be used to produce crops or livestock. You can buy a share of farmland from a company that owns the land.
This is a good option if you don’t want to worry about the day-to-day operations of the farm.
Table of Contents
- Best Farmland Investing Platforms
- 1. AcreTrader
- 2. FarmTogether
- 3. Groundfloor
- 4. Farmland LP
- 5. FarmFundr
- 6. Stewardship
- 7. Landfund
- What is Farmland?
- Why invest in farmland?
- What drives farmland returns?
- Ways to Find Farmland Investment Opportunities
- Crowdfunding platforms
- Accredited vs Non-Accredited Investors
- How can non-accredited investors invest in farmland?
- Consider What Makes a Good Investment in Farms
- Buy land directly
- Choose Your Crop wisely
- What is a farmland investing platform?
- What are the benefits of farmland investment through a platform?
- Are there any risks associated with investing in farmland through a platform?
- What should I look for when choosing a farmland investing platform?
Best Farmland Investing Platforms
Let’s get into several options for you to find great farm investments to diversify your portfolio.
AcreTrader is a new farmland investment platform. The website was launched for a limited number of projects, enabling the crowdfunding platform users to combine their own funds to make bigger investments. Since launching these products, the company has seen considerable traction in the marketplace.
The company has seen considerable traction in the marketplace since launching these products. This is an important consideration for investors as it shows that there is interest in this type of investment. In addition, AcreTrader offers a variety of features that make it an attractive option for investors. These features include:
- Access to deals not available to the general public
- Direct investments in farmland with no middleman
- Flexible investment terms, starting from 6 months up to 3 years
- Ability to invest as little as $500
These features make AcreTrader an attractive option for investors. The company offers access to deals that are not available to the general public, as well as the ability to invest in farms without a middleman.
This allows investors to have a direct investment in the agricultural industry. In addition, the company offers flexible investment terms that allow investors to invest for a period of 6 months up to 3 years.
This flexibility makes it possible for investors to find an investment that meets their needs. Finally, AcreTrader allows investors to invest as little as $500. This makes it possible for people with all levels of investment to get involved in this type of investment.
Another popular farmland investing platform is FarmTogether. This crowdfunding site, like AcreTrader, is focused on agricultural land. You must be certified as an investor to use the platform. You’re buying shares in LLCs through a platform if you do so.
FarmTogether is a great platform to find farmland values and trends. The site also offers due diligence resources and a forum to connect with other investors.
Some of the most well-known features include:
- Acreage size: Minimum of 10 acres
- Types of investments: LLC shares
- Location: Open to all 50 states
- Investment minimum: $5,000
- Returns: Varies depending on location, quality, and other factors
You may also buy smaller bits of independent farming. You may diversify even further by investing in farms across the United States. It allows for geographical distinction, especially as a result of agricultural weather conditions. This is one of the most well-known farmland crowdfunding platforms out there.
Groundfloor is important farmland investing platform because it offers opportunities for smaller investors to get into the market.
Groundfloor allows you to invest in specific real estate projects, which gives you a lot of control over your investment. They also have a very low minimum investment requirement, which makes it accessible for a lot of people.
Groundfloor is more known for its real estate crowdfunding investments but from time to time offers farmland investments.
4. Farmland LP
Farmland LP is important to investors because it offers diversification. The company has a portfolio of properties in different states, which helps to minimize the risk that anyone state’s economy would have on the returns of the investment.
Additionally, Farmland LP invests in two different funds, which provides even more diversification. In addition to diversification, Farmland LP offers investors liquidity.
The company has a 1031 exchange program, which allows investors to sell their shares and reinvest the proceeds into other qualifying properties. This program is important because it allows investors to cash out of their investments without having to sell their property at a loss.
Another online property crowdfunding platform that specializes in farmland is FarmersFundr. FarmFundr, unlike AcreTrader and FarmTogether, manages the land you invest in.
FarmFundraising is an important investment platform for a number of reasons. Firstly, it offers investors a way to invest in farmland without having to manage the property themselves.
Secondly, it offers opportunities to invest in larger projects that yield higher returns. Finally, it provides a way for investors to diversify their investment portfolio by including farmland investments.
The two investment programs are available in two different versions: one with lower minimum investments of $10,000, the other for investors with balances above $500,000. This is compared to a significant investment that pays 6% per year but larger projects pay up to 2%.
Stewardship is important to investors because it offers a low minimum investment. This makes it easier for people to invest in farmland, which can often produce special crops.
Unlike other platforms, Steward does not require a large investment. It is also easier for customers to contact the company. In contrast to other crowdfunding sites, Steward does not invest in farmland equity. This makes it a safer investment for customers.
Landfund is a great option for people who want to invest in the farming section. The company has a low minimum investment, which makes it easier for people to invest.
In addition, the company offers a variety of services that can be helpful for investors. These services include due diligence, farm management, and consulting. This makes Landfund a great option for people who want to invest in farmland.
Consider the farmland investment opportunities offered by Landfund, which has an easy signup process and low minimum investment requirement.
See Related: How to Save Money and Go Green
What is Farmland?
Farmland can be defined as land that is used to produce crops or pasture livestock and includes some forested areas. Investing in farmland has shown to be an asset class that delivers steady returns over time, but it also comes with risks such as the fluctuating prices of agricultural commodities and weather conditions.
Farmland investments can provide stability and consistent returns for investors, and they can also be a way to diversify your portfolio.
Most other asset classes, like the stock market and bonds, can be volatile, but farmland tends to be much more stable. This is because the demand for food is always going to be there, no matter what the economic conditions are.
Why invest in farmland?
One of the reasons why I believe investment should occur is due to investing in agricultural real estate. Return. In comparison to conventional investments, farmlands have outperformed other asset classes by substantial margins, as shown in the graph above.
For more than 30 years, agricultural real estate has done extremely well in a variety of economic and financial situations. It won’t produce massive returns right now, but over time, it demonstrates the impact of farming land.
What drives farmland returns?
The three main factors that drive farmland financial returns are crop yields, commodity prices, and rents.
Yields are determined by a number of factors such as climate, soil quality, seed type, and farming practices.
Commodity prices are the second, and most important, factor. The costs that farmers receive for their goods are the first consideration. Rental rates are the second significant element; landlords may charge tenants whatever they want. When landowners sell property, they can earn capital gains as well.
Farmland also offers a hedge against inflation since the purchase price of farmland usually rises with inflation.
Consequently, it is reasonable to expect that the value of farmland will continue to increase in the future as it has done for many years.
While new technology has come to market – such as electric motors – some factors remain a concern such as water availability.
Farmland has appreciated in value faster than other types of real estate over the past few years, and that trend is likely to continue.
The reasons for this include increasing demand from investors and a finite supply of quality farmland.
Investors are looking for assets that offer stability and protection from inflation, and farmland meets those needs.
The amount of farmland available for sale is decreasing, and the cost of land is going up.
This means that investors need to be more proactive in order to find and purchase quality farmland.
Ways to Find Farmland Investment Opportunities
REITs and crowdfunding platforms are two methods investors can use to gain exposure to farmland.
Real Estate Investment Trusts (REITs) are a way for investors to own a piece of a property or farmland.
REITs own and operate properties, and as a result, they offer investors a way to invest in property without having to go through the hassle of buying and managing it themselves.
The main benefit of REITs is that they offer investors liquidity.
This means that investors can sell their shares in a REIT at any time, which is not always the case with real estate investments.
REITs also offer a way to invest in different types of property, such as office buildings, shopping malls, and even farmland.
Farmland REITs are a relatively new type of REIT, and as a result, there are not many available.
Another way to invest in farmland is through crowdfunding platforms.
These platforms allow investors to pool their money together and invest in a project or property.
Crowdfunding platforms have been growing in popularity, and there are now many different types available.
One of the benefits of crowdfunding platforms is that they offer investors access to deals that they may not be able to find elsewhere.
However, it is important to do your research before investing through a crowdfunding platform, as some are better than others.
Each option has its own advantages and disadvantages, so it’s important to weigh the pros and cons before making a decision.
Here are a few things to consider when choosing between a REIT and a crowdfunding platform:
- Cost: REITs typically have higher upfront costs than crowdfunding platforms. If you’re looking for a lower-cost option, crowdfunding may be the better choice.
- Liquidity: REITs are much more liquid than crowdfunding platforms. If you need to sell your investment quickly, a REIT may be a better option.
- Returns: Crowdfunding platforms typically offer higher returns than REITs. If you’re looking for a high return on your investment, crowdfunding may be the better choice.
Accredited vs Non-Accredited Investors
Some investors are having trouble becoming accredited, for a variety of reasons. The requirement of certain income levels to be considered for accreditation is the first stage. Only accredited investors can use certain platforms via private placements.
The Securities and Exchange Commission (SEC) is concerned about the ability of smaller investors to invest. A married individual making less than $150,000 can qualify as a net-income-producing investment investor.
How can non-accredited investors invest in farmland?
A farm-land reinsurance company. Finally, there is another option to obtain access to farmland by using real estate investment trusts. It’s basically as though the real estate trade is in stocks. However, there will be farm property.
Consider What Makes a Good Investment in Farms
Farmland investment is a decent asset class but only if you do your due diligence and consider all investment opportunities before you begin investing such as what is the farmland acreage, do you want to focus on equity deals only, and what type of farmland partners do you want to work with.
You will also want to consider the risks that come with farmland investments such as weather, pests, and commodity prices.
Buy land directly
It’s clear that you may purchase productive property and then lease it to farmers and ranchers. Because investors will most likely want a large piece of land, this method of investing in agriculture may be pricey.
In 2018, the typical agricultural land price was $4140, with pasture coming in at $1390. Investor-owned croplands are generally leased for $128 per hectare, whereas pasturelands are leased for $12 per hectare, resulting in a 3% return on investment and 0.9% return for investors investing in agricultural land.
In the Midwest, prices were considerably lower with an average of $2700 per acre for agricultural land, $1090 for pastureland, and $97/acre for crop ground.
The study also found that the rental rate for cropland was considerably higher in the Midwest at $179/acre, while pastureland was only leased for $11/acre, resulting in a 2% return on investment and 1.1% cashback for investors.
Choose Your Crop wisely
When it comes to investing in farmland, it’s important to choose your crop wisely. You want to make sure that you’re investing in a crop that will be profitable and that you have a good understanding of the risks involved. There are a number of different crops you can choose from, so do your research and make the best decision for your investment.
The average annual return for pistachios is 10%, while almonds have an average annual return of 12%.
What is a farmland investing platform?
A farmland investment platform is an online marketplace that allows investors to buy shares in farmland or even offer the opportunity of owning farmland outright. This can be a great way to gain direct access to a new asset class that traditionally was very hard to do on your own.
What are the benefits of farmland investment through a platform?
There are several benefits of investing in farmland through a platform. Firstly, the platforms offer investors access to a variety of properties across the country. Secondly, the platforms provide transparency and liquidity for investors. Finally, the platforms offer diversification for investors’ portfolios.
Are there any risks associated with investing in farmland through a platform?
Yes, there are some risks associated with investing in farmland through a platform. One risk is that the value of the farmland may decline. Another risk is that the platform may not be able to repay investors’ money.
What should I look for when choosing a farmland investing platform?
When choosing a farmland investment platform, you should look for one that has a wide selection of properties and offers transparency and liquidity to investors. You should also make sure that the platform is licensed and regulated by the appropriate authorities.
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