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FarmTogether Review 2023: Best Farmland Investment Platform?
AcreTrader Review 2023: Best Farmland Investment?
In this article, we'll be comparing two popular farmland investing platforms; FarmTogether vs AcreTrader.
AcreTrader and FarmTogether are two online platforms that enable accredited investors to invest in farmland.
While they share some similarities, they also have some differences.
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|$8,000+||View Investments||Yes||US Farmland, Timberland, Vineyards|
|$5,000+||View Investments||Yes||Commercial Real Estate Properties|
|$15,000+||View Investments||Yes||US Farmland|
|$10||View Investments||No||Private Real Estate Deals|
- Both platforms are open only to accredited investors, which means investors must have an annual income of at least $200,000 ($300,000 for joint investors) for the last two years or a minimum of $1 million in liquid net worth.
- Both platforms offer investment opportunities in farmland across row and permanent crop types.
- Investors on both platforms can earn income from rental payments, farming operations and land appreciation.
- Both platforms allow investors to invest through a taxable account or a self-directed IRA.
- Both platforms withhold an annual servicing fee from investment distributions.
- AcreTrader is focused on individual crowdfunded farmland and timberland offerings, while FarmTogether offers crowdfunded offerings, as well as individual bespoke offerings and their diversified Sustainable Farmland Fund.
- FarmTogether offers bespoke sole ownership investments including 1031 Exchange services, while AcreTrader does not.
- While both FarmTogether and AcreTrader's crowdfunded deals require specific holding periods (5-12 years), FarmTogether additionally offers more flexible investment holds through its Fund and bespoke deals.
- While AcreTrader’s minimum investments vary by deal ($25k+), FarmTogether requires a low minimum investment of $15,000 for its crowdfunded offerings.
- AcreTrader offers only one investment distribution per year, while FarmTogether offers more frequent distributions.
- AcreTrader offers investments in the United States and Australia, while FarmTogether offers investments in the United States only.
What Is FarmTogether?
FarmTogether is a farmland investment manager providing accredited and institutional investors unparalleled access to institutional-quality farmland offerings in prime growing regions across the US. Their all-in-one platform facilitates access to this asset class through a variety of products, including crowdfunded farmland offerings, 1031 exchanges, sole ownership bespoke offerings, and the Sustainable Farmland Fund.
The company was founded in 2017 and has since raised over $14 million in venture capital funding.
The FarmTogether management team and partners are cross-industry professionals with extensive experience in farmland investing, investment management, agriculture, and ag-tech demonstrated by $1.2B+ of collective deployed capital. Their firm leverages technology and data science to identify a variety of deals and crop types, from almonds and apples to corn and citrus, to fit a broad spectrum of risk/reward appetites.
FarmTogether generates returns through two forms: capital appreciation and income.
- Capital appreciation is generated if a property is sold for more than it was bought for.
- Income is generated through rental payments via lease agreements (row crops) or direct management contracts (permanent crops), as well as the revenue generated by farming operations.
The team targets opportunities that typically yield between 6-13% returns with 2-9% cash yields – all net of fees.
How Does FarmTogether Work?
FarmTogether uses a proprietary sourcing technology and strategic partnerships to review a mix of on-market and off-market opportunities across the United States.
- Their process starts with a global macro view and then dives deep into the end markets for the farm products they target. They analyze supply, demand, consumer preferences, and more to arrive at a long-term view on price and valuation trends.
- Their team then conducts a property analysis incorporating over 150 data sets from public, private, and proprietary data sources.
- Finally, they apply proprietary technology and investment expertise to zero in on the best investment opportunities in their target geographies and crops.
FarmTogether requires a low minimum investment of $15,000 for their crowdfunded offerings. The amount an investor chooses to invest will determine how many acres of the property they will own, and returns are paid out proportionately to the percent of the project they own.
The minimum investment for their other products is $100,000 for their Sustainable Farmland Fund LP and $3,000,000 for their bespoke channel.
After creating an account, investors are able to browse carefully vetted farmland investments, review due diligence materials, and sign legal documents, seamlessly online.
Each listing on the FarmTogether platform includes information on the total equity of the deal, the target net IRR for the project, the target net cash yield, as well as a different target holding period so investors know what to expect.
Check out our full review of FarmTogether to learn more!
What Is AcreTrader?
AcreTrader is a crowdfunded investment platform that enables individuals to buy shares in farmland and potentially earn returns either through land appreciation or through rents received by farmers who use the land.
Minimum investments are often around $20,000, and holding periods for properties are usually five to 10 years.
AcreTrader selects less than 5% of the parcels they review, and selected parcels are placed into a separate legal entity that owns the land, which is what investors buy shares in.
AcreTrader handles all accounting, insurance, and works with farmers to ensure soil sustainability.
The platform charges a 0.75% annual management fee plus individual project closing costs, and investors must be accredited. The company was created in April 2018 and is located in Fayetteville, AR.
The founder and CEO is Carter Malloy, who grew up in a farming family and spent most of his career in financial services.
Investing in farmland is a unique way to diversify a portfolio, and AcreTrader is one of the few platforms that offer this type of investment opportunity. While dividends are generally paid annually, the timing and amounts are not guaranteed.
Overall, AcreTrader is a potential investment option for those interested in diversifying their portfolio and investing in farmland.
However, investors should carefully consider the risks and potential returns before investing, as with any investment opportunity.
You can read our full AcreTrader review for more info.
Final Thoughts: FarmTogether vs AcreTrader
For investors in search of a way to diversify some of their portfolio into farmland, platforms like AcreTrader and FarmTogether are changing the game.
Both platforms can provide investors with potential tax advantages through potential pass-through deductions and the opportunity to invest through a self-directed IRA.
Regardless of which platform you choose, the most important factor is when you start.
With a growing world population and a shrinking supply of farmland across the US, an investment in farmland has significant growth potential.
The best time to plant a tree was 20 years ago and the second-best time is today.
This is a sponsored promotion for the AcreTrader platform. Farmland Riches, LLC and it's members may have investments in companies represented on the AcreTrader platform. This informational post is by no means a promotion, solicitation, or recommendation of any specific investment.