Review of the farmfolio farmland investing site

Farmfolio Review 2022: Best Farmland Investing Platform?

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  • Investment Options
  • Minimum Investment
  • Liquidity
  • Website Transparency
  • Operating History
3.7

Summary

With more and more investors looking towards hard assets like agriculture as a hedge against inflation and recessions, Farmfolio is a unique play in that they allow both accredited and non-accredited investors to directly purchase and own prime farmland in South America. 

Right now, their focus is on some of the top-producing lime farms in the country of Colombia, which thanks to its strategic shipping location and ideal climate conditions that allow for year-round growing, is quickly becoming a global leader in lime and coconut exports.

Their direct land ownership program is called LOTs (Land Ownership Titles). The farmland you buy is part of a larger farm, so for example, if you own 1 out of 100 shares of a farm you would earn 1/100th of the profits and pay 1/100th of the expenses. 

As a farm owner, you would be part of a Farm Owners Association (FOA) which is similar to how an HOA works. The FOA acts independently from Farmfolio on your behalf, and they have extensive experience in hiring and supporting a third-party farm management team who will manage each LOT and take care of every detail, including land development, planting, and harvesting.

In addition, the FOA takes care of one of the most important parts of farmland ownership, and that is the sale of crops. One of the most advantageous parts of the LOTs model is that when you buy a LOT, you immediately will be part of an FOA that has sale and distribution agreements with local packhouses, who will buy your crops at price points that deliver consistent passive income. These packhouses and their distribution network have established agreements with some of the world’s largest retailers including Walmart and Costco.

While ongoing income is a key benefit of owning farmland, owners will also benefit from the long-term appreciation of the land, as they directly own it.

Pros

  • Open to both accredited and non-accredited investors
  • The company uses a data-driven approach to identifying the best farmland available for purchase
  • The LOTs model enables individuals to directly own their share of an already operating farm
  • An onsite independent FOA handles everything, including hiring an onsite third-party management team that will handle things like land development, planting, and harvesting
  • Each FOA also has an established distribution agreement with a packhouse to sell the harvested fruit, which is ultimately sold to major retailers like Walmart and Costco
  • LOT owners benefit not just from generating passive income through the harvests, but also from long-term land appreciation 
  • Farmland has proven to be an effective hedge against inflation and recessions, as the rising global population means food demand is never-ending
  • Colombia is quickly becoming a major agricultural leader, and farmland opportunities are still advantageously priced compared to similar land in the United States, with the additional benefit of a lower labor cost and expense model

Cons

  • The minimum LOT purchase price can be high, over $30,000 in most cases
  • Owning shares of a single farm does not give you diversification

Investing in farmland has been growing in popularity for many years, although it is an investment that has been around for thousands of years. With almost no correlation to the performance of the stock market, long-term returns that are consistently higher than most traditional asset classes, and a proven hedge against inflation, many investors are considering adding farmland to their portfolios.

In the past, investing in farmland yourself usually meant purchasing a farm yourself. However, that can be incredibly time intensive and require a specific set of skills and knowledge. Not to mention, this doesn't provide any diversification across crops, regions etc. Another way to invest is through online farmland investment platforms.

One of these platforms is Farmfolio, offering investors access to some of the best farmland in South America.

Why Invest In Farmland?

There are so many reasons that investing in farmland is a solid choice for diversifying your portfolio.

Over time, farmland has proven itself to be a smart investment, faring far better than traditional real estate assets. Based on historical performance, farmland has on average delivered annual returns of 11.5%.

Farmland returns have been found to have low volatility when compared to other assets such as stocks. Simply put, farms are a tangible asset that tends to not gain or lose value with rollercoaster ups and downs frequently seen in the stock market.

Owning shares of farmland is a prime option for earning income. This could be from renting out the land or from your share of the annual crop harvesting and sales. Bill Gates and Warren Buffett are some of the largest farmland owners in the world, and the income-generating opportunities are one important reason why.

When you invest in farmland, you have the satisfaction of knowing that as an investor, you are helping preserve open spaces that might otherwise be slated for deforestation and land development. This is even more true when investing in Latin American countries like Colombia that are just now seeing the value of their farmland be appreciated by investors.

In particular with Colombia, the combination of the perfect growing climate and infrastructure investments like new highways and tunnels leading to its major ports that serve both the Pacific and Atlantic oceans make the country an incredible opportunity in the agriculture space.

Who Is Farmfolio?

Farmfolio Review

Founded in 2015, Farmfolio is an agriculture company that makes farmland ownership easy.

Their vertically integrated distribution network is one of the largest exporters from Colombia, a country known for rich soil, plentiful rain, and long growing seasons. They use an advanced data-driven approach to identify land with the highest quality trees, and then give accredited and non-accredited individuals the unprecedented opportunity to own one of the world's most rewarding asset classes.

However, none of the farm management responsibilities will fall on your shoulders. Farmfolio and an on-the-ground expert team manage everything including planting, harvesting, land and tree maintenance, and even selling your crops to local packhouses who have distribution networks that ultimately place the fruit for sale in major retailers like Walmart and Costco. They do all of the work while farmland owners sit back and enjoy the returns.

Farmfolio’s current focus is some of the top-producing lime farms in Colombia, and they have already sold out six farms with the seventh farm almost gone.

PlatformMinimumLinkAccredited OnlyInvestments
AcreTrader farmland investing platform$8,000+View InvestmentsYesUS Farmland, Timberland, Vineyards
FarmTogether farmland investing platform$15,000+View InvestmentsYesUS Farmland
farmfolio$30,000+View InvestmentsNoSouth American Farmland

How Does Farmfolio Work?

Farmfolio uses a data-driven approach to research and identify what they refer to as established “alpha farms” that are producing export-quality fruit, a designation that commands higher pricing. Then they negotiate with the current farm owners to buy their property and divide it into individual LOTs as mentioned above, and these LOTs are then offered to individuals for purchase and direct ownership.

Farmfolio and its network of experts manage each project from start to finish, including the selling and distribution process. It’s just one reason the company and its vertically integrated network have quickly become one of the largest exporters from Colombia.

The Farmfolio team believes the agricultural space, particularly in emerging markets, carries a huge amount of potential. Through the LOTs structure, they have made farmland ownership easy for investors looking for passive income and long-term land appreciation.

Click here to view current offerings on Farmfolio!

Farmfolio Investment Minimum

Each Farmfolio project carries its own per LOT price.

Currently, shares in a lime farm in Quindío, Colombia are being offered at $41,000 each.

On the higher end of the spectrum, shares in a coconut farm in Colombia carried a price tag of $65,000 per LOT.

Farmfolio Review: Conclusion

Wise investors should give serious thought to adding farmland to diversify their portfolio, and Farmfolio is one of the best options to do so.

They’ve done their homework and are focused on established and productive farms in areas known for perfect growing conditions. They’ve also identified key products with rising demand and potential future scarcity, crops such as limes and coconuts. They are continuously on the lookout for new ways to capitalize on the growing demand for the products cultivated on their farms.

The company’s innovative LOT system creates value and profits for LOT owners as they themselves and a network of partners identify, develop, manage, and provide ongoing oversight for every piece of land. Farmland owners do nothing except sit back and enjoy the returns, something farmland is uniquely poised to continue delivering in an environment with high inflation and slow economic growth.

Click here to view current offerings on Farmfolio!

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