FarmlandFinder Review 2023: Best Marketplace For Farmland?

In the last few years, investors have started to recognize farmland as a top investment opportunity. With consistent returns, low volatility, and strong future demand for food, farmland is predicted to continue rising in value.

However, unlike stocks and ETFs, farmland isn't an asset that is traded on the stock market (except for a few REITs). So, how do you add farmland to your portfolio?

In this article, we provide a complete FarmlandFinder review, a platform dedicated to farmland investing. So, let's dive in!

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What Is FarmlandFinder?

Think of FarmlandFinder as window shopping for farms to invest your money in.

The online platform pairs farmers with investors which benefits both parties. Located in Iowa, right in the heartland of the country, the properties are all located in the Midwest.

From Michigan to South Dakota, Kansas to Wisconsin, FarmlandFinder touts its Midwest land real estate facts. Total land for sale on FarmlandFinder is 4,182 acres, with an average listing price of $7,188.

According to the USDA state-by-state data, investment options are strong in the North Plains and Corn Belt regions, with gross cash yields ranging from 3% to 3.9%.

The Genesis Of FarmlandFinder

In 2015, when going to a land auction with his father, the company's founder realized that his family was going to have a tough time expanding their operation if they couldn't come up with a solution to gain more land.

If they could expand their land base, without taking on additional debt or find a way to unlock equity that was tied up in land, they could have more control over how they invest in their business.

However, no such solution existed for American farmland. This gap in the market led to the development of FarmlandFinder.

Why Invest In Farmland?

Investing in farmland has a number of benefits that are attractive to investors. Let's take a look at a few of them:

• Solid Return On Investment: With an average return on investment of 7.03%, farmland has grown in value substantially since the 1980s, and continues to follow an upward curve. When you follow its track record, you will see that farmland outperforms all other asset classes, including real estate.
• Low Volatility: It’s a smart way to grow your wealth because the land has less volatility, greater long-term appreciation, and consistent income. Farmland returns have been found to have low volatility when compared to other assets such as U.S. Treasury Bonds.
• Independent Of Stock Market: What’s more, farmland returns usually do not move with the ebb and flow of the stock market. This type of land has been known to thrive in profitability even in years where the market has seen downward free-falls.
• Investing in farmland is an excellent way to diversify your portfolio: The consistent appreciation, capacity for both active and passive income, and the opportunity to hedge against inflation that farmland provides, investment opportunities work to help stabilize and diversify your portfolio.
• Sustaining The Earth: Farmland Finder’s investment opportunities come with tenants in place who practice sustainable agriculture and strive to regenerate the land they work.
• Rising Demand: As the world population continues to grow astronomically, more food will be in demand to meet this need. Simply put, farmland must be protected, and investors are doing their part to help ensure farms continue to thrive.

What Kind Of Info Does The Platform Give Me?

FarmlandFinder has a goal to make it easy for you to access, analyze and acquire farmland that comes with an operator in place.

Financially, it’s free to be a member of FarmlandFinder. The only cost is a few minutes of your time for a quick phone call with one of their land support specialists to make sure the platform is right for you and vice versa.

FarmlandFinder does all the legwork for potential investors, including:

• Access to Exclusive Opportunities
• Investment Analysis
• Soil Maps
• Crop History
• Comparable Sales
• Property Appraisal
• Producer Profile
• Disclosures
• Browse Exclusive Offerings (View exclusive farmland opportunities accompanied with all the information needed to make informed, data-driven decisions.)
• Early Access to Properties (Gain early access to off-market deals coming down the pipeline. Get notified when properties enter the dashboard so you don’t miss out on important offerings.)
• Direct to Farmer Offers (Submitting an offer on farmland has never been easier or quicker! Once you are ready and have selected a property, electronically submit your offer directly to the farmer!)

What Kind Of Agreement Is Drawn Up Between Investors And Farmers?

A sale-leaseback can be an effective means of alternative financing for progressive farmers.

By pairing an owner-operator with a qualified investor through the FarmlandFinder platform, a sale-leaseback can be done in a few simple steps.

A sale-leaseback is when an investor acquires land from a farm owner-operator and then leases it back to them on a long-term basis. This can provide value to farmers when they want to keep farming the land but would like to free up some money. A sale-leaseback provides liquidity to the farmer while helping them maintain ongoing operational control of the land.

The term of the lease refers to the number of years a farmer is agreeing to farm the land and is usually expressed in years or seasons. Many states have laws around how long a farm lease should or could be and when it is legal to terminate the lease with the farmer. An average lease term right now is around three-five years.

As an investor, you’ll have a title, which means you'll own the land in its entirety. The sale-leaseback is a simultaneous transaction where the investor will be deeded title to the land. The process is a very traditional real estate transaction with a lease to the farmer being included.

Midwest Land for Sale on FarmlandFinder

There are currently over 3,200 for sale auctions and listings in Midwest Land, including farmland, pastureland, timberland, wetlands, and investment land. If you’re looking to buy, sell or rent land, Farmland Finder makes it possible to connect with a farmland auctioneer, broker, or agent. You can filter land by type, price, tillable acres, size, and soil productivity. Filtering farmland by return on investment is also possible with their Investment Deals tool.

FarmlandFinder evaluates the qualities of the field as an investment. This includes working with a third-party appraiser. This ensures that between FarmlandFinder’s data and the appraiser’s valuation, the investor has a solid foundation. As an investor, just like in other real assets, you’ll want to understand who your tenant is. FarmlandFinder facilitates the introduction and helps you learn more about the farmer’s operation.

‍What Are The Benefits To Farmers?

Through FarmlandFinder, a progressive farmer can get connected with a qualified investor to create a long-term financial partnership.

It is free for farmers to apply and if they choose to proceed, it costs them nothing. FarmlandFinder does not charge farmers. Investor partners pay a platform fee when they agree to do a sale-leaseback, which is how they are able to offer this service at no charge to farmers.

FarmlandFinder has a simple application process that makes it easy for a farmer to do a sale-leaseback. They can get started by sharing some basic information about themselves, their property, and what their specific goals are. There is no obligation even after they apply.

Benefits to farmers include:

• Strengthening their balance sheet by paying down debt while gaining access to capital to invest in equipment, labor, and infrastructure to optimize farming operations.
• Improving their cash flow to eliminate some of the stress and let them focus on what they do best: run a profitable farm.
• Planning for retirement by capitalizing on land appreciation and unlocking equity that can be used to finance their retirement. Perhaps they want to keep the farm a family business by passing it along to their children.

How Does FarmlandFinder Make Money?

This is done by charging a service fee to the investor. The fee is paid at closing when the investor purchases a farm they were connected to through the platform. However, it is free to open an account and start browsing.

FarmlandFinder Pros

• Helps give financial support to farms, which are the backbone of the country’s agricultural system
• Detailed info provided about farms currently listed
• A chance to get the jump on newly listed properties

FarmlandFinder Cons

• Investments can be high
• Meant for longer-term investors

FarmlandFinder Review: Conclusion

If you’re a smart investor, you know that farmland is an excellent, non-volatile, high-return asset.

But finding the right farmland that fits your goals and budget can be a challenge.

FarmlandFinder serves as the middleman bringing together investors and progressive, profitable farmers.

Sale-leaseback agreements benefit both parties involved in the deal.