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- Farmland investing is becoming more popular due to its stable returns, low volatility, and hedge against inflation.
- Online platforms such as AcreTrader, FarmTogether, and Harvest Returns make it easier for individual investors to access farmland investments.
- These platforms allow investors to invest in farmland properties and receive a share of the profits.
- Most platforms require a minimum investment of $5,000 to $10,000.
- Investors should do their due diligence and understand the risks associated with farmland investing, such as weather events, commodity prices, and regulatory changes.
Top Farmland Investing Platforms
There has never been a better time for the everyday investor looking to get started with farmland investing.
The rise of farmland investing platforms has enabled access to this asset class for as little as $100! In the past, investors typically had to pay hundreds of thousands to invest in farmland directly.
Institutional investors like university endowments and pension plans have long known the benefits of investing in agriculture. As a result, these investors have historically kept around 10% of their portfolio in natural resources. And for good reason!
At the same time, farmland experienced nearly a third of the stock market's volatility. This has made farmland a desirable investment for many people looking to diversify their portfolios.
This article will outline 6 of the top farmland investing platforms for beginners.
Accredited vs. Non-Accredited Investors
Becoming an accredited investor is one hurdle for many investors looking to invest through these platforms. To become an accredited investor, you must meet specific income or net worth thresholds.
The reason that some of the platforms are limited to accredited investors is that they offer private placements. These types of investments are considered to have a higher level of risk. Thus the SEC wants to protect smaller investors.
The two main routes to becoming an accredited investor are having a $1,000,000 net worth or having an income of $200,000 or more ($300,000 if married). You cannot include your primary residence in the calculation to meet the net worth requirement.
Fortunately, while many of these farmland investing platforms require investors to be accredited, many still need to. So whether you are an accredited investor or not, there will be something for you.
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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|
AcreTrader is one of the newer farmland investing platforms to hit the scene. Founded in 2018, the crowdfunding platform allows investors to pool their money to purchase more important deals.
Since their launch, they have gone on to see significant traction. Over the last three years, Acretrader has raised over $304 million in equity. Of the 127 properties funded through their site, AcreTrader has nearly 40,000 acres of farmland in the portfolio.
You can invest in various deals on the platform across the United States. Most deals involve farmers selling their farm to investors, investors holding the property for several years, and selling it. While the property is born, it is rented out to another farmer to generate income for investors.
Returns on the platform vary based on each project. Investors can see an estimated cash yield and overall return for each deal and decide whether or not to invest.
Most projects on the platform have a cash yield of 3% – 7% and an overall return of 8% – 12%.
To get started on the AcreTrader, investors must invest at least $10,000 to $25,000. However, some projects on the platform will require a $15,000 – $25,000 minimum investment.
Investors should keep in mind that there is no secondary market on AcreTrader. As a result, you will not be able to sell out of your investments early and should be prepared to hold them through to completion. This will generally be a 3-5 year time frame.
Currently, the platform is only open to accredited investors.
A standard 0.75% annual servicing fee will apply to all deals on the platform. Additionally, some deals will include a closing fee (paid by the investor) or a broker's fee (produced by the farmer).
Check out our full review of AcreTrader here.
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 various 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 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.
- Income is generated through rental payments via lease agreements (row crops) or direct management contracts (permanent crops) and the revenue generated by farming operations.
The team targets opportunities that typically yield 6-13% returns with 2-9% cash yields – all net of fees.
Steward is a unique platform because they exclusively offer debt or lending. The platform launched in 2016 and was designed to provide small independent farmers, ranches, and fisheries with access to capital. Since launching, the company has fully funded 72 deals with over $23 million.
Historically, it has been difficult for these farmers to get bank loans, so as a lender, you can address this issue and help them in the process.
With Steward, investors can invest through the Evergreen fund, which supports several campaigns. On the other hand, periodically, Steward releases specific lending opportunities investors can choose to participate in.
Another critical benefit to Steward is the low minimum of just $100!
An advantage of participating in debt-based deals is that they tend to be more predictable than equity deals. That's because there is a set interest rate and payment schedule for each loan made on the platform. So you know when you'll get paid back and how much ahead of time.
Generally, this comes with slightly lower returns, as most deals on the platform have an interest rate of 5% to 10%.
Also, individual lenders do not pay anything to use Steward. However, farmers pay a small fee to list their projects on the site.
Non-accredited individuals have access to all the deals on the Steward platform, making them one of the best beginners.
Check out our full review of Steward here.
Founded in 2015, FarmFundr allows investors to buy shares in entire farms, not just the land they sit on. As a result, investors receive a percentage of the profits generated when the harvest is sold.
Most farmland investments will pay investors periodically through rent payments from farmers; however, with FarmFundr, the land is not being rented out. Instead, FarmFundr finds operators to manage the land and pays them directly.
By participating in the harvest, investors take on more risk and have the potential for a more significant upside. For example, on one of the deals on the platform, the harvest produced 8.8% more crops than expected, and the selling price was 6% higher than expected. Because they owned the farm itself, investors could participate in these gains.
Only accredited investors can invest with FarmFundr; minimum investments start at $10,000 per deal.
You'll need to look out for the fees if you plan on investing on the platform. Each deal will have a different fee structure that may include an upfront cost, an ongoing management fee, an incentive fee, or FarmFundr taking a portion of the equity stake in the deal.
Check out our FarmFundr review for more information.
5. Farmland LP
As the oldest crowdfunding site feature, Farmland LP was founded back in 2009. The company aims to move sustainable farming forward nationally by converting conventional commercial farmland into organic farmland. The company manages over 15,000 acres with over $200 million in assets.
Farmland LP can create significant value-adds through their investments by improving the land. As a result of these improvements, Farmland LP can generate 4x as much profit per acre as conventional farmers.
Part of this is due to the supply and demand imbalance in the market for organic foods. Over 4% of all food consumption is organic, but less than 1% of farmland is organic. One of the reasons organic produce tends to be more expensive at the store is because there needs to be more of it.
By capitalizing on this trend, Farmland LP has consistently delivered results that have beat expectations year-over-year.
Farmland LP only offers two investment options: a limited partnership and a REIT. The limited partnership raised over $80 million and needs to take on new investors. The REIT is taking on new investors, requires a hefty $50,000 minimum investment, and is only open to accredited investors.
Here's our full review of Farmland LP.
6. Harvest Returns
Since 2016, Harvest Returns has provided a way for farmers to raise funds and investors to generate returns. To date, the platform has raised over $11 million and funded 23+ different farms.
What sets Harvest Returns apart from many of the other platforms is the partnerships they have with farmers. Instead of establishing a transactional relationship, Harvest Returns works with farmers to ensure they can get what they need from the platform.
Deals on the platform can be structured as debt or equity, depending on the farmer's goals. Debt-based deals generally have less risk and lower returns, whereas equity-based deals tend to be more volatile with higher upside potential.
Fortunately, Harvest Returns allows several non-accredited investors to invest in many deals on their site. Due to the legal structure of many values, as many as 35 non-accredited investors can participate.
With minimum investments as low as $10,000, this platform is more accessible to smaller investors.
Investors also have the option to invest on the platform using retirement funds. This is due to Harvest Returns' partnerships with nine self-directed IRA providers. By rolling a retirement account to one of their partners, you can invest on a tax-advantaged basis.
Please read our review of Harvest Returns for more info.
Farmland Investing Platforms: Final Thoughts
Investing in farmland has long been a coveted asset for its steady returns and ability to perform in market uncertainty.
However, this asset class has traditionally been challenging to reach for most investors. Historically, purchasing a farm outright was the only way to start. Today, investors can get started with much greater ease.
These seven farmland investing platforms are all currently accepting new investors. While each forum has different strategies and minimum investments, they all expose investors to farmland and asset class. And the main benefit is that investors can do it from their living rooms!
If you want to get started, please take a closer look at one of these farmland investing platforms with our total reviews.
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.