Farmland investing vs real estate investing

Farmland vs Commercial Real Estate 2024: Which Is Best?

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The asset classes of Farmland and Commercial Real Estate, while distinct in their nature and operation, share some similarities and also exhibit key differences.

Here's an overview in this full comparison of Farmland vs Commercial Real Estate.

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PlatformMinimumLinkAccredited OnlyInvestments
AcreTrader farmland investing platform$8,000+View InvestmentsYesUS Farmland, Timberland, Vineyards

Farmland Investing 101

Farmland has provided investors with consistent returns for decades, but gaining exposure to this alternative asset has been a challenge in the past.

Today, you can invest passively in farmland through crowdfunded real estate platforms like AcreTrader.

AcreTrader Investment

Instead of buying a farm yourself, investors pool their money together. And instead of managing the farmland yourself, AcreTrader takes care of that. They handle everything from the paperwork to finding a suitable farmland renter.

Click Here To View Current Farmland Investments On AcreTrader!

To date, the team over at AcreTrader has funded 149 properties, totaling over $365 Million in equity raised. This has been invested into over 50,000 acres of farmland.

Looking to learn more? Here's our full review of AcreTrader.

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.

Similarities: Farmland vs CRE

  1. Tangible Assets: Both are tangible real estate investments, meaning they involve investing in physical land and structures.
  2. Income Generation: They can provide steady income streams – farmland through agricultural production and sales, and commercial real estate through leasing space to businesses or residential tenants.
  3. Long-Term Investment: They are typically considered long-term investments, often appreciating in value over time.
  4. Inflation Hedge: Both asset classes can serve as a hedge against inflation. As the value of currency decreases, the value of physical assets like real estate and farmland often increases.
  5. Capital Appreciation: Apart from income generation, both can experience capital appreciation – an increase in the market value over the cost.
  6. Tax Benefits: Investments in both sectors can offer tax advantages, such as depreciation and potential tax-deferred growth.

Differences: Farmland vs CRE

  1. Market Dynamics: Farmland is influenced by agricultural markets, climate conditions, and global food demand, while commercial real estate is more directly tied to business cycles, local economic conditions, and commercial tenant demand.
  2. Volatility: Farmland typically experiences lower volatility compared to commercial real estate, as food demand is relatively constant, whereas commercial real estate can be more sensitive to economic fluctuations.
  3. Management and Expertise: Farmland management requires agricultural knowledge and can be more labor-intensive, while commercial real estate management is more about property maintenance, tenant relations, and lease management.
  4. Barrier to Entry: Commercial real estate often requires a higher capital investment compared to farmland, though this can vary widely depending on location and property type.
  5. Liquidity: Commercial real estate generally offers greater liquidity than farmland, as there is a larger market of potential buyers and investors.
  6. Regulatory Environment: The regulatory environments can be different, with farmland subject to agricultural policies and land use regulations, and commercial real estate to zoning laws, building codes, and commercial leasing regulations.
  7. Use and Development Potential: Farmland is primarily for agricultural use, which can be limited in terms of development. In contrast, commercial real estate can be developed and redeveloped in numerous ways depending on zoning and market demands.

Conclusion

Both asset classes have their unique attributes and can be valuable additions to a diversified investment portfolio, but they cater to different types of investors with varying risk tolerances, investment horizons, and areas of expertise.

Don't Miss This Opportunity!

Invest In U.S. Farmland And Timberland Passively With AcreTrader!

 

Each parcel is divided into shares, and investors can purchase shares to earn cash distributions as well as benefit from the land value appreciation.

Farmland Riches is affiliated with AcreTrader, and we may earn a commission when you sign up for AcreTrader.

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