Farmland investing is one of the most lucrative investments out there. You don’t even need to start farming to make money off it. But how do you know where to begin? We’ve put together a list of the best farmland investing platforms for beginners in 2023.
The easiest way to invest in farmland is to purchase shares on a farm. This gives you full control over what crops grow on your plot of land. However, many people find this too complicated. Instead, we recommend buying multiple plots of land. These allow you to diversify your portfolio and receive income from each plot.
Why Invest in Farmland?
Farmland is one of those assets that people tend to forget about. But it’s actually been performing exceptionally well over the past few years. In fact, according to data compiled by Bloomberg Intelligence, farmland has outpaced almost every other asset class since 2013. The reason why farmland is such a great investment is that it provides a steady stream of income. And unlike most investments, there are no short-term risks involved.
The best part is that farmland doesn’t require much maintenance. So even though you won’t see huge returns overnight, you shouldn’t have to worry too much about making up for lost time either. There are plenty of reasons why you should invest in farmland. Here are our favorites:
1. Income
One of the biggest benefits of farmland is that it generates consistent cash flow. This is especially true for farms that produce crops like corn, wheat, soybeans, etc. Because farmers don’t need to spend money on fertilizer or pesticides, they can focus on growing food rather than spending money on things like marketing campaigns.
2. Diversification
Another benefit of farmland is that it offers diversification. If you invest in farmland in different parts of the world, you’ll be able to reap the rewards of having access to multiple markets. For example, if you buy land in China, you’ll still be able to sell your products in North America.
3. Low volatility
Farmland returns are less volatile than they used to be. In fact, according to the latest data from USDA, farmland values fell 2% during 2018, compared to 2017. This is the lowest level since 2008. But don’t worry — it’s still good news for farmers.
The reason why farmland values are down is that there aren’t many buyers out there. There’s no shortage of people looking to buy property, but the market just isn’t very active. So what does this mean for you?
People will always need food to feed themselves and their families. Food production is a necessary part of life. And even though we might see some fluctuations, it’s unlikely that we’ll ever run out of food again.
4. Low correlation
Farmland doesn’t always go hand in hand with the stock market. There are times when farmland performs better than stocks. But it’s important to note that this isn’t something you’ll see every single year.
The correlation coefficient measures the strength of the relationship between two assets. A perfect positive correlation means that one asset goes up when the other does. If both assets go down at the same time, it indicates a negative correlation.
In general, the correlation between farmland and the S&P 500 index is 0.15. This number means that farmland tends to move 15% faster than Inflationary the S&P 500.
Farmland investing is one of those areas where you can find great opportunities. There are many different ways to go about it. Some people prefer to buy land directly from farmers while others like to use investment platforms to help them make smarter decisions. Either way, there are plenty of options out there to choose from. Here are three of the best farmland investment platforms we found.
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3 Best Farmland Investing Platforms
1. AcreTrader – Best Overall
Acretrader is a platform that enables people to make investments directly into farmland. They offer both long-term investments and short-term options. The platform is very easy to use and gives you full control over your portfolio.
You can start investing today and earn up to 12% annually. Investors can choose to invest between USD 8,000 – USD 100,000 per farm. The company provides direct investment opportunities which makes it easier for farmers to find good deals.
AcreTrader offers a flexible investment tool that allows investors to choose how much money they want to invest. They are offering a wide range of products including agricultural land, livestock, equipment, machinery, seeds, fertilizers, pesticides, etc.
Click here to view current offerings on AcreTrader!
2. Farmfolio
Farmfolio is a real estate crowdfunding platform where investors make loans against properties. Investors can choose how much money they want to lend, and what interest rate they are willing to pay. Loans are repaid over up to five years.
Once the loan term ends, the investor receives his/her principal amount plus interest. If the property does not generate enough income to cover the payments, the lender gets his/her original investment back.
Investors receive regular monthly statements showing the status of their investments. They can track the progress of each property they invested in, view photos of the property, and even contact the owner directly.
Click here to view current offerings on Farmfolio!
3. Farmfundr
FarmFundr is a good investment opportunity for those looking to invest in agriculture without having to deal with the headaches associated with owning real estate. FarmFundr is only open to accredited investors today.
A private placement allows investors to buy shares directly from sellers. This option is ideal for those looking to make a quick return on their money. In a private placement, cash yields range from 3% to 9%. However, total returns average 7% to 13%. On the flip side, a public offering provides investors with a way to diversify their portfolios.
With a public offering, investors pool their funds together and sell shares to buyers. This type of investment is best suited for those looking to build wealth over time. Cash yields on farm deals vary depending on location. For example, cash yields in California are about 5%, while cash yields in Florida are around 8%.is a private investment firm that offers a crowdfunding option where you put up money and invest directly with them. They claim that they can raise $1 million per month in sales.
They target 812% returns. However, there’s no transparency with this company. You won’t know exactly what farms they own or what number of investors have invested in each one.
Click here to view current offerings on Farmfundr
Farmland Investing Platforms Pros & Cons
Farmland investing platforms are becoming increasingly popular because they provide investors with access to high-quality land assets. They also make it easier for those who don’t have much money to invest in real estate. However, there are some pros and cons associated with these types of investments.
Farmland Investing Platforms Pros
– Farmland investing allows you to diversify your portfolio. You can invest in a wide variety of properties such as farms, ranches, vineyards, etc.
– Land prices tend to increase over time, especially in areas where demand is growing. This makes farmland investments a good way to build wealth over time.
Farmland Investing Platforms Cons
– There is no guarantee that farmland will appreciate. Some of the best farmland in America is owned by large companies. Companies like Walmart, Kellogg, and Tyson have invested heavily in farmland.
– Farmland investing requires a lot of research. If you want to find out what type of property you’re interested in buying, you’ll need to do extensive research.
– Many farmland investing platforms charge fees. Fees vary depending on how much capital you put into the platform. For example, some platforms charge a flat fee while others charge a percentage of your total investment amount.
Conclusion
Farmland investing platforms are becoming increasingly popular because it allows people to easily access farmland. Investing in farmland can be beneficial for those looking to diversify their portfolios. However, there are some things you must consider before jumping into the world of farmland investing.
Farmland investment plate forms aren’t for everyone and may not be for you. Consider farmland ETFs as an alternative.
Farmland Investing Platforms FAQ’s
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