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When preparing to step into a new investment space, you want to make sure you’re doing it with intention and forethought, rather than rushing in for the sake of getting in the game. Investing your money is a significant financial decision, but it has implications that extend far into other areas of your life as well. It’s important to make sure you’re choosing a platform that will support you in this new endeavor and protect your interests at every step of the way. So how do you know who to invest with?
There is no shortage of platforms to choose from in farmland crowdfunding platforms, but two of the top names you’ll definitely want to compare before investing are AcreTrader vs FarmTogether. In this article, we’ll explain the benefits and drawbacks of each platform in order to provide you with a foundational basis for evaluating which is right for you.
What is AcreTrader?
Up first in our comparative overview is AcreTrader. This platform was established in 2017 by a group that had experienced success in farmland investment and wanted to make it a more accessible asset class for others.
AcreTrader specializes in crowdfunded investments in productive farming, rather than commercial real estate like many other farmland crowdfunding companies. It functions essentially as a marketplace: connecting farmers who want to raise capital to run or expand their operations with investors looking to add farmland to their portfolios.
The Pros and cons of AcreTrader
What are AcreTrader’s high and low points? Let’s take a closer look at this company.
- Rated an A+ business by the Better Business Bureau, giving it credibility in the industry
- Compared to many other platforms, AcreTrader is transparent about its fees—a low annual service fee of 0.75%, a closing fee on initial investments of 2%, and a disposition fee on property sold at 5%.
- Investment minimums vary, though are generally lower than competitor rates at $10,000-$35,000.
- AcreTrader offers shorter holding periods than other crowdfunding investment platforms, with some as low as 3 years.
- Customers have rated AcreTrader’s customer service very highly and say the website interface is very intuitive and pleasant to use.
- With only 5 years in business, some may feel AcreTrader has a limited track record—though it’s the same number of years as FarmTogether’s been around, and these are two top contenders in the industry
- You must be an accredited investor to use the platform, meaning you need to prove you made $200,000 individually or $300,000 with a spouse each year for at least the last two years, and have a net worth of $1 million.
- AcreTrader provides a relatively small number of investment options, and some have criticized the platform for not providing new offers frequently enough.
- Currently, no secondary market is available on AcreTrader, meaning you have to maintain your investment for the duration of its holding period. However, an early redemption option is reportedly being developed.
What is FarmTogether?
Also established in 2017, FarmTogether is another agricultural crowdfunding investment platform that lets investors pool resources with others in order to diversify their portfolio with the addition of this increasingly sought-after asset class.
FarmTogether was established with the intention of democratizing access to farmland. By bringing new investors and capital into this space, FarmTogether strives to help fund innovative agricultural projects that will allow for the development and implementation of climate-smart practices that protect our natural resources and better prepare us to meet the increasing demand for healthy food as our populations grow.
Pros and cons of FarmTogether
Here are FarmTogether’s pros and cons to help you get a better sense of the company:
- FarmTogether provides all the appropriate due diligence and legal documentation investors want in order to ensure their investment is secure.
- They also collaborate with Farmland Opportunity, a reputable firm with over a decade of experience in farmland investment brokerage and more the $400 million in assets currently under management.
- Investors can expect returns between 7%-13%.
- Allows investors to invest in active farmland as well as 1031 exchange.
- FarmTogether works with farms growing specialty crops in weather and soil conditions that are ideal for high-yield crops, meaning you’re likely to see high returns from harvest payouts.
- FarmTogether has sustainability built into its business model. It’s committed to centering sustainable farming in its projects in order to both increase yields, improve the health of farmland, and develop advanced farming practices that will advance the industry.
West Coast U.S. Farmland
Access to a secondary market
South American Farmland
Open to non-accredited investors
- Like AcreTrader, FarmTogether requires you to be an accredited investor in order to use the platform, meaning you need to prove you made $200,000 individually or $300,000 with a spouse each year for at least the last two years, and have a net worth of $1 million.
- Compared with AcreTrader, FarmTogether has a higher minimum investment range of $15,000-$50,000.
- Investments are not liquid, meaning you are required to hold them for the full duration of their time horizon—generally between 5-12 years.
- FarmTogether holds some key information behind registration walls, like access to specific fee breakdowns their investors pay. While we know that the amounts owed vary based on the type of deal and that they strive to be at the low end of fee averages in the industry, more detailed information and ranges are only provided to members.
FarmTogether vs. AcreTrader: Which is right for me?
Having reviewed AcreTrader vs FarmTogether, you likely saw a number of things you liked, a few other things you didn’t—as well as a lot of things that applied to both platforms. With all that on the table, how do you determine which is right for you?
It’s a tricky decision to make—they’re top competitors because they’re both great platforms, and they’re also quite similar, as far as crowdfunding investment platforms go. Beyond the simple listed pros and cons, they both make use of similar investment methodologies, allow accredited investors to pool resources in order to make farmland investing more reasonable than ever before, and promise similar returns on investment.
The differences are subtle, but once you’ve taken a close look at your personal circumstance, your portfolio, and your individual goals in farmland investing, it’s likely that one will stand out to you over the other. For example, perhaps you’re looking to get into farmland because of your passion for sustainable agriculture, making FarmTogether a more attractive platform. Alternatively, maybe you’re looking for a lower minimum investment—in that case, AcreTrader is your best bet.
There’s no wrong answer
While there are many difficult questions to navigate in the world of investing, this doesn’t have to be one of them. Review the pros and cons of each platform and make a decision about which better meets your needs and aligns with your portfolio goals. No matter which you choose, you’ll find yourself in good hands.