Some or all of the products featured here are from partners who compensate us. These partnerships may influence which topics or products we cover but do not influence our reviews. Money Armada is an independent publisher.
In the years following the start of the coronavirus pandemic, many investors have turned away from the investment assets that had been popular in order to find more stable alternatives—particularly ones that would provide a hedge against inflation and recession that many other investments in their portfolios were susceptible to.
For many, agriculture has been the investment of choice in this period, primarily for its hedging benefits and ability to effect real change in our global environmental crisis. If you’re looking to break into agricultural investments, Farmfolio is one way to do so.
Read on for a complete overview of the platform, to decide if it’s a good fit for you.
What is Farmfolio?
Developed in 2015, Farmfolio is an online farmland investing platform that works to give investors the opportunity to invest in a wide range of agricultural products in the rapidly growing farmland crowdfunding market. Providing access to investment opportunities of a variety of scopes in farms across Central and South America.
Using a carefully outlined, data-driven approach, Farmfolio works to identify farmland that has rich soil, good growing conditions, and high-quality crops—a so-called “alpha farm.” Then, they divide the land into Land Ownership Titles (LOTs) and allow investors to acquire them, and break into this lucrative and rewarding asset, without having to actually take on the responsibilities of managing the land yourself.
Should you want a more involved say in the farm, investors are able to become members of the Farm Owners Association, which is a cooperative group comprised of all owners. It makes decisions pertaining to the farm’s daily operations, conducts audits of the land management team appointed by Farmfolio to determine the success of their work, and is responsible for overseeing collection and distribution of the farm’s revenue.
Farmfolio provides investment options for both accredited and non-accredited investors, no matter your financial situation or SEC classification—a somewhat rare perk in the farmland crowdfunding space. Another uncommon benefit of investing with Farmfolio as opposed to another platform is that you’re able to sell or transfer your shares to an heir at any time, rather than being locked into the investment for its complete time horizon. Farmfolio makes it easy to enter the farmland investment space without fear of getting stuck, should you need or want to pull out down the road.
Invest in Farmland
West Coast U.S. Farmland
Access to a secondary market
South American Farmland
Open to non-accredited investors
The pros of Farmfolio
What makes Farmfolio a great platform for users? Here are some of the top benefits of this agricultural crowdfunding investment tool:
- Because Farmfolio uses a rigorous, data-driven evaluation model to ensure they’re procuring successfully operating farms—and hires land management professionals to handle all the logistics of actually running a farm—investors can rest assured that they’re purchasing shares of farmland that is productive, well cared for, and meticulously managed.
- Farmfolio’s farms are located in agricultural hotspots like Colombia so you get more land for your money and also benefit from reduced labor costs than you’d see in similar operations in more expensive countries.
- Farmfolio allows you to be as involved or hands-off as you want to be. For some investors, knowing that their investment is being managed by others and that they’re not obligated to get too far into the weeds of what that management actually entails is a huge relief. But for others, being thoroughly informed and involved in that process is preferable. By giving investors the option of joining the Farm Owners Association, they’re able to choose which route they want to take.
- Investors profit not only from the appreciation of the land they invest in, they also gain passive income from the harvest of food grown or produced on the land. Because the farms on Farmfolio have been vetted, you can rest assured that the farm will produce high yields. As an added bonus, Farmfolio has distribution agreements with top national retailers like Costco and Walmart, ensuring harvests are sold to trusted and reliable vendors.
- Both accredited and non-accredited investors are welcome to invest in farmland through Farmfolio. This means that anyone is able to peruse the farmland ownership opportunities and private equity opportunities available on their site, consider the scope and fine print of the opportunity they find interesting, and invest—so long as they’re able to cover the minimum investment.
- Farmland is a high-return, low-volatility asset—on average, farmland returns an annual 11.5%
The cons of Farmfolio
The benefits of using Farmfolio are compelling, but what are the downsides to the platform? Here are the most significant drawbacks of Farmfolio, based on our review:
- One major drawback to Farmfolio in a long-term context is a lack of diversity in the crops they grow. While farms are across South and Central America, and not every farm grows the same things, there is a thread of commonality across them. Products like limes, avocados, coconuts, and teak are prevalent. In the event that global demand for these goods decreases, since there’s no existing crop diversity, this could spell trouble for Farmfolio investors.
- While both accredited and non-accredited investors are invited to participate on Farmfolio, the minimum investments on the platform are often quite high—between $30,000-$65,000, currently. Since farmland is an increasingly sought-after asset, opportunities to invest often move very quickly, meaning investors need to be well informed, decisive and financially well-off in order to even have a chance on this platform.
Is Farmfolio right for me?
When trying to determine which platform to use as a launchpad into a new investment category, it can feel overwhelming and stressful to commit. Which platform offers the best opportunities to diversify your investment portfolio, which has hidden fees that will make you regret your investment down the road, and which one will get you the best returns at the end of the day?
While there is no singular right answer to these questions, there is a right answer for you. If you’re looking to break into farmland investing with a good nest egg ready, want to try this asset out without getting locked into a long-term commitment you can’t reverse, and value having options on how involved you are in farmland operations and management, Farmfolio is a great option for you.
A scalable foray into farmland investing
Whether you’re looking to hedge your existing investments, diversify your portfolio, or make a positive environmental impact, investing with Farmfolio is a strong contender in the world of farmland crowdfunding platforms.
If you have the resources and are quick in your decision-making, investing in a Farmfolio LOT is a fantastic, customizable way to try out investing in a new asset. Choose an opportunity that meets your investment criteria, determine the degree of involvement you want to have in your farm, and reap the financial benefit of each harvest until your time horizon is complete—or sell your LOT early to get out of farmland if you find it’s not for you.
No matter what you decide to do, Farmfolio makes the process a breeze for new investors.