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Recently, farmland investing has grown significantly in popularity—even among everyday investors. Some attribute this growth to the uncertainty of global financial markets in the years since the COVID-19 pandemic sent waves through every sector of society. With so much tumult in popular investment spaces, seeking out alternative options seemed like a safer option.
Another driver of the rise in farmland investing is the increase in easy access to it. In 2022, farmland crowdfunding has seen a drastic increase in popularity, with platforms dedicated specifically to this niche making it easy and inexpensive to break into this investment asset. While previously investors would need tens if not hundreds of thousands of dollars to invest directly in farmland, these crowdfunding options make it possible to break into this space for $1,000 to $10,000.
If you’re looking to invest in farmland, crowdfunding might be the avenue for you. Read on to learn everything you need to consider before getting started.
Why pursue farmland crowdfunding?
While investing in farmland has previously been seen as something of a risky asset to pursue since its value doesn’t always correspond to trends elsewhere in the stock market, farmland crowdfunding has created a way to get involved without taking on such risk. And with this reduced risk, farmland stands out as a great investment for several reasons, including:
- Diversification: Investing in farmland means you hold value in the land itself, earning money from the rent and other profits accrued from the farm you’re invested in. This asset adds much-needed diversity to most stock and bond-heavy investment portfolios.
- Reduced volatility: Because land appreciates over time, farmland is generally less volatile than stocks.
- Hedging: In uncertain or inconsistent financial times, farmland assets hedge against inflation. This is because, as everyday costs rise, the price of the food products produced on farms will rise accordingly.
Agriculture crowdfunding platforms reduce the stakes of dabbling in this asset before determining whether or not you want to invest more substantially into farmland.
Invest in Farmland
West Coast U.S. Farmland
Access to a secondary market
South American Farmland
Open to non-accredited investors
The 5 best farmland crowdfunding platforms
How it works: A new addition to the agricultural crowdfunding scene, it’s considered one of the most well-established platforms in the space. Peruse various types of deals from around the country, ranging from owners selling their farms outright to investors, selling a portion of their operation, or putting up the property for a set number of years to be rented to another tenant, before they resume ownership. Each deal details an expected cash yield for investors as well as an overall return to help you determine your interest.
- Low fees and minimums and high-transparency deals.
- Competitive returns on investments.
- New deals from farms around the country are posted every week.
- Only accessible for accredited investors currently.
- Requires a minimum investment of $10,000 to get started on the platform.
- No secondary market on the platform—that means you’re not able to sell out of investments early. Plan to hold them for 3-5 years.
2. Farmland LP
How it works: As far as agriculture crowdfunding goes, Farmland LP is the oldest platform of the group. They strive to make sustainable farming more prevalent across the country by buying out commercial farmland into organic farming operations. Investors not only reap financial rewards but are able to initiate real, impactful improvements on the land and our environment. If your interest in farmland investment is related to sustainability, this is the platform for you.
- As the oldest platform, you’re getting an established, trusted place to trade in farmland.
- Not only a financial investment but an investment in improving our natural resources and access to healthy, organic foods. By improving the land, Farmland LP organic farms can produce up to 4 times as much profit-per-acre as their commercial counterparts.
- Only two investment options are available on this platform—limited partnerships and an REIT option.
- Limited partnerships have caps and once reached, don’t take on new investors. The REIT is only open to accredited investors and requires a $50,0000 minimum investment to be considered.
How it works: This platform works to get capital directly to small, independent operations in the farming, ranching, and fishery industries. Steward gives investors the opportunity to deal in debt or lending options so that smaller entities that have historically struggled to find investors can grow. Investors are able to identify issues they’re passionate about and work to improve them directly through providing funding.
- The minimum investment is $100, there are no fees for investors to use the platform, and investors don’t need to be accredited.
- Debt-based deals are more predictable than equity, meaning it’s a safer option for investors still working to establish themselves.
- Invest directly in an issue you care about like biodiversity, regenerative agriculture, or animal welfare.
- Steward has a lower return rate than larger farmland crowdfunding platforms, though not by much: interest rates are usually between 5%-10%.
- The platform doesn’t provide a typical annual return on investments—though your investment will yield some interest.
How it works: Rather than investing in underlying farmland specifically, FarmFundr specializes in giving investors shares of a whole farm and direct management to the farms you invest in. That means you profit not only off the land but also the crops it produces and sells. While many farmland investing platforms pay investors for rent, FarmFundr instead finds land managers for the property and pays them directly.
- Offers multiple investment minimums for investors to choose from.
- Gives investors direct management options for the farms they choose to make deals with.
- Only accredited investors are able to trade on the platform.
- Minimums are between $10,000-$100,000, making them inaccessible to some.
- This platform offers less transparency than others, like unspecified holding periods, income distribution, and fees.
How it works: This farmland investing platform buys successful farms in California and the Pacific Northwest, then allows investors to purchase shares for themselves. Use their Investment Size Calculator tool to determine exactly how much cash flow and the final payout you can expect from each deal you consider, making it easy to decide which is a good fit for your portfolio. They also provide a time horizon on each deal so you’ll see clearly when you’ll reap the bulk of their investment gains.
- Because FarmTogether deals in established, successful agricultural operations, you’ll see cash flow generated on your investment quickly.
- Tools on the platform help you understand the full scope of each deal and determine which one best meets your requirements.
- Most investments have cash yields of 3%-9% and total returns in the 7%-13% range, making them competitive among farmland investing platforms.
- FarmTogether offers a secondary market, meaning you can sell investments before you reach the end of the investment’s timeline, if needed.
- Only accredited investors are able to join the platform.
- A minimum investment of $10,000 is required in order to take part in investing with this agriculture crowdfunding platform.
How do you get started with agriculture crowdfunding?
If you’re interested in building farmland into your investment portfolio, first consider the full scope of your circumstance, personal investing goals, and investment time requirements. Remember that farmland, while a great option for investment diversification, does have a relatively long time horizon and is an illiquid investment.
Once you have a good sense of your goals in farmland, weigh them against the above farmland investing platform descriptions. One of them is likely to jump out as a standout contender. Reach out to the platform directly to learn more of the details involved with being an investor with them, then get started identifying your first deal.
Investing in a greener future
While investing is a great way to build personal wealth, agricultural crowdfunding allows you to do so while also having a positive impact on the land, the health of the food we eat, and our overall environment. If you’re interested in exploring this asset, farmland crowdfunding platforms are a great way to take this asset out for a test drive before diving in deep. Whether you’re looking for a shorter investment time horizon, a lower minimum investment, or a more meaningful impact, one of the platforms outlined above is ready to get you started in the farmland investing game.