Acretrader is a farmland investing platform that allows you to invest in U.S. agricultural land and start building a portfolio of quality farm land real estate in just minutes online.
AT A GLANCE
- Diversify your portfolio with farmland
- Earn annual cash yields
- Complete farm management
- Outstanding customer reviews
Top rated farmland investing platform
Pros & Cons
Now that you know a bit more about AcreTrader, here are some pros and cons to mull over when deciding if this real estate investing platform is for you.
Have you ever considered investing in farmland? Think about it — farmland is always needed, it has the potential to grow in value since practically everyone in the world needs to eat.
Since the agricultural industry isn’t going away anytime soon, your farmland investment has the potential to hold out long term. The problem is that farmland isn’t an asset class that's approachable for most folks.
Not many people have millions of dollars laying around to invest. Before looking at other types of real estate broker, consider AcreTrader - who can help make investing in farmland more feasible.
It’s a crowdfunding platform that lets investors purchase shares in farmland. Gains are earned from land appreciation or through farmers who rent the farms.
If you’re not sure whether farmland is right for your investment portfolio, read our AcreTrader review to understand what it’s about, the pros and cons, and who it’s best suited for.
Minimums: $5,000 to $10,000 depending on project
Fees: 0.75% annual fee plus closing fees
Promotion: No promos at this time
What is AcreTrader?
Founded in April 2018 in Fayetteville, Arkansas - by Carter Malloy, a financial services professional who grew up in a farming family. AcreTrader is a crowdfunding platform that offers farmland shares to accredited investors.
The company has four advisory members and six employees. The team has experience in the agricultural and financial services industry.
Since March 2019, AcreTrader has been accredited with the Better Business Bureau with an A- rating. In early 2022, its A+ rating was holding strong - with zero complaints and 5 star reviews across the board.
Why Investing in Farmland is a Big Deal?
It may seem strange to invest in farmland since there are so many other types of real estate investments (plus plenty of crowdfunding companies and commercial real estate investing platforms that can help).
However, farmland is considered one of the best performing investment vehicles since 1990 according to research from AcreTrader.
If you think about it carefully, humans will need food as long as the world exists, creating demand for farmland to grow crops.
Plus, the population is expected to keep growing so the need to increase crop yields will increase, meaning farmland has the potential to become even more valuable over time.
Since farmland is considered a hard investment, it isn’t subject to the whims of the stock market. It’s also a relative steady investment since there has been low volatility historically.
Besides, farmland provides food which is a much needed commodity. Meaning, that there won’t ever be a zero demand for food. That’s not to say you should take all your money and put it into farmland.
What you can do is consider it as part of a well diversified portfolio since land is necessary for so many businesses. To learn more, AcreTrader has a free whitepaper that shows you more about farmland investing.
All you need to do is provide some personal information like your name and email address and you they will send it to you free of charge.
How AcreTrader Works
Accredited investors can put money down to invest in shares of farmland and farmers can sell their land to these investors. AcreTrader takes a cut via its asset management fee and from closing costs.
With each investment, AcreTrader creates an LLC which owns the property. The LLC will then lease the farmland to local farmers with a solid track record who’ll pay rent — this is common in the farming industry.
Rent is collected before the planting season and a new farmer will replace one that doesn’t pay.
As mentioned above, you need to be an accredited investor to be able to invest with AcreTrader which is typical of many real estate crowdfunding websites.
Here’s how you qualify as an accredited investor:
- Make at least $200,000 as an individual or $300,000 with your spouse for the last two years and expect to make the same income in the current year.
- Or, you need you have a net worth (individual or joint) of at least $1 million, not including your primary residence.
Once you’re on the platform you can choose investments that AcreTrader has fully vetted. The company has done their due diligence — only 5% of properties it reviews are accepted.
Listings on AcreTrader will show you the location, required minimum investment, gross cash yield, AcreTrader rating (more on this later) and net annual return.
You’ll be able to get more details with listing since you’re able to access location maps, financials for the farm, investment rating, ownership documents and a general overview of the farm.
Once you make an investment, you can track any developments or information pertaining to the property on your dashboard. Investors may also be notified by email of developments.
You’ll typically receive your passive income distributions annually, usually in December, though that’s not guaranteed.
How Do I Make Money With AcreTrader?
There are two ways to make money from investing with AcreTrader: dividends from annual rent payments and land appreciation.
AcreTrader says that returns are expected to be anywhere from 3% to 5% for lower risk properties.
Each share you purchase represents one tenth of an acre and can cost from $5,000 to $10,000, though there are some outliers that are higher and you may need to invest in a minimum of an acre.
Expect holding periods to be three, 5 or as long as 10 years. If you want to sell your shares before the expected holding period is over, you can do so using the platforms marketplace service.
Although, as a secondary market, it's important to understand that your shares might not sell.
The good news is that AcreTrader handles all of the administrative part of managing farmland — insurance, accounting, working with farmers to ensure land is usable — but you may not get more than what you pay when you sell your share.
Keep in mind that there aren’t as many offerings as you’ll find with other real estate crowdfunding websites. So far, the track record from buying farmland shares aren’t clear.
AcreTrader Features & Benefits
You can sign up with AcreTrader for free, but whenever you make an investment, you’ll need to pay fees. First, there are closing fees which could cost up to 2%, plus a 0.75% annual fee.
You’ll receive income distribution information on IRS Form K-1 which is typical of most real estate crowdfunding platforms.
Any rent distributions will be taxable in the year it's earned and capital gains will be taxed when the property is sold. It's important that you seek independent professional tax advice for further details however.
There’s no specific customer service hours on the website, you can call AcreTrader via their toll free number, email, or web contact form.
Other Investment Considerations
You need to make a minimum investment per share which is a tenth of an acre, although you may be required to buy more shares.
Then once you commit, the term can range anywhere from 3 to 10 years.
If you want to sell shares before your term is up, you can list them on the platforms marketplace - although there's no guarantee that they'll sell.
Looking at AcreTrader Ratings
AcreTrader rates each property from A1 to D3 based on the number of points — A1 being the lowest to D3 being the highest.
Some ways to gain points include:
- There are current tenants farming the land
- Close crop delivery point (more or less than 50 miles away?)
- Planned direct operations — funds applied to working capital for daily operations
- Direct access to maintained roadway
- Known water access or flooding issues
- Low loan to value ratio
- Less than 10% of total offering value contributed to asset improvement
- Number of land sales with a 100 mile radius in the past year
- Non-core farming assets not (or a small) part of the valuation
AcreTrader vs. FarmTogether
How to Sign Up for Acre Trader
Opening an account is simple with AcreTrader. Remember though, you need to be an accredited investor to use the platform.
First, head to AcreTrader’s website and enter your name, email address and a password you’ll use to access the platform.
Then you need to declare your accreditation status. Once you do so, you'll have an account and need to complete the rest of our profile — this includes your address and last four digits of your Social Security number.
You’ll also need to enter your bank details to fund your investments and to prove you’re an accredited investor.
Don’t worry, your bank information won’t be kept on AcreTrader’s website.
Instead, it uses a third-party provider called Plaid to accept your banking information and North Capital Investment Technology to house your accreditation documents.
You’ll need to sign these documents electronically and then fund your investments using ACH transfers.
Even if you make an investment, it isn’t final until the minimum target for a specific investment is met.
You could wait anywhere from 30 to 90 days since that’s how long a property will be offered for. If it’s fully funded then you have an investment.
If not, the listing will be removed and any funds will be returned to you.
Should You Invest With Acretrader?
Right now, AcreTrader is only available for accredited investors which limits on who can trade with the platform. If you are one and are interested in dabbling in a new type of investment income, investing in farmland could be for you.
First, it could help you create positive cash flow by investing in hard assets. Investing in farmland isn’t part of the financial markets, so it could be a great type of alternative investment — it has the potential to experience higher gains.
Plus, you can get some diversification — there’s no volatility, farmland doesn’t use leverage and there may be the potential to hedge inflation.
Since this is considered a type of real estate investment, it’s for those interested in putting money somewhere long-term.
The potential for wealth building is there since the demand for food will rise as the population increases, therefore raising the value of farmland.
However, since you are investing, there is also the potential to lose money too, which is why it’s important to do your due diligence.
Since AcreTrader is a relatively new venture, you may want to hold off for the company to build its reputation if you’re a more cautious investor.
Other drawbacks include the fact that your investment will be illiquid and returns could be smaller in the short-term, depending on how current politics play out for farmers or if there isn’t anyone to work the land.
Don’t forget the 0.75% annual fee which could impact your returns.
If you are an accredited investor and want to try something completely new, AcreTrader may be worth it.
Although, you might want to wait for them to build up a track record.
Still, it doesn’t cost you anything other than a few minutes of your time to check out AcreTrader. Take a look at what there is to offer and decide for yourself if you think it’s worth it.
- Editor Rating
- Rated 4.5 stars
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