I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.
These nine farmland REITs have excellent portfolios and are likely to have great returns in 2023.
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Primary Rating:
4.5
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Primary Rating:
4.0
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Minimum investment:
$5,000 to $10,000 depending on project
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Minimum investment:
$15,000
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Fees:
0.75% annual servicing fee
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Fees:
no fees
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Are you interested in diversifying your portfolio to include farmland investments, but (like most people) can’t afford to purchase hundreds of acres of land?
Farmland real estate investment trusts (REITs) may be suitable for you. REITs are companies that own and manage multiple properties for profit, and farmland REITs focus on agricultural land.
These properties are remarkably stable because government backing and agricultural subsidies protect farmers from losses.
Check out nine of the best farmland REITs here.
Top 9 Best Farmland REITs to Invest in 2023
- AcreTrader – Best Overall
- FarmTogether – Best crowdfunding platform
- Harvest Returns – Best farming crowdfunding platform
- FarmFundr – Best agriculture crowdfunding platform
- Steward – Best regenerative agriculture
- Gladstone Land Corp – Best farm REIT
- Iroquois Valley Farmland REIT – Best agriculture REIT
- Farmland Partners – Best farmland REIT stock
- Invesco DB Agriculture Fund – Best farmland REIT ETF
Methodology
For all types of REITs, we considered the diversity of crop types, land locations, the type of farm operations they have in their portfolio and other assets under their management.
We also looked at the dividend yield, past distributions to investors and expense ratios.
AcreTrader – Best Overall
AcreTrader is a platform that allows users to invest in agricultural real estate through its website. AcreTrader has a large network of sources that includes farmers, website visitors, real estate brokers, land funds, land managers, and industry contacts.
AcreTrader has a comprehensive farm review process and only accepts a very small percentage of the land parcels they examine.
Investors generate income from cash rent the farmer pays to plant the acreage each year and appreciation of the land over time, which is realized upon the sale of the farm.
Farmers choose to work with AcreTrader for a variety of reasons. AcreTrader allows farmers to scale their businesses through innovative sales and leasing opportunities.
AcreTrader’s model helps farmers by taking out a lot of the pain of raising capital to develop a new property or expand their operation.
Carter Malloy founded AcreTrader in 2018, intending to allow regular, everyday investors to enter the previously elite-only market of farmland investment.
Investment Offerings: AcreTrader has many investment options for accredited investors. Unlike most REITs, investors can choose which projects they want to participate in, allowing you as many options as there are farmers investing in AcreTrader.
Fees: AcreTrader charge a standard 0.75% annual servicing fee.
From the founder
Education is everything when it comes to investing, especially in an asset class that’s new to you.
I’d encourage anyone interested in investing in farmland to do their research and learn everything they can about it.
Carter Malloy, Founder & CEO at AcreTrader
Diversify your portfolio while supporting a farmer. Invest with AcreTrader, in minutes.
FarmTogether – Best Crowdfunding Platform
Artem Milinchuk founded FarmTogether in 2017. Since its inception, the company has had more than 1,500 clients and has made deals with more than 30 properties.
With more than $160 million in assets, FarmTogether is a large company, especially for the time it’s been running.
FarmTogether has many investment options in California, Oregon and more. Many of these farms grow specialty crops, such as wine grapes and citrus fruits.
Investment Offerings: FarmTogether has three primary investment options: Crowdfunding Offerings, the Sustainable Farmland Fund and Sole Ownership Bespoke Offerings.
Crowdfunding Offerings: Crowdfunding Offerings are available to accredited investors for a minimum investment of $15,000. With this, you can choose which farm option you want to invest in.
After you put in your initial investment, you must wait and collect monthly dividends. Once FarmTogether sells the land after the target hold time or farmland prices have gone up, you can get your initial investment back and receive your share of the capital gains.
Sustainable Farmland Fund: The Sustainable Farmland Fund has a larger minimum investment of $100,000 but offers diversification with multiple crop types.
This fund operates more like a traditional REIT investment. If you invest in the Sustainable Farmland Fund option, you put money in, and FarmTogether will choose which kinds of crops and regions to invest in.
Sole Bespoke Offerings: A Sole Bespoke Offering is the highest level of investment FarmTogether offers, in which the company will work with you one-on-one to purchase your own investment farm that fits your criteria.
The minimum investment for this offering is at least $1 million (but can be up to $3 million).
Fees: Fees for individual investments and farms can vary but are usually less than two percent. There are origination fees and annual fees.
FarmTogether enables accredited investors and institutions to invest directly in high-quality farmland assets vetted by rigorous, institutional due diligence and active asset management.
Harvest Returns – Best Farming Crowdfunding Platform
Founded in 2016, Harvest Returns is a crowdfunding platform that connects investors to farmers in need of funding. So far, the platform has distributed more than $6 million to 43 farms and ranches.
Harvest Returns is unique because it funds unique types of agriculture, such as timber and indoor agriculture.
Investment Offerings: If you sign up to Harvest Returns, you can invest in several farms looking for support. Each farm has its own policies, fees and term lengths.
Each project has a select number of seats available for non-accredited investors, making this one of the most accessible forms of farmland investment.
Fees: The farms or recipients of funding pay the majority of fees on Harvest Returns, but some individual fees may apply to the investor, depending on the project.
From the founder
Before making any investment, it is critical to understand the investment structure, and farming is no different.
There are different risks associated with investing directly into a piece of farmland, a publicly-traded REIT, or an individual agriculture operating company. The durations and risks of each of these are different.
Chris Rawley, Founder & CEO at Harvest Returns
FarmFundr – Best Agriculture Crowdfunding Platform
Brandon Silveira founded FarmFundr in 2015. The company connects investors with farm owners that need funding to purchase additional land.
For each project, FarmFundr creates a limited liability company (LLC). When you invest in a farm project, you become a partial owner of that LLC.
FarmFundr will monitor and track the farm you are invested in and will deal with all the management, including the distribution of funds.
Investment Offerings: FarmFundr typically has a few projects running at once. You will need to become a FarmFundr member to see which projects it is gathering investors for at any time.
Each investment option will have different yields, minimum investment lengths and minimum initial investments.
Fee: Investors do not pay fees to FarmFundr; instead, FarmFundr makes its money by collecting fees from farms and farmers.
Steward – Best for Regenerative Agriculture
Steward is an agricultural lending platform focusing on regenerative farming and sustainability. Using its platform, borrowers can ask for money to help support farms as they transition toward better, more sustainable practices.
Investment Offerings: Steward hosts a multitude of individual lending campaigns, and investors can choose which project they want to support.
After selecting a project, you must put down a minimum loan of $100. Investors will repay the loan over an agreed period, with a five percent interest rate to lenders.
Fees: Lenders on Steward pay no fees. Farmers and borrowers must pay a three percent loan origination fee.
Gladstone Land Corp (LAND) – Best Farm REIT
Gladstone Land Corporation (NASDAQ: LAND) is a traditional REIT focusing on agriculture. Gladstone owns lots of U.S. farmland in multiple states, including Texas, California and Colorado.
Gladstone has historically high investment returns and an annual dividend yield of about 2.5 percent.
Investment Offerings: Gladstone is a traded stock, meaning that anyone can buy into the company through the stock market.
Fees: There are no fees for buying and trading stock (unless you pay your stockbroker). You will have to pay capital gains tax on any profit you receive from investments.
Iroquois Valley Farmland REIT (LAND) – Best Agriculture REIT
Iroquois Valley is a certified B Corp aiming to provide organic and regenerative farmers with land security through leases and mortgages.
With an Iroquois Valley REIT, you will not be able to choose which properties you invest in. While this gives you less control, it also makes this REIT more passive than other options.
Iroquois Valley is a non-traded REIT with a four-year minimum hold period and a minimum investment of $10,220.
Investment Offerings: Iroquois Valley has one REIT in which you may purchase equity. You will receive dividends and a return on your investment after the five-year hold period.
Fees: Investors pay no fees. Iroquois Valley makes money through its investments before they pay investors and the fees they charge to borrowers.
Farmland Partners (FPI) – Best Farmland REIT Stock
Farmland Partners Inc. (NYSE: FPI) is a publicly traded REIT that buys, manages and leases farmland throughout North America.
It has a highly diverse portfolio containing high-quality land that is resilient and high producing.
FPI has an annual dividend yield of 1.71 percent, suggesting a high degree of reinvestment.
Investment Offerings: You can buy and sell FPI stock like any other stock. You can collect dividends as cash or reinvest them.
Fees: There are no fees for buying and selling stock (unless you have a broker buy for you). Farmland Partners Inc. makes money through land profits it collects before paying back investors.
Invesco DB Agriculture Fund (DBA) – Best Farmland REIT ETF
Invesco DB Agriculture Fund (NYSE: DBA) is a publicly traded agricultural exchange-traded fund (ETF). It has a highly diversified portfolio with stock in agricultural land worldwide.
Unlike REITs, farmland ETF REITs do not pay dividends, but you can sell after the stock price has increased.
Invesco DB invests in various crops, including sugar, coffee and soybeans. Such a broad portfolio protects the stock from potential stock exchange dips.
Investment Offerings: You can buy and sell DBA stock like any other stock. Invesco DB makes money through investments and profits not distributed back to investors.
Fees: There are no fees for buying and selling stock (unless you have a broker buy for you).
What Are Farmland REITs?
There are two main types of farmland REITs:
- Equity REITs, which gain capital by charging rents or leasing land.
- Debt REITs, which earn capital by charging interest to those buying land from them.
Benefits of Farmland REITs
Farmland REITs have unique benefits that aren’t available in other asset classes.
Hedge against inflation – Necessary commodities usually increase in price with inflation before other products.
Food demand does not drop, even if prices go up, and food prices have historically risen with inflation rates.
Diversification – With non-REITs, you can usually invest in only one piece of land. With a REIT, you can invest in multiple crop types at once, giving you extra security and mitigating many risks if a particular crop type has a bad season.
Consistent cash flow – REITs must pay investors dividends, which means you don’t have to wait to sell your equity to get cash back from your investment.
You can also collect cash flow through interest paid by borrowers.
Attractive returns – Compared to other investment options, farmland investments have had some of the highest returns.
While historical trends do not guarantee future returns, farmland has always been a stable, reliable, high-return investment.
Passive investments – After you put money into a REIT, it requires very little additional work on your part.
You can simply put money in, collect dividends and wait for the holding period for your investment to be up.
Risks of Investing in Farmland REITs
Here are the main risks of investing in farmland REITs.
Bad farm management – Poor farm management can cause farms to go under quickly. While retail investments can make quick turnarounds to adjust to issues, farmers often have to wait for the next year to adjust crop plating or implement other changes.
Natural disasters – No amount of due diligence will protect your investment if a natural disaster happens.
From poor growing seasons to tornados, there is always the chance you will lose your investment because of something entirely out of your control.
Higher taxes on gains – You will have to pay capital gains tax on the money you make from REIT investments.
Crop prices – There is always the risk of crop prices falling. A particularly good growing year should be positive for the farms you’re invested in, but other farms will also likely have a good growing year, resulting in prices dropping during high-yield periods.
How to Pick The Right Farmland REIT
When choosing the right kind of REIT to invest in, consider the following:
- Cash flow: Do you need an option that pays dividends for cash flow?
- Liquidity: If you need to sell soon, choose a traded REIT.
- Passivity: How much do you want to be involved in choosing land and investments?
- Rate of return: If you want a long-term investment, choose a non-traded REIT. If you need the money back fast, choose a traded REIT.
Which Farmland REIT is Best For You?
All of the REITs on this list are solid investments, but the best for you depends on many personal factors.
Consider the kind of farms you want to invest in, the annual return you’re looking for and how long you can have your money invested.
Farmland REIT FAQs
These are the most commonly asked questions about farmland REITs.
Are farmland REITs a good investment?
Yes, farmland REITs are good investments because they have historically had above-average returns.
How do farmland REITs work?
Farmland REITs acquire land and then lease it to farmers.
What is the average return for a farmland REIT?
In the 20 years between 2002 and 2022, farmland REITs had average returns of about 12 percent.
Diversify your portfolio while supporting a farmer. Invest with AcreTrader, in minutes.
I'm Donny. I'm a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.
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