What Is The AcreTrader Minimum Investment?

AcreTrader is a newer crowdfunded investment platform letting people buy shares in farmland. Founders unveiled it in 2018 and have been making speedy progress ever since. Additionally, there are plans in place for major growth as new projects pop up this year.

There are two major points that make this an attractive investment:

• It uses the system of crowdfunding. Crowdfunding is a way for people to buy into projects that would typically be out of their reach financially. Crowdfunding lets more people invest smaller sums of money in real estate projects. These projects are usually promoted through social media, and have seen a upward shift in popularity and success over the last few years.
• Investing in farmland is a smart move. As an asset class, farmland has a healthy rate of return compared to other types of real estate or the stock market. As the world population keeps growing, there’s more demand for farms to produce crops.  This makes farmland an excellent long-term investment, generating reliable returns in the long run for stakeholders. And also keep in mind, farmland isn’t as dependent on stock market ups and downs compared to other investments, because land is a tangible or “hard” asset. 

Is There A Minimum To Invest On AcreTrader?

The minimum investment amount will vary for each individual project.

For example, the three most recently closed deals were:

• A corn and soybean farm in Ill that carried a $21,690 minimum
• Pecan farm in GA requiring $36,800
• Corn and soybeans in IN with a min of $21, 575

These are on the high side as they are fairly large projects.

Depending on the total size of the project, price per acre and a few other factors, most offerings require a minimum initial investment of $10,000 to $25,000. This minimum investment will usually be the equivalent of one to four acres. This is based on the fact that most farmland sells for $3,000 to $10,000 per acre.

According to data on AcreTrader’s site, minimum investments range on average from $10,000 to $25,000. To date, they have closed on 8 farming sites.

How Will I Make Money On My Investment?

The annual average investment returns on AcreTrader projects are between 9% and 11%, which is considered a healthy rate of return when compared to other real estate investments.

Investors can expect to see profits in two ways:

• Earning income paid in rent by the farmers who use the land
• Seeing a jump in the value of the farmland over time and when it is eventually sold

Depending on the structure of the deal, there may also be potential for investors to profit from proceeds from the yearly harvest.

Open To Accredited Investors Only

At this time, you must be an accredited investor in order to buy into AcreTrader projects at any minimum level.

These investors meet extremely strict requirements that let them buy into projects that smaller investors could not afford.

Criteria to be accredited include:

• Earned income of more than $200,000 (or $300,000 together with a spouse) in each of the last two years
• Reasonably expect to earn the same for the current year
• Or, have a net worth of more than $1 million, either individually or together with a spouse. This excludes the value of a primary residence

As you can see, this really limits who is allowed to invest in AcreTrader projects, but these restrictions are due to strict regulations from the SEC to protect smaller investors. It is possible that over time this will change as the platform becomes more established.

Conclusion

Investing in real estate is a solid choice, and farmland in particular is a wise option. There will be upcoming projects that require a smaller initial minimum investment, so keep an eye out and consider joining the AcreTrader email list for the latest updates.

Also remember that helping support farmers plays an integral in the well-being of the country. Farmers grow much-needed crops for families, and that need is going to expand over time.

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