Putting your money into real estate is one of the smartest moves you can make as an investor.
Properties are likely to rise in value and will generate income from renters. Most real estate deals are passive investments. This means you can just sit back and let other people – from construction companies to property managers – take care of the daily operations.
When you think of real estate deals, you probably think of new or renovated apartment buildings, homes in upcoming areas, or office complexes.
But AcreTrader offers an asset that’s entirely new and remarkable: the opportunity to invest in farmland.
Here's how AcreTrader works for complete beginners. For those just getting started, consider reading our full AcreTrader review.
For starters, you can feel good about yourself when you put money into American farms. Farms form the foundation of the country; part of its rich heritage and also a vital part of its future.
As an asset class, farmland has a fantastic rate of growth in value compared to other properties. Think about it: the world population keeps growing, creating more demand for farms to produce crops. This makes farmland an excellent long-term investment, generating reliable returns in the long run for stakeholders.
Finally, farmland isn’t as dependent on stock market fluctuations compared to other investments, because land is a tangible or “hard” asset.
AcreTrader is a crowdfunded investment platform letting people buy shares in farmland.
Crowdfunding is a fairly new avenue for people to buy into projects that would typically be out of their reach. Traditionally, real estate deals were designed for wealthy people with deep pockets. Realty experts would find a small group of investors to pitch in large amounts of money.
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 dramatic rise in popularity and success over the last few years.
AcreTrader, founded in Arkansas, emerged on the crowdfunding scene just two years ago. Its creators have substantial knowledge and experience in farmland. This expertise includes managing finances to cover expenses to day-to-day operations. But it doesn’t end there. They have a thorough understanding of how to run everything from smaller family farms to large commercial sites.
In other words, they are not just financial gurus. They’ve been immersed in the vast amount of work that goes into productive farming. They are familiar with everything from heavy equipment to types of soil to crop sustainability.
Since its inception in 2018, AcreTrader has closed deals on a total of six farms.
This depends on the dollar amount of your investment. According to AcreTrader’s site, minimum investments range from $5,000 to $50,000.
The annual average investment returns are between 9% and 11%, which is considered excellent when compared to other real estate investments.
Investors can aim to see profits in two ways:
In return, AcreTrader will charge all investors an annual property management fee ranging from 0.75% to 1% per year, based on the scope of the project.
Keep in mind that you should consider farmland investing a long-term deal. It could, and will likely, take five or more years to be completed. You cannot rely on this type of real estate investment if you’re looking for a steady monthly income stream.
At this time, in order to buy into AcreTrader projects, you must be an accredited investor.
These investors meet strict requirements that let them buy into projects the general public could not afford.
Criteria to be accredited include:
Clearly, this greatly limits who is allowed to invest in AcreTrader projects, but this could change at any time.
If you ARE accredited, check out our guide on the best crowdfunding platforms for accredited investors.
If you ARE NOT accredited, here's the best real estate platforms for non-accredited investors.
AcreTrader is a stellar example of the exciting possibilities of crowdfunding. It offers a truly unique property asset with huge potential to grow in value. You can feel good about yourself because you are supporting the work of farmers.
However, since it is only open to accredited investors at this time, it is out of reach for the vast majority of people.
Stay tuned for any updates about qualifying to buy into AcreTrader projects.
