![\"acretrader](\"https:\/\/www.wallstreetzen.com\/blog\/wp-content\/uploads\/2022\/10\/acretrader-review-farmland-vs-stocks.png\")
<\/a><\/figure><\/div>\n\n\nAdditionally, supply is only decreasing, which protects from recessionary and inflationary risks. <\/p>\n\n\n\n
Given the current levels of global economic volatility, an investment in farmland makes even more sense than usual.<\/p>\n\n\n\n
But farmland has traditionally been quite difficult to invest in. <\/p>\n\n\n\n
Over 86% of farmland is owned by families who are typically reluctant to sell. If they do sell, it\u2019s often in large plots which prevents many investors from gaining exposure.<\/p>\n\n\n\n
However, advances in alternative investment vehicles have democratized the market and made it accessible to a much larger audience. <\/p>\n\n\n\n
AcreTrader is a modern investment platform that allows you to easily purchase farmland and profit through appreciation of the land itself and from rental income. <\/p>\n\n\n\n
In this AcreTrader review, I\u2019m going to investigate the advantages and disadvantages of AcreTrader<\/a>, and provide a general overview of the platform, the pricing, and how it works. <\/p>\n\n\n The Bottom Line<\/strong>: If you\u2019re an accredited investor<\/u> and interested in owning farmland, AcreTrader<\/a> is an excellent vehicle. AcreTrader only accepts about 5% of the land that it reviews, so investors can be confident in a rigorous due diligence process. <\/p>\n\n\n\n AcreTrader<\/a> is also a great investment platform for accredited investors because of its low fees, streamlined interface, and ease of investment. <\/p>\n\n\n\n Accessibility<\/strong>: 3.5\/5<\/p>\n\n\n\n Due Diligence Process\/Analysis<\/strong>: 5\/5<\/p>\n\n\n\n AcreTrader<\/a> accepts less than 5% of the parcels it reviews. The farm and title are placed into a Limited Liability Company (usually). The distinct legal entity establishes a contract with the owner and offers time to complete due diligence and other legal work. The time period for this due diligence is 30-90 days. <\/p>\n\n\n\n Price<\/strong>: 5\/5 (Fees are very low at 0.75% annually for administration. In other investment areas, these fees can range from 1% – 2.5%.)<\/p>\n\n\n\n Keep reading for all of the details to backup my conclusion in the rest of this AcreTrader review.<\/p>\n\n\n\n AcreTrader<\/a> is a farmland investing platform based in Fayetteville, Arkansas. It has been in operation since 2018. <\/p>\n\n\n\n AcreTrader<\/a> makes it easy to invest in farmland. Each property is subdivided into smaller, more affordable segments. Plus, the due diligence process is completed by the intermediary platform for a small fee. <\/p>\n\n\n\n Since 2018, the platform has grown considerably and has clients across all 50 states. It has an excellent reputation among both investors and farmers. <\/p>\n\n\n\n For farmers, AcreTrader<\/a> provides the capital needed to improve the land and to make other purchases for their farms. The platform also assists farmers to transition from conventional to organic crop produce, a move which is aligned with investors and wider market preferences.<\/p>\n\n\n\n For investors, AcreTrader<\/a> creates an affordable and simplified way to invest in farmland.<\/p>\n\n\n\n The benefits of investing in farmland are well established: Good annual returns, low volatility of returns, and the potential to act as a hedge during inflationary markets.<\/p>\n\n\n\n Traditionally, there are 2 primary barriers to investing in farmland:<\/p>\n\n\n\n Farms are usually sold all at once, requiring significant funds to complete the transaction.<\/p>\n\n\n\n Farmland is a highly-nuanced asset class. It\u2019s difficult to assign proper value to pieces of land and even harder to do so across multiple counties and states.<\/p>\n\n\n\n AcreTrader<\/a> renders these issues obsolete.<\/p>\n\n\n\n By subdividing and pooling investors capital, investors can make farmland investments with just $10,000. <\/p>\n\n\n\n And with their in-house team of investment professionals, AcreTrader can assign proper valuations to different pieces of land all over the country.<\/p>\n\n\n\n In this way, AcreTrader operates similarly to an insurance company – pooling capital, spreading risk, and using statistics to its advantage.<\/p>\n\n\n\n Farmland has proven to be a lucrative field (pardon the pun).<\/p>\n\n\n\n AcreTrader expects between 3%-5%<\/a> unlevered yield for low-risk properties. However, the cumulative rate of returns, on a long time horizon, look even better. <\/p>\n\n\n\n According to AcreTrader<\/a>, the cumulative rate of returns for farmland has been 12.24% since the year 2000. A $10,000 investment in farmland in the year 2000 would currently be valued at ~$96,149.<\/p>\n\n\n\n Farmland returns are made up of two components: Land appreciation and capitalization rates (similar to rental income).<\/p>\n\n\n\n Total farmland returns have been positive every year since 1990:<\/p>\n\n\n Keep in mind that investing in farmland via shares is not exactly the same as investing in farmland directly, in terms of calculated returns. <\/p>\n\n\n\n These are the 3 primary advantages of investing in farmland with AcreTrader<\/a>:<\/p>\n\n\n\n AcreTrader only accepts ~5% of all the land parcels they review. The acres are packaged into an LLC for ease of investment, with a minimum of ~$10,000. <\/p>\n\n\n\n The farmland does not have to be managed. You only own shares. AcreTrader takes care of accounting, insurance, and working with farmers regarding soil sustainability and ecological practices. <\/p>\n\n\n\n With an annual fee of only 0.75%, it really is one of the best kinds of farm investing. <\/p>\n\n\n\n There are two primary issues associated with investing with AcreTrader (although neither are specific to AcreTrader but issues of investing in farmland in general): <\/p>\n\n\n\n To be an accredited investor<\/a>, you need to either:<\/p>\n\n\n\n This can eliminate large segments of the market considerably, and rules out novice investors who are interested in smaller investments.<\/p>\n\n\n\n The minimum investment is about $10,000, which will again rule out those investors of a lower net worth who cannot afford this amount. <\/p>\n\n\n\n If you’re not an accredited investor, check out our Vinovest review<\/a> \u2014 you can invest in fine wine with only $1000.<\/p>\n\n\n\n Many of the land parcels have minimum holding periods of 5 to 10 years. Be sure to review the minimum holding period before making an investment.<\/p>\n\n\n ![\"acretrader](\"https:\/\/www.wallstreetzen.com\/blog\/wp-content\/uploads\/2022\/10\/acretrader-homepage.png\")
<\/a><\/figure><\/div>\n\n\nIs AcreTrader the Best Way to Invest in Farmland?<\/strong><\/h2>\n\n\n\n
Pros<\/strong><\/h3>\n\n\n\n
Cons<\/strong><\/h3>\n\n\n\n
What is AcreTrader?<\/strong><\/h2>\n\n\n\n
Investing in Farmland<\/strong><\/h2>\n\n\n\n
1. Capital requirements<\/h4>\n\n\n\n
2. Due diligence<\/h4>\n\n\n\n
Rate of Returns with AcreTrader<\/strong><\/h2>\n\n\n\n
![\"farmland](\"https:\/\/www.wallstreetzen.com\/blog\/wp-content\/uploads\/2022\/10\/farmland-returns.png\")
<\/a><\/figure><\/div>\n\n\nAdvantages of Using AcreTrader<\/strong><\/h2>\n\n\n\n
1. You get access to high-quality farmland.<\/strong><\/h4>\n\n\n\n
2. There is nothing you have to do as an investor.<\/strong><\/h4>\n\n\n\n
3. Low fees.<\/strong><\/h4>\n\n\n\n
Disadvantages of Using AcreTrader<\/strong><\/h2>\n\n\n\n
1. You need to be an accredited investor in order to invest.<\/h4>\n\n\n\n
2. Farmland is an illiquid investment<\/h4>\n\n\n\n