Farmland investing through platforms like AcreTrader and FarmTogether lets accredited investors own fractional shares of agricultural real estate with minimum investments of $10,000 to $15,000. Both platforms offer passive income through annual cash distributions averaging 3-6% plus potential land appreciation, with holding periods of 5-10 years making farmland a long-term alternative asset investment.
Quick Facts: AcreTrader vs FarmTogether
| Feature | AcreTrader | FarmTogether |
|---|---|---|
| Founded | 2018 | 2017 |
| Headquarters | Fayetteville, Arkansas | San Francisco, California |
| Minimum Investment | $10,000-$25,000 per offering | $15,000 per offering |
| Target Annual Returns | 8-12% total | 7-13% total |
| Cash Yield | 3-5% annually | 3-9% annually |
| Annual Fees | 0.75% servicing fee | 1.0-1.5% management fee |
| Holding Period | 5-10 years typical | 5-12 years typical |
| New Offerings | 1-2 per week | 1 per month |
| Crop Focus | Row crops, timberland, permanent crops | Permanent crops, row crops |
| Fund Options | No | Yes (Sustainable Farmland Fund) |
| Accredited Investor Required | Yes | Yes |
Why Farmland Became a $3 Trillion Alternative Asset Class
Farmland represents one of the oldest and most stable investment classes in human history. Unlike stocks that can crash 40% in weeks or real estate markets that boom and bust cyclically, farmland values have increased steadily over decades with remarkably low volatility.
U.S. farmland returned approximately 11% annually over the past 30 years when combining crop income and land appreciation. During the 2008 financial crisis, farmland values barely dipped while the S&P 500 crashed 37%. During 2022’s market turmoil when stocks fell 18%, farmland values increased 12%.
Three fundamental factors drive farmland’s strong performance:
Limited Supply: We’re not making new farmland. Total U.S. farmland declined from 1.2 billion acres in 1950 to 896 million acres today. Urban expansion, development, and environmental conservation continue reducing agricultural acreage. This supply constraint creates natural scarcity value.
Growing Demand: Global population reached 8 billion people and continues rising. More mouths require more food production. Rising incomes in developing nations increase demand for meat, dairy, and resource-intensive crops. China alone imports over 100 million tons of soybeans annually.
Inflation Hedge: Food prices rise with inflation. When your groceries cost 7% more this year, farmers growing those groceries benefit from higher crop values. Farmland provides a natural inflation hedge that stocks and bonds can’t match.
These tailwinds make farmland attractive for portfolio diversification. The problem? Traditional farmland investment requires $500,000 to $5 million to purchase decent acreage outright. You need farming knowledge, equipment, and management skills. Most investors lack the capital, expertise, and time.
AcreTrader and FarmTogether solve this problem through crowdfunding platforms that let you own fractional shares of institutional-quality farmland for $10,000 to $15,000 minimum investments.
How Farmland Crowdfunding Actually Works
Both platforms follow similar operational models with minor variations:
Step 1: Farm Acquisition Platform teams identify farmland meeting their investment criteria. They evaluate soil quality, water rights, crop history, location, and potential returns. AcreTrader reviews over 1,000 farms annually and accepts roughly 3% to their platform. FarmTogether follows similarly rigorous vetting.
Step 2: Legal Structure The platform purchases the farmland and creates a Limited Liability Company (LLC) for each property. Investors buy shares in the LLC, not direct farmland ownership. Each share represents fractional ownership of the underlying farm.
Step 3: Farmer Partnership The platform leases the land to experienced farmers through multi-year lease agreements. Farmers pay annual or periodic rent. The platform handles all lease negotiations, compliance, and farmer relationships. You never interact with farmers directly.
Step 4: Property Management The platform manages property taxes, insurance, legal compliance, and land improvements. AcreTrader and FarmTogether both employ property management teams handling day-to-day operations. You receive quarterly or annual updates on your investment.
Step 5: Income Distribution Lease payments get distributed to investors quarterly, semi-annually, or annually depending on the specific offering. Most distributions happen annually. Income shows up as qualified dividends or partnership distributions in your investment account.
Step 6: Exit Through Sale After the 5-12 year holding period, the platform sells the farmland. Sale proceeds get distributed to investors based on their ownership percentage. You receive both your original investment back (assuming values held or increased) plus any appreciation.
This structure provides completely passive farmland exposure. You never visit the farm, negotiate with tenants, maintain equipment, or handle any operational aspects.
AcreTrader: The Farmland Investing Pioneer
AcreTrader launched in 2018, founded by Carter Malloy who comes from a multi-generational farming family. The Arkansas-based company emphasizes row crops (corn, soybeans, wheat, cotton) and recently expanded into timberland investments.
Investment Focus: AcreTrader concentrates on productive row crop farmland in America’s agricultural heartland. You’ll find offerings in Iowa, Illinois, Nebraska, Missouri, Arkansas, and Mississippi. These regions produce the bulk of U.S. commodity crops with established infrastructure and experienced farmer pools.
The platform added timberland investments in 2022, offering exposure to forests harvested for lumber. Timberland provides diversification from annual crops with longer harvest cycles (10-30 years) but similar appreciation potential.
Deal Flow: AcreTrader lists 1-2 new investments weekly, giving investors consistent opportunities. Since launch, they’ve offered over 500 individual farmland and timberland investments totaling over $1 billion in assets under management.
Many offerings fill quickly, sometimes within hours of listing. Popular farms might receive 10x oversubscription. You need to act fast when attractive investments appear.
Minimum Investment: Minimums range from $10,000 to $25,000 depending on the specific farm. Most offerings hover around $15,000. You can’t invest smaller amounts than the stated minimum for each property.
Returns and Cash Flow: AcreTrader targets 8-12% total annual returns combining cash distributions and land appreciation. Cash yields range from 3-5% annually paid to investors. The remaining returns come from farmland value appreciation over the holding period.
Historical performance shows net returns averaging 10.3% annually across all AcreTrader offerings. Individual farm performance varies significantly based on commodity prices, weather, and local market conditions.
Fee Structure: AcreTrader charges a flat 0.75% annual servicing fee on your investment value. A $15,000 investment costs $112.50 annually in fees. This fee covers property management, farmer oversight, insurance, taxes, and administrative costs.
There’s typically a one-time 2% origination fee at purchase covering due diligence, legal structuring, and acquisition costs. On a $15,000 investment, that’s $300 upfront.
FarmTogether: The Sustainable Agriculture Specialist
FarmTogether started in 2017 in San Francisco, founded by agricultural finance experts. The platform emphasizes sustainable farming practices and permanent crops (orchards, vineyards, nuts) alongside traditional row crops.
Investment Focus: FarmTogether specializes in high-value permanent crop farmland growing almonds, walnuts, pistachios, wine grapes, and citrus. California’s Central Valley dominates their offerings, though they include properties across Western states.
Permanent crops require larger upfront investment (planting trees takes years to produce) but generate higher revenue per acre than row crops once mature. A mature almond orchard generates $3,000 to $5,000 per acre annually compared to $200-400 per acre for corn.
Deal Flow: FarmTogether lists approximately one new investment monthly. Their more selective approach means fewer opportunities but potentially higher-quality offerings. Since 2017, they’ve facilitated over $200 million in farmland investments.
The slower deal pace means less competition for shares. Offerings typically stay open for weeks rather than hours.
Minimum Investment: Individual crowdfunded offerings require $15,000 minimum investment. The Sustainable Farmland Fund requires $100,000 minimum, making it accessible only to wealthier accredited investors.
Bespoke programs for sole ownership start at $3 million. These options suit ultra-high-net-worth individuals wanting direct control over specific properties.
Returns and Cash Flow: FarmTogether projects 7-13% total annual returns. Cash yields range from 3-9% annually, higher than AcreTrader due to permanent crops’ superior per-acre profitability.
The Sustainable Farmland Fund targets 8-10% net annual returns with 4-6% annual cash distributions. The fund structure provides instant diversification across multiple properties.
Fee Structure: Management fees vary by investment. Individual offerings charge 1.0-1.5% annually. One recent offering charged $215,000 upfront structuring fee plus 1.5% ongoing management. These higher fees reflect the complexity of permanent crop management.
The Sustainable Farmland Fund charges more competitive fees around 1% annually with institutional-grade management.
Head-to-Head Comparison: Which Platform Wins Where
| Category | Winner | Reason |
|---|---|---|
| Lower Fees | AcreTrader | 0.75% vs. 1.0-1.5% annual fees |
| More Opportunities | AcreTrader | 50-100 annual offerings vs. 12 offerings |
| Higher Cash Yield | FarmTogether | 3-9% vs. 3-5% annual distributions |
| Diversification Options | FarmTogether | Offers fund structure plus individual deals |
| Crop Variety | AcreTrader | Row crops + timberland + permanent crops |
| Sustainability Focus | FarmTogether | Emphasizes carbon-negative farming |
| Lower Entry Barrier | AcreTrader | $10,000 minimum vs. $15,000 minimum |
| Permanent Crops | FarmTogether | Specializes in orchards and vineyards |
| Deal Accessibility | FarmTogether | Less competition, longer offering periods |
The Accredited Investor Requirement: Does It Exclude You?
Both platforms require accredited investor status due to SEC regulations governing private investment offerings. You must meet one of these criteria:
Income Test:
- Individual earning $200,000+ annually for past two years
- Married couple earning $300,000+ annually for past two years
- Reasonable expectation of reaching same income this year
Net Worth Test:
- Liquid net worth exceeding $1,000,000 (excluding primary residence)
Professional Credential Test:
- Hold Series 7, Series 65, or Series 82 license
- Are a “knowledgeable employee” of a private fund
Approximately 13% of U.S. households qualify as accredited investors. If you don’t meet these thresholds, neither platform accepts your investment.
Alternative options exist for non-accredited investors:
- Farmland REITs: Publicly traded farmland real estate investment trusts like Farmland Partners (FPI) or Gladstone Land (LAND) require no accreditation and have no minimum investment
- Alto IRA: Self-directed IRA platform letting you invest retirement funds in AcreTrader or FarmTogether once accredited
- Farm ETFs: Agricultural exchange-traded funds providing indirect farmland exposure
Tax Treatment of Farmland Investment Income
Farmland investments offer potential tax advantages over traditional stocks and bonds:
Cash Distributions: Annual lease payments typically qualify as ordinary income or partnership distributions. You’ll receive K-1 tax forms reporting your share of income, deductions, and credits.
Partnership structures let you deduct your proportionate share of property taxes, insurance, and operating expenses. These deductions offset some reported income, reducing your tax liability.
Depreciation Benefits: Farm buildings, equipment, and certain land improvements depreciate over time. Your K-1 will show depreciation deductions reducing taxable income. When you eventually sell, depreciation gets recaptured as ordinary income.
Capital Gains Treatment: When the platform sells the farmland after 5-10 years, profits qualify as long-term capital gains taxed at preferential 15-20% rates (versus 24-37% for ordinary income).
1031 Exchange Option: FarmTogether offers 1031 exchange programs letting you roll gains from one farm sale directly into another farmland purchase, deferring capital gains taxes indefinitely. AcreTrader doesn’t currently offer this option.
Estate Planning: Farmland held until death receives step-up in basis, potentially eliminating capital gains for heirs. This makes farmland attractive for multi-generational wealth transfer.
Consult tax professionals familiar with partnership taxation and agricultural investments before investing. Tax treatment varies based on individual circumstances.
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Liquidity: The Farmland Investing Catch
Both platforms emphasize that farmland investing is illiquid. You’re committing capital for 5-12 years minimum with no guaranteed exit before then.
AcreTrader Marketplace: AcreTrader operates a secondary marketplace where you can list your shares for sale to other investors. However, they provide zero liquidity guarantees. If no buyers exist for your shares, you’re stuck holding until the farm sells.
The marketplace sees limited activity. Most investors can’t sell their shares early even if they try. Plan to hold for the full investment term.
FarmTogether Secondary Market: FarmTogether announced plans to launch a secondary trading platform but hasn’t implemented it yet. Currently, no early exit option exists.
One-Year Minimum Holding: Both platforms require at least one-year holding periods before you can attempt selling through secondary markets. You’re completely locked in for the first 12 months.
Planning Considerations: Only invest money you won’t need for 10+ years. Treat farmland like retirement savings or college funds for young children. Don’t invest emergency funds or money you might need for home down payments, vehicle purchases, or other near-term expenses.
Risk Factors Both Platforms Share
Farmland investing carries risks despite historically strong performance:
Commodity Price Volatility: Corn, soybeans, wheat, and other crop prices fluctuate based on global supply, demand, weather, and geopolitical factors. Prolonged low commodity prices reduce farmer profitability, potentially forcing lease payment reductions or farmer defaults.
Weather and Climate Risk: Droughts, floods, hail, freezes, and other weather events damage crops and reduce yields. Climate change increases weather volatility, potentially affecting long-term farmland productivity.
Tenant Risk: Your returns depend entirely on farmers successfully operating the land and paying lease agreements. Farmer bankruptcy, poor management, or operational failures harm your investment.
Regulatory Changes: Agricultural subsidies, trade policies, environmental regulations, and water rights laws significantly impact farmland values and profitability. Policy changes could reduce returns or increase costs.
Illiquidity Risk: You cannot quickly sell farmland investments. Economic needs forcing early sales will likely result in losses or inability to exit positions entirely.
Geographic Concentration: Individual farm investments concentrate all capital in one property. Single-location disasters (localized flooding, soil contamination, eminent domain) could devastate returns.
Both platforms mitigate risks through rigorous farm selection, tenant screening, and property management. However, risk elimination is impossible in any investment.
The Sustainable Farmland Fund: FarmTogether’s Unique Advantage
FarmTogether’s $100,000 minimum Sustainable Farmland Fund provides instant diversification across multiple properties, regions, and crop types. This fund structure offers several advantages over individual farm investments:
Instant Diversification: Your $100,000 gets spread across 10-20 different farms rather than concentrated in one property. Geographic and crop diversification reduces single-farm risk significantly.
Professional Portfolio Management: Fund managers actively adjust holdings, selling underperforming properties and acquiring better opportunities. Individual farm investments lock you into that specific farm for the full term regardless of performance.
Shorter Minimum Holding: The fund’s structure allows quarterly redemption requests after a two-year minimum holding period. This provides more flexibility than 5-10 year individual farm commitments.
Consistent Income: Multiple properties with staggered harvest schedules create steadier cash flow than single-farm seasonal income.
Sustainability Focus: All fund properties implement carbon-negative farming practices, regenerative agriculture, and environmental stewardship. This aligns investments with ESG goals while potentially benefiting from emerging carbon credit markets.
The $100,000 minimum puts this option beyond most investors’ reach. However, it’s worth considering if you have the capital and value diversification over selecting individual farms.
Which Platform Fits Your Investment Goals
Your choice between AcreTrader and FarmTogether depends on several factors:
Choose AcreTrader if:
- You want lower fees (0.75% vs. 1.0-1.5%)
- You prefer more frequent investment opportunities (weekly vs. monthly)
- You’re interested in timberland alongside farmland
- You want the lowest possible minimum ($10,000 vs. $15,000)
- You value row crop exposure in traditional farming regions
- You prefer more competitive pricing from higher deal volume
Choose FarmTogether if:
- You’re interested in permanent crops (orchards, vineyards, nuts)
- You prioritize sustainable and regenerative agriculture
- You have $100,000+ to invest in their diversified fund
- You want potentially higher cash yields (3-9% vs. 3-5%)
- You prefer less competition securing shares in offerings
- You’re interested in 1031 exchange options
Consider both platforms if: You have $25,000-50,000 to invest across multiple farmland opportunities. Diversifying between both platforms provides exposure to different crops, regions, and management styles. One investment in each platform spreads risk while maintaining manageable position sizes.
Getting Started: The Application Process
Both platforms follow similar onboarding procedures:
Step 1: Create Account Sign up on the platform website providing basic contact information. This takes 5-10 minutes.
Step 2: Verify Accredited Status Submit documentation proving accredited investor status. Options include:
- Tax returns showing income above thresholds
- CPA letter verifying net worth
- Investment account statements demonstrating liquid assets
- Professional licenses (Series 7, 65, 82)
Verification takes 1-3 business days.
Step 3: Fund Account Link your bank account for ACH transfers or wire funds directly. Most investors use ACH for convenience despite 5-7 day transfer times.
Step 4: Review Offerings Browse available farm investments. Each listing includes detailed information:
- Property location and acreage
- Soil quality and water rights
- Historical crop yields and income
- Tenant farmer background
- Expected returns and holding period
- Risk factors specific to that farm
Step 5: Invest Select your desired investment amount (minimum $10,000-15,000) and commit funds. You’ll sign subscription documents electronically.
Step 6: Receive Ownership After the offering closes and the farm purchase completes, you receive LLC membership documents confirming your fractional ownership. This typically happens 30-90 days after committing funds.
The Future of Farmland Crowdfunding
Farmland crowdfunding remains a young industry with significant growth potential:
Institutional Interest Growing: Pension funds, endowments, and family offices are increasingly allocating capital to farmland. This institutional interest validates the asset class and provides future exit liquidity when platforms sell properties.
Technology Integration: Precision agriculture, AI-driven crop monitoring, and automated irrigation systems improve farm productivity and profitability. These technologies make farmland investments more attractive and reduce operational risks.
Climate-Related Opportunities: Carbon credit markets reward sustainable farming practices that sequester carbon. Farmland implementing regenerative agriculture can generate additional income streams beyond crop production.
Regulatory Evolution: Potential SEC rule changes might expand farmland crowdfunding access to non-accredited investors similar to Regulation A+ offerings. This would dramatically increase the investor pool and platform growth.
International Expansion: Both platforms currently focus on U.S. farmland. Future expansion into international markets (Australia, New Zealand, Eastern Europe, South America) could provide geographic diversification and growth opportunities.
Making Your Farmland Investment Decision
Farmland investing through AcreTrader or FarmTogether provides portfolio diversification, inflation protection, and passive income unavailable through traditional stocks and bonds. Both platforms offer quality farmland exposure with professional management.
Before investing:
- Ensure you meet accredited investor requirements
- Only invest money you won’t need for 10+ years
- Understand farmland investing risks including illiquidity and weather exposure
- Compare fees, crop types, and investment minimums between platforms
- Review your overall portfolio to determine appropriate farmland allocation (typically 5-15% of investable assets)
- Consult tax advisors about partnership taxation and K-1 forms
Neither platform is objectively better. AcreTrader excels at row crops and timberland with lower fees and more opportunities. FarmTogether specializes in permanent crops with potentially higher yields and sustainability focus.
Start with one $15,000 investment to experience farmland investing firsthand. After holding for 12-24 months and receiving your first annual distributions, you’ll better understand whether farmland fits your portfolio and which platform aligns with your preferences.
The best farmland investment strategy combines both platforms over time, building a diversified agricultural portfolio across multiple regions, crop types, and management styles. This approach captures the long-term wealth-building power of farmland while spreading risk across multiple properties and platforms.
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Do I need to be an accredited investor to use AcreTrader or FarmTogether?
Yes, both AcreTrader and FarmTogether require accredited investor status due to SEC regulations governing private investment offerings. You must earn $200,000+ annually as an individual ($300,000 as a couple) for the past two years, or have liquid net worth exceeding $1 million (excluding your primary residence). Approximately 13% of U.S. households qualify. If you don’t meet these requirements, consider publicly traded farmland REITs like Farmland Partners (FPI) or Gladstone Land (LAND) which have no accreditation requirements and no minimum investment. You could also invest through a self-directed IRA using Alto IRA once you meet accreditation thresholds.
Can I sell my farmland investment early if I need the money?
Early exits are difficult and not guaranteed on either platform. AcreTrader operates a secondary marketplace where you can list shares for sale after holding one year minimum, but they provide zero liquidity guarantees. If no buyers exist, you cannot sell. FarmTogether announced plans for a secondary market but hasn’t implemented it yet. In reality, most investors cannot exit early even when attempting secondary sales. Both platforms emphasize that farmland investments require 5-12 year holding commitments. Only invest money you definitely won’t need for at least 10 years. Treat farmland like retirement savings or long-term wealth building, not accessible emergency funds.
What kind of returns can I realistically expect from farmland investments?
Target total returns range from 8-13% annually combining cash distributions and land appreciation. AcreTrader targets 8-12% total returns with 3-5% cash yields paid annually. FarmTogether projects 7-13% total returns with 3-9% cash yields. Historical farmland performance shows approximately 11% annual returns over the past 30 years. However, individual farm performance varies significantly based on commodity prices, weather conditions, and local markets. Some farms may return 15%+ while others return 3-5%. Returns aren’t guaranteed, and you could lose money if farmland values decline or tenant farmers default on lease payments. Diversification across multiple properties reduces single-farm risk but doesn’t eliminate it entirely.
How do taxes work on farmland investment income and sales?
Farmland investments use partnership structures (LLCs) that pass income and deductions to investors via K-1 tax forms. Annual lease payments typically qualify as ordinary income subject to your regular tax rate, though partnership deductions for property taxes, insurance, and depreciation offset some taxable income. When the platform sells the farmland after 5-12 years, profits qualify as long-term capital gains taxed at preferential 15-20% rates instead of 24-37% ordinary income rates. FarmTogether offers 1031 exchange programs letting you roll gains into another farmland purchase, deferring capital gains taxes indefinitely. AcreTrader doesn’t currently offer 1031 exchanges. Consult tax professionals familiar with partnership taxation before investing as K-1 forms add complexity to annual tax preparation.
Which platform is better for someone making their first farmland investment?
AcreTrader is generally better for first-time farmland investors due to lower fees (0.75% vs. 1.0-1.5%), lower minimum investments ($10,000 vs. $15,000), and more frequent offerings (weekly vs. monthly). The higher deal flow lets you invest when you’re ready rather than waiting for the next FarmTogether offering. AcreTrader’s focus on traditional row crops (corn, soybeans, wheat) in America’s agricultural heartland provides exposure to the most established, liquid farmland markets with deep tenant farmer pools. However, if you’re specifically interested in permanent crops like almonds, walnuts, or wine grapes, FarmTogether specializes in these higher-value orchards and vineyards. Consider starting with one $15,000 investment in whichever platform offers farms matching your interests, then diversifying to the other platform with future investments once you understand farmland investing firsthand.
