Owning land is a dream for many Americans.
Owning land that produces passive income is even more sought after. This leads many investors to research an investment in agriculture.
The challenge; farmland is expensive and if you have to run your own operation it’s hardly passive.
Traditionally, the next best option was to invest in a Farmland REIT.
This blog will look at a few of the differences between REITs and a newer method of investing in agriculture; Crowdfunding.
REITs offer a higher level of liquidity compared to owning the actual farm ground. Another benefit is the lower initial investment requirements. This is great for investors until you consider the buy and lease business model used by most REITs. This model can limit returns.
It also puts investors on the other side of a middleman which can add a layer of uncertainty in the investment.
Compare this to FarmFundr’s Agriculture Crowdfunding Platform.
For the first time investors are able to make direct investments in income producing farmland.
Crowdfunding allows investors to see the details of the farm they’re investing in. View expected returns and manage your exposure while helping individual farmers feed the world.
PROS & CONS
While REITs offer liquidity that’s where their benefits stop.
The lower returns and added complexities diminish many of the benefits that come from investing in agriculture.
With FarmFundr investors will receive the full return from each crop. Experience your return on investment as well as the, literal, fruits of your investment.
Each year FarmFundr sends investors a packaged box from the farms they’ve invested in.
The crowdfunding process allows investors to learn about their investments.
FarmFundr researches and invests in various types of farm land.
- Orchard & Vineyard
- Certified Organic
- Row Crop
- Water, Agriculture Facilities and More
The Best of Both Worlds
If you’re looking for a Farmland REIT then you know the benefits of investing in farmland. Among other things, it’s a great hedge on inflation.
While REITs used to be the only option that is no longer the case.
Agriculture crowdfunding allows investors to experience the upsides of REITs (minimal upfront investment and high liquidity), while also experiencing the upsides of owning a piece of an individual farm.
You’ll experience financial returns while being able to see the direct impact your investment has on a real working farm.
The Final Verdict
It’s important that investors do their own research and create a diversified plan that fits their investment needs.
When looking to diversify or hedge against inflation, investing in farmland is a great place to start. The next question is, how will you invest in farmland?
If you want to own an actual farm while experiencing the financial returns of a traditional REIT, then crowdfunding may be the right choice for you. Click here to view our current available agriculture investment properties.
Do you have more questions? View our FAQ Page.