New Marketplace Lets Investors Buy Shares of US Farmland
Investors can acquire shares of farmland for as low as $1,000 using AcreTrader.com.
FAYETTEVILLE, ARK—AcreTrader, a relatively new farmland investing company has launched a platform that allows individual investors to buy shares of US farmland through its online portal.
“Farmland is a highly attractive, multi-trillion asset class with historically low volatility and impressive, debt-free returns,” said Founder and CEO Carter Malloy.
With its software and processes, AcreTrader identifies farmland and, after rigorous review, offers it as an investment vehicle on its website. Investors buy shares in individual farms for as little as $1,000, while the company takes care of the ongoing management and administration for each farm acquired. Each share is expected to receive annual cash payments from the farmers renting the land. In addition to this passive income, the underlying value of each share is expected to grow over time as the price of land increases.
“The marketplace for farmland is incredibly immature. Opportunities abound in this market sector and right now there is more demand than there is supply. There is a big difference between high-quality cropland and just empty land and our platform only offers access to quality farm lands” says Malloy.
Data from the National Council of Real Estate Investment Fiduciaries show that the combined annual return of US farmland investments averaged 11% to 12% since 1990. As this investment performance was achieved without using debt, it results in a much lower volatility profile than comparable assets such as commercial real estate.
AcreTrader closed its first farm offering in February–a leveled rice and soybean farm in the Arkansas Delta.
“As we move forward, AcreTrader.com plans on building a secondary marketplace for investors as well as start a farm REIT, which will be a mechanism for non accredited investors to participate in the investment, Malloy says.