AcreTrader is a crowdfunding platform that allows individuals to invest in farmland shares. Instead of investing in residential or commercial real estate, AcreTrader offers the opportunity to invest in farmland shares as a way to diversify a portfolio. The company, located in Fayetteville, AR, was founded in April 2018 and is a member of the Better Business Bureau with an A− rating and no reviews. The team at AcreTrader is made up of six advisory board members and over 120 employees.
The CEO and founder of AcreTrader, Carter Malloy, comes from a farming background and has experience in financial services. AcreTrader offers the opportunity to invest in farmland shares and earn money through land appreciation and annual rent payments (dividends). Returns are expected to be an unlevered yield of 3% to 5% for lower-risk properties. However, dividends are not guaranteed and the timing and amounts may vary.
AcreTrader selects only a small percentage of the parcels they review and places them into a legal entity that is separate from AcreTrader. This legal entity is what investors are buying shares in, and by proxy, also own the land. Minimum investments are typically between $8,000 to $20,000 and holding periods for properties are usually five to 10 years. However, some properties may have higher minimum investments.
The AcreTrader platform also includes a marketplace where individuals can sell shares before the expected holding period ends. This feature is expected to be available on the platform later in 2023. However, it is important to note that selling shares does not guarantee a return on investment and the value of shares may decrease.
Investors do not have to worry about managing the farmland as AcreTrader handles all accounting, insurance and works with farmers to ensure soil sustainability. The company also sends out a farm manager to each farm to verify the status of the investment and sends out a mid-year update to investors. AcreTrader typically has a couple of investments on the site at a time and has had multiple exits which have performed well. However, the long-term performance of buying farmland shares through AcreTrader is unknown.