If you are looking for a way to build generational wealth, then investing in land -particularly farmland- can be a great way of doing so. A superior passive income stream and newly accessible form of real estate investing, agricultural real estate, or farmland, is turning into a mainstream investment opportunity that’s topping headlines.
Curious how to begin? Let’s dive into our FarmTogether review, a technology-enabled farmland investing platform that re-writing the future of real estate investing. We’ll break down how you can invest and what types of offerings you’ll find on the FarmTogether platform.
Is the FarmTogether platform right for you? Let’s get started:
What is FarmTogether?
FarmTogether is an all-in-one real estate crowdfunding platform where you can find and invest in farmland investment opportunities to diversify your portfolio and increase your passive income.
With FarmTogether, you’re able to invest in more tangible and bite-sized chunks; rather than purchase an entire farm outright, the platform enables you to pool your money with other investors to get involved in real estate opportunities.
FarmTogether believes that farmland investing is a great long-term addition for investors.
You may not have thought about investing in farmland before, or wondered how you can find the best opportunities – and this is where FarmTogether comes in.
How Does FarmTogether Investing Work?
We are going to take a look at how FarmTogether investing actually works, and how you can get started making money with FarmTogether.
FarmTogether works by finding potential investment opportunities and putting them through their microscope to see if the property will be a worthy addition to their platform. Only 3% of deals that enter their pipeline are eventually offered to investors.
They look at a few things: the valuation of the farm, the property’s water availability and soil quality, regulatory landscapes, long-term trends in agricultural yields, cost of inputs, and more. The team also determines if additional investments would help with the growth and the profitability of the farm down the road.
If they find that there is potential, they will reach out to the seller and negotiate a deal, and then list it on FarmTogether.
When this deal is fully funded, the investors in the property will receive a yield that comes from the farm’s cash flow, through both crop prices and lease agreements, over the specified period. Investors will also receive their share of capital gains from the sale of their farm.
The average return of investment for farmland over the years has been 10.85%.
In this FarmTogether review, we will mainly discuss the way of investing on FarmTogether by using the crowdfunded option, but there is in fact another option available if you have the cash – sole ownership bespoke offerings.
If you have at least $500,000 ready to invest, you can look into a sole ownership offering, which means that you would be the only investor involved. The risk would be all yours, but the return could be greater.
2 Main Categories
There are 2 main categories of farmland that you can invest in on FarmTogether:
- Row Cropland
- Permanent Cropland
Make sure you do your research into the different types, as you don’t want to invest just because people say so. What kind of farmlands do better than others? This is something that you’re going to want to check out.
Who Can Invest?
Not anyone can invest on FarmTogether. In order to invest on FarmTogether, you will need to be an SEC Accredited Investor, which means that you will have to meet the following requirements:
- To earn an annual income of over $200,000 per year for the most recent 2 years, and with the understanding that this level of income will continue. The annual household income should be $300,000
- To have a net worth which is $1,000,000 minimum, which does not include your primary residence. The total net worth can be either individual or joint
- To invest as an employee benefit plan, partnership, charity, a trust or a company which holds assets of over $5 million
- To invest as one of the following companies: a bank, insurance, investment advisor, business investment or a business development company
- To invest as a business where all of the equity holders are investors (accredited)
FarmTogether will verify your accreditation by accepting certificates from Verifyinvestor, InvestReady and ParallelMarkets, or directly through relevant documentation.
If you are not accredited, you can still open up a free account to learn about farmland investing via FarmTogether’s robust Learning Center and browse the various investment opportunities across different crops and regions. While non-accredited investors are not able to invest, FarmTogether is working on opening the platform to more people through a secondary market.
You don’t just need to be in the U.S., either, as FarmTogether also offers investments to international investors..
There is a minimum investment amount for using FarmTogether, starting at $15,000.
The best thing to do is double check what it says on the site, as it can be different depending on the investment opportunity that you go for.
FarmTogether Fees & Commission
The fees that FarmTogether charges vary for each deal, but they are listed on the page for each investment opportunity.
FarmTogether aims to have lower than average fees for the industry, which they do by lowering their costs with technology and self-service.
There are two main types of fees on FarmTogether:
- Annual management fee
- A one-time fee for expense reimbursement
A typical fee structure for a farmland deal is around 1% for acquisition and 1% for the annual management fee – but make sure you check each deal before committing.
We love the FarmTogether website – it’s very well laid out and simple to understand.
Getting started with FarmTogether is easy, as you just need to enter some of your information and why you want to get started investing in farmland, and then you can start browsing through the available farmland straight away.
It’s easy to browse through the different investment opportunities on FarmTogether. When you log in to the site, you will be shown a Dashboard with all farmland investment offerings, which you can search for by crop, initial investment and more.
They also have an Investment Profile Calculator which will show you your net return estimate by using their sliding scale tool to view the potential returns.
FarmTogether offers two ways of contacting them currently – by email or by phone.
You can email them at [email protected] or phone them on 904-404-5902, but make sure you book in to speak with them first on your FarmTogether account.
FarmTogether is also pretty active on social media, and the CEO is often found hosting on the Clubhouse app.
Farm Investments in the US
When you think about investment opportunities to consider, farmland may not be one of the first that pops up in your mind. But it’s such a great investment, and not one that’s been mainstream in the past.
Farm investments in the US are becoming more popular, especially with platforms like FarmTogether making it easier to do so.
As an asset class, farmland is one that has been shown to outshine other investment options, even real estate.
As there is less land available as time goes on, it stands to reason that farmland will only become more popular and lucrative.
Buying Farmland Online
If you have been thinking about buying farmland or investing in it in some way in the real estate market, doing so with FarmTogether’s account can help you to find a lot of deals, all at once.
You can sign up for your FarmTogether account here and get started today.
FarmTogether Pros & Cons
- Low fees
- Low account or investment minimums
- Unique asset class
- Socially responsible investing
- Diversified fund option
- Can combine your money with other investors
- Helpful website with lots of information/education material
- Accredited investors only (meaning you have a net worth of $1 million or earn an income over $200,000 two years before investing)
- Limited track record of results- a new platform means not enough results yet
- Higher than average minimum investments when compared to other investment platforms
- No mobile app
FarmTogether Risks & Returns
Using FarmTogether as an investment platform has the potential for good returns, but it’s worth bearing in mind that they are a new company.
The annual returns will always depend on what you put your cash into – row crop, various agriculture, more real estate but less agricultural offerings- the possibilities are endless and variable!
US farmland is still a newly available alternative investment for investors. We don’t know how the returns will look in the long run, as it’s a process that takes years.
We think potentially having a FarmTogether account is a good idea because farmland, in general, is something that provides great returns. Agriculture investing has grown and is very promising for accredited investors.
Education & Research
When you are investing in something, it’s important to know what you are investing in, and what it all means.
Luckily with FarmTogether, they have a Learning Center to help you understand farmland investing.
There are so many handy parts in the Learning Center to get started, such as:
- Farmland whitepapers – FarmTogether has put together two whitepapers that will show you the benefits of investing in farmland, the risks and recent trends, and how the asset class has performed during recessions
- Webinars and podcasts to expand your knowledge
- Blog posts and infographics to provide you with information on agricultural products and Farmland investing information
Picking the Right Investment Opportunities
You need to make sure that you are picking the right investment opportunities for you, and your goals.
Are your goals really long-term, like 30-40 years, or more like 5 years? Do you want to have a diverse portfolio?
Make sure that you are picking the right investment opportunities for your situation, and not because everyone else is doing it.
Other Investments For You
There are other types of investment that you could include in your portfolio, as the best thing to do is diversify your portfolio so that you don’t have all of your eggs in one basket.
- Other Real Estate – There are other types of real estate opportunities that you could get into, that may not require as much money, such as REITs
- Investment Accounts – Investing in the stock market is another way to go in order to grow your money that you can start with much less money than investing in farmland
Is FarmTogether legit real estate investment?
Yes, FarmTogether is a legit real estate investment. They are a 100% owned company which will manage the investment properties for you.
That being said, they are a new company, so it’s always best to be a bit wary as we cannot see any historical returns of success.
Will you make money in this investment?
The whole point of investing in anything, is to make money! With risk, comes reward.
When you invest on FarmTogether, you’re purchasing shares in an LLC. You become a fractional owner of the farmland and are entitled to returns from its operation. You will receive your returns from lease and crop sale payments made either every 3 months, 6 months or 12 months, and from the price appreciation at the end of the holdtime.
Is it risky to invest in farmland?
As with any type of investments, there is always some risk involved. The reason for this being that you are hoping that by putting some money into something, you will get a return, but it is a gamble that you have to be willing to take.
For farmland specifically, it does historically produce strong returns, but there are some risks to think about, such as:
- Poorly run
- Diseased crop/animals
Whether the company FarmTogether is risky to invest in or not, is a different matter. The good thing about investing through FarmTogether is that they are a separate entity to the farm, so if something went wrong with FarmTogether it shouldn’t have an impact on your investments.
Farmland as an asset class is something to snap up, as it’s not something that just about anyone has been able to invest in before, and this presents an interesting opportunity.
Another thing to bear in mind is that your investments in FarmTogether are illiquid – meaning that you can’t just take the cash out whenever you want. However, as we mentioned, the company is building a secondary market to provide investors with more liquidity. FarmTogether has successfully completed two secondary pilots.
Final Thoughts on FarmTogether
If you’ve been looking for a way to learn about investing in farmland, FarmTogether is a great option for you to try out and get involved with US farmland investment.
After making this FarmTogether review, we realize how much research into the market is needed and how prepared you need to be to make good portfolio decisions.
Make sure you read through all of the terms and the fees, as each deal will be different. It’s also important to note when you will receive money, there are different payout structures for each deal as well.
As with most investing opportunities, it’s better to think about them for the long term- so it may not be for you if you need to get money quickly from your investments. However, farmland investing is one of the best passive income streams available.
There are all kinds of additional things to consider when investing in farmland and must do your own due diligence work, as you will not be investing in FarmTogether itself, but in the individual land opportunities.
This means that you need to research all of the farms, the crops, and the market. You need to have a bit of a clue into what’s going on – it’s not just about throwing money at it and hoping it works out.
When it comes to investments, we like to think that you should try and be as diverse as possible, so you could have lots of different types of investments to make your portfolio more diverse.