Farmland can be an excellent investment. There are many ways you can put money into it, whether through REITs, buying agricultural stocks, becoming an LLC owner, crowdfunding, and more. You don’t have to buy farmland as an investment, especially if you don’t know much about running a farm. It’s better to invest in one of the other ways.
Unfortunately, only “accredited investors” can get involved in some of the farmland investment opportunities. To be an accredited investor, you’ll need to meet certain requirements, such as a set amount of income and net worth. The SEC regulates public investments like stocks but doesn’t have the resources to regulate every single type of investment out there.
For the investments that are difficult to regulate, the SEC will only allow individuals with an annual income of $200,000+ per year for the last two years (or $300,000+ per household) with an expectation of maintaining that level in the years to come and have a net worth of over $1,000,000 (individual or household).
If you qualify as an accredited investor, the amount you would be expected to put up as a minimum investment on the platform might vary. Each platform has its own rules, but to give you a rough estimate, the minimum amount you would be required to have for investing in a farm crowdfunding program can range anywhere from $5,000 – $20,000. To purchase farmland through sole ownership bespoke offering (through a third-party platform that will handle all of the hard work for you), expect to put up hundreds of thousands if not a full million dollars.
Buy Farmland as an Investment Even if You’re Not Accredited
Don’t worry if you don’t meet these income requirements, as more new, unique opportunities are coming up regularly. Also, there are always individual stocks, mutual funds, REITs, and so forth. Having some farmland real estate or agricultural investments in your investment portfolio is always a good idea since there will always be a need for crops, dairy products, and other commodities, just as there always has been for tends of thousands of years.
When trying to find platforms that offer accredited investors opportunities to buy farmland as an investment, the ideal ones will be transparent in their strategies. They should clearly explain how they handle things like geographic risk, market prices, weather conditions, financial leveraging, water rights, crop type risks, market liquidity, and so forth.
One platform that offers a few innovative ways to invest via crowdfunding or buy farmland as an investment (bespoke offerings) is FarmTogether. They have excellent strategies for generating income from not only crops but land value appreciation as well. Risks are minimal. You can monitor your investment and invest with whichever method you prefer (individual entities, Solo 401k accounts, self-directed IRAs, corporations, and more).