Technology is rapidly democratizing the way we invest our money. Thanks to advanced computing power, data can be transmitted, stored, and manipulated more efficiently than ever before, which is opening up brand new opportunities for individual investors. In recent years, for example, a number of fintech startups have cracked open the private real estate market, which previously had been available only to institutional investors and billionaires. Now, startups like FarmTogether are doing the same thing with farmland investing.
Like commercial real estate, modern farmland investing is a fantastic way to diversify your portfolio. Both farmland and commercial real estate let you invest in real assets that generate regular rental income. Both also hedge against inflation, helping you balance out investments in traditional financial assets like stocks and bonds. However, farmland tends to have less volatility than commercial real estate. It also tends to be more insulated from the ups and downs of the stock market, something experts call “low cyclicality.” For these two reasons, American farmland has been one of the most stable asset classes over the past 40 years, even during times of economic crises.
Unfortunately, for a long time, the problem with investing in farmland was that you had to have enough capital to buy entire farms. But now, thanks to companies like FarmTogether, that is no longer the case.
So how does FarmTogether work? It’s actually pretty simple.
You’re probably familiar with crowdfunding platforms like Kickstarter and GoFundMe. Well, FarmTogether works just like those. However, instead of crowdfunding a new company or a charity, you’re crowdfunding the purchase of farmland. And instead of getting some “bonus” as a “thank you” for your investment, you get partial ownership of the property.
First, FarmTogether’s executive investment committee examines hundreds of potential properties and selects the ones they deem most promising. Then they hire external independent analysts to conduct another round of comprehensive due diligence, evaluating everything from soil quality and water rights to on-farm equipment and potential for capital improvements.
Once the evaluation process is complete, these handpicked properties are offered as crowdfunding investment opportunities. You can then pick and choose the properties that are right for you. When you buy in, you are buying shares of the LLC that owns and operates the property. FarmTogether provides full details about each individual investment opportunity, including the total value of the offering, the estimated length of time the LLC will hold the property, and the estimated cash yields.
When you invest with FarmTogether, your money grows in two ways. First, you will earn cash dividends on a yearly or quarterly basis from the net proceeds of operating the farms. Then, after the property appreciates over a set period of time, it will be sold and you will get your share of the capital gains. If you invested $10,000 in a $5 million property, you’ll get 0.2% of the proceeds. If you invested $50,000 in a $2 million property, you’ll get 2.5%.
Obviously, as with any investment, when you invest with FarmTogether you’ll need to read all the fine print to make sure it’s right for you. However, if you’re looking for a safe, modern way to bring real diversity to your investment portfolio, farmland could very well be the answer. So don’t wait. Click here to learn more about FarmTogether, today.
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