Full AcreTrader Review
AcreTrader real estate investing is a crowdfunding platform enabling ordinary people to invest in farms across the nation. This novel way to invest allows you to make money through annual tenant fees and land appreciation.
AcreTrader is best for:
- Agriculture investors
- Investors who want to diversify
- Those who don’t have huge amounts of starting capital
Are you looking to gain exposure to the agricultural sector?
Investors may only purchase shares in regulation D investments, but the platform does intend to expand the types of investments on offer. However, since it’s only been running since 2018, there is little track record when it comes to average investment gains.
Keep reading our AcreTrader review to find out more about this intriguing way to invest in real estate.
AcreTrader at a Glance
AcreTrader was founded in May 2018 by investment professional Carter Malloy. The company currently has 15 employees and has raised more than $5 million. The idea behind this platform is to open farmland investing to the average retail investor.
In an area of real estate investing that has been notoriously under-appreciated, investors have the opportunity to purchase shares in farms across all 50 states. The platform currently claims to offer annual appreciation rates of 7-9%.
Since you’re purchasing shares in farms, you’re not considered a landlord, therefore you have no management responsibilities, as you would when investing in residential and commercial real estate.
How Does AcreTrader Work?
Reviews on AcreTrader are generally positive about the simple interface and the ease with which investors can put their money into agricultural real estate. Let’s take a look at how investors can get started with AcreTrader.
Investing for the First Time
Like any real estate crowdfunding platform, returns are never guaranteed. AcreTrader looks to make gains for investors in two ways. Firstly, there are the rental fees farmers pay. These are nearly always paid annually in one lump sum. There’s also the potential to make gains through the capital appreciation of the land itself.
These are long-term investors, so it’s not recommended to invest unless you plan to hold your shares for at least 3-5 years. Some investments have minimum holding periods of between five and ten years.
The investments available through AcreTrader have been authenticated. The platform claims to feature less than 1% of the investment opportunities it receives.
Minimum investments are $10,000 and most investment opportunities require investors to purchase at least an acre of land or more.
Due to this rule, it can mean many investments require a minimum investment of at least $25,000, or sometimes $50,000.
The major downside of AcreTrader is the service is currently only open to accredited investors. The average retail investor will, therefore, not have the opportunity to use this service at this time.
When comparing AcreTrader vs. FarmTogether, this is a huge disadvantage. However, AcreTrader has said that they plan to allow non-accredited investors to invest in the future.
Find New Investment Opportunities
AcreTrader makes it easy to find the best investment opportunities for you. The AcreTrader marketplace is a crowdfunding platform at the core of the website.
You’ll see a list of investment opportunities with all the documentation, details, and fees needed to understand what you’re investing in and whether it’s a good idea.
The simplicity of investing is what separates AcreTrader from other alternative investment platforms.
How AcreTrader Increases Investment Values
As well as the thorough underwriting process, the way farm investments are managed differs. Each farm on the AcreTrader platform is placed into a separate limited liability company. AcreTrader takes over the management of each farm and works with professionals to increase the value of each investment.
Some of the ways the platform claims to increase farm value include:
- Implementing best farming practices
- Improving existing technology
- Capital investments
- Commitment to enhancing sustainability
According to AcreTrader, they look for agricultural investing opportunities with a minimum yield of 3% to 5% after fees. Its capital appreciation projections fall in the region of 7-9%.
However, since the platform has such a short track record it remains unclear as to how realistic these projections are.
Mobile Accessibility with AcreTrader
Investors are increasingly looking for mobile options so they can inspect their portfolios and trade on the go. Sadly, AcreTrader has yet to provide a dedicated app for smartphones and tablets.
The AcreTrader platform is, however, fully optimized for mobile, therefore making an app unnecessary. The mobile website includes all the same access options and functionality as the desktop website.
Even though some investors may prefer an AcreTrader app, nothing is lacking when it comes to the current mobile experience.
This is a relatively new way to invest and so there’s a lot of confusion about how it works. Let’s take a look at some of the most common queries people have about the AcreTrader platform.
Does Farmland Have a Strong Track Record of Appreciation?
Yes, farmland has historically delivered strong returns for long-term investors.
Does AcreTrader Offer Support for Newbies?
Yes, the AcreTrader University provides plenty of learning resources for the newer investor to learn about investing in agricultural land.
Can I Sell Before the Holding Period is Up?
Yes, you can sell your shares before the holding period is up, but it’s not recommended.
How Can I Become an Accredited Investor?
As of this writing, AcreTrader is only open to accredited investors. This means you’ll need to obtain accredited investor status via the SEC before you can invest with AcreTrader.
To become an accredited investor, you’ll be required to meet certain qualifications, such as possessing more than $200,000 in annual income or showing a net worth of at least $1 million (not including your primary residence).
For all but high net worth individuals, it’s extremely difficult to gain investor accreditation.
Is AcreTrader Legit?
Although AcreTrader has only been offering investment opportunities since 2018, the founder, Carter Malloy, is the largest shareholder, which means he has a big personal stake in the company.
All funds in escrow go through the North Capital Private Securities Corporation, which is a member of both SIPC and FINRA.
All investments are managed outside of AcreTrader, which means if the platform goes bankrupt your money is safe.
As of February 2021, AcreTrader holds a solid A+ rating with the Better Business Bureau, which should alleviate most investor concerns about safety.
Currently, there’s no way of knowing whether investors on the platform will make money because farmland typically requires a 5-10 year holding period. AcreTrader only closed its first series of deals 2-3 years ago.
Only time will tell whether AcreTrader’s agricultural properties turn out to be good investments.
Is AcreTrader Right for You?
Most reviews on AcreTrader say this is a growing investment platform that could establish itself going forward. The main downsides of the platform are the high minimum investment fee and the fact only accredited investors can invest.
Once AcreTrader addresses these problems, we believe this stands to be one of the best alternative real estate investing platforms around.
Check out AcreTrader to find out more about investing in the nation’s farms.