Farmland has been a popular alternative asset class among the uber-wealthy because it provides slow, steady and stable returns over time and isn’t particularly correlated to any other index. However, as you can imagine, it’s not easy to invest in farmland. You’ll need knowledge of the market, rural locations, pricing and much more.
See all the best real estate investing offers here. Find more investment offers here (e.g. J.P. Morgan, Ally Invest).
FarmTogether aims to simplify the process, opening up fractional share farmland investing to accredited investors. In this review, we’ll go over everything you need to know about FarmTogether.
FarmTogether Features
| Product Name | FarmTogether |
| Minimum Investment | $10,000+ |
| Target Hold Period | 5 – 10 years |
| Annual Fee | Varies by investment |
| Account Type | Taxable, IRA, Trust |
| Promotions | None |
FarmTogether sources and manages institutional-quality farmland for crowdfunding and bespoke investment offerings.
- Crowdfunded farmland. These offerings are available to accredited investors with minimums starting at $10,000. Hold periods start from five years with annual liquidity windows for earlier exits.
- Bespoke sole ownership. These offerings are for individual investors who are willing to invest $1,000,000+ in equity per farm. The legal, tax and capital structure are fully customizable, along with hold period, risk-return profile and cash yield profile.
Income is generated from crops and land value appreciation. Investors are paid out from farmland operations and capital gains from selling the farmland at the end of the holding period.
FarmTogether provides hassle-free services, including fund administration, accounting and tax reporting. Investors have secure access to relevant documents and investment performance, such as projected and actual payout comparisons, distributions history, historical distributions and K-1 tax forms.
As with all investments, it’s important to examine the firm’s legitimacy, management, sourcing and returns.
Legitimacy. FarmTogether has raised millions of dollars from angel and venture capital investors. The company has closed on a few deals and formed partnerships with successful farm investors and operators.
Management. FarmTogether was founded by Artem Milinchuk, who is the CEO and largest investor in the company. He boasts more than a decade of experience in farmland and agriculture, particularly in finance. A number of other FarmTogether executives have agribusiness finance and investing experience.
Sourcing. FarmTogether identifies investment opportunities, then vets them to determine if they meet company standards. The process evaluates the crop, valuation of the farm and the capabilities of the prospective operator. FarmTogether also considers ways to invest in the farm to raise its value, like adding infrastructure or turning it organic.
Returns. FarmTogether only closed its first deal in late 2019, and that deal is expected to be held for five years. So, there’s no real history of returns to go off of. However, farmland has an excellent track record of delivering strong returns with minimal losses. FarmTogether claims their investors can expect returns of 7% to 13%.
FarmTogether Fees
FarmTogether says it charges investors two different fees:
- 1% of your total investment upfront for each investment you make
- 1% per year for asset management
Partner deals might incur additional fees, for example a share of the profits paid when the farm is sold or an annual onsite per-acre management fee. Make sure to take the time to review every deal and understand the fee structure before you invest.
FarmTogether Requirements
To invest with FarmTogether, you must meet the following minimum qualifications:
- Earn an annual income of at least $200,000 for the past 2 years, or $300,000 per household.
- Have a net worth of at least $1 million, individually or jointly.
- Expect that your income will continue to meet the $200,000 threshold, or $300,000 per household, for the foreseeable future.
Banks, insurance companies, registered investment advisors, business investment companies, employee benefit plans, trusts and charitable organizations with a net worth of up to $5 million can also invest with FarmTogether.
FarmTogether Limitations
Before you invest with FarmTogether, keep the following in mind:
It’s open to accredited investors only. You must be worth $1 million or more and earn at least $200,000 per year to invest with FarmTogether.
It’s new. FarmTogether has only funded a few deals, so it’ll take a few years before the company establishes a track record.
Its investments are illiquid. Once you invest with FarmTogether, your capital is tied up until the holding period is over. In most cases, that’s going to be at least five years.
There’s also inherent risk to investing in farmland real estate, as the farm may not produce as expected, due to things like pests or disease, drought, catastrophic weather and mismanagement.
Bottom Line
FarmTogether’s platform makes it easy for accredited investors to gain exposure to farmland as an asset class. Its attractive projected return and relatively low fees make FarmTogether a compelling choice if you’re looking to diversify your portfolio outside of stocks and bonds.
Other real estate investment options for accredited investors include CrowdStreet, Fundrise (promo available) and Origin Investments.
See all the best real estate investing offers here.
READ MORE: SEE THE BEST BANK BONUSES HERE AND THE BEST INVESTING BONUSES HERE.
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