AcreTrader is a newer and upcoming form of real estate investing that shows quite the difference from usual forms of real estate investing. Perhaps you’ve never been looking to gain exposure into the agricultural sector but now that AcreTrader is here it might seem like a great idea. This AcreTrader review is set out to outline and review AcreTrader as a whole so you know exactly what to expect when you’re looking to invest.
AcreTrader is a form of real estate investing done a little different using a crowdfunding platform that enables normal people just like you and me to invest in farms across the nation. This incredibly interesting way to invest allows you to make money through the likes of annual tenant fees as well as land appreciation.
At this point in time, investors may only purchase shares in regulation D investments, however, the platform does intend to soon expand the types of investments that are on offer. One thing to keep in mind is that while it may be a great platform, it has only been running since 2018, so there is very little track record to review when it comes to average investment gains. There is no doubt that it is an intriguing way to invest in real estate.
As stated above, AcreTrader was founded in May of 2018 by the investment professional known as Carter Malloy. As of now, the company currently had 15 employees and has raised far more than $5 million. The idea behind AcreTrader is to open farmland investing to the average retail investor.
One of the best things about AcreTrader is the fact that real estate investing had been seriously under-appreciated throughout time, but with this platform, investors gain the opportunity to purchase shares in farms across all of the 50 states. The platform is currently claiming that it offers annual appreciation rates of around 7-9%. With AcreTrader, you’re not considered a landlord as such since you’re only purchasing shares.
This also means that you have absolutely no management responsibilities as you usually do when investing in residential and commercial real estate.
How does AcreTrader work?
People tend to enjoy using AcreTrader mainly because all of the reviews on it are quite positive as well as the fact that it has a very simple and user-friendly interface. On top of that, the ease of use is wonderful which means that investors can put their money into agricultural real estate without stress or confusion. Let’s look at how you can get started.
Investing for the first time
Returns are never guaranteed with any real estate crowdfunding platform and AcreTrader is no different in that respect. AcreTrader looks to make gains for any investor in two ways. First off, there are the rental fees that farmers pay that are nearly always paid annually in one large lump sum. There is also the potential there to make gains through the capital appreciation of the land itself.
This is most definitely a long-term form of investment, so it is not recommended to invest until you are planning to hold your shares for at least 3-5 years. Some investments have a minimum holding period of between five and ten years, so be aware of that. The investments through AcreTrader that are available now have been authenticated and the platform claims to feature less than 1% of the investment opportunities it receives.
When it comes to minimum investments with AcreTrader, the minimum investment is $10,000 and most of the investment opportunities require investors to purchase at least an acre or more, no less is allowed. Due to this rule, it can mean that many investments sometimes require a minimum investment that lands anywhere between the $25,000 and $50,000 mark. The major downside of AcreTrader is the fact that the service is currently only open to accredited investors.
The average retail investor will not able to gain the opportunity to use this service which is incredibly saddening. However, hopefully over time, the opportunity arises for other investors to be able to use AcreTrader. When you compare AcreTrader and FarmTogether, this can come as a huge disadvantage. Luckily AcreTrader has said that they do plan to allow non-accredited investors to invest in the future.
The bottom line
AcreTrader is most definitely a growing investments platform that could establish itself going forward. The main downsides of the platform are said to be the high minimum investment fee as well as the fact that only accredited investors are able to invest. Once AcreTrader has ironed out these little problems, it stands to be one of the best alternative real estate investing platforms around in the world right now.