Insights

Believe It or Not, This is Actually a Great Real Estate Investment

Investors who don’t want to put all their eggs in one basket might consider diversifying their portfolios by investing in farmland.
You can own farmland by investing in a real estate investment trust (REIT) or through a crowdfunding platform. Both are vehicles that let everyday people and accredited investors own a piece of Americana — and potentially reap the profits of what they’ve sown.
Farmland assets have outperformed the stock market for decades, returning an average annual return of 12.6%, compared to the S&P 500 average of 11.1%.
Of the roughly 911 million acres of farmland in the United States, about 283 million acres, or 30%, is owned by non-operator landlords looking to capitalize on the investment opportunity without actually farming, according to the U.S. Department of Agriculture.
Rising food prices could make farmland an attractive investment if you’re looking for diversity in your portfolio.
Over time, farmland returns on investment have been consistently positive since 1991 compared with the value of gold or the stock market, which can rise or fall by up to 50% in a single year.
Image Source: Getty Images.

Farm out the work to REITs
Real estate investment trusts (REITs) are created to own and operate real estate. As its name implies, a farmland REIT invests in farms. Just as with any other type of REIT, a farmland REIT takes care of the management, and investors receive dividends.
Gladstone Land Corporation (NASDAQ: LAND) owns 164 farms in 15 states, totaling about 113,000 acres. The REIT’s farms are 100% leased to 85 tenants and growing more than 60 different types of crops.
Gladstone, which has a history of steadily growing its dividend, focuses on buying high-value farmland that generates above-average revenue and profits. It looks for properties with an adequate, clean water supply; fertile, nutrient-rich soil; and good weather with long growing seasons in established markets.
Since its IPO in 2013, Gladstone has made 108 consecutive monthly cash distributions, increasing the rate 25 times for a total of 51%.
While Gladstone’s stock price declined 0.53% over the past month, it’s up 81.96% over the last year.
Denver-based Farmland Partners (NYSE: FPI), the biggest of the farmland REITs, buys high-quality farmland throughout North America. It owns about 160,000 acres in 17 states that are farmed by more than 100 tenants who grow 26 major commercial crops. Farmland Partners also manages 26,000 acres.
While the REIT has a troubled past, its portfolio of high-quality farmland and strong balance sheet with 60% equity and $40% debt — a good mix for quality farmland — could make it ripe for the picking.
Farmland Partners stock is up about 12% in the last month and about 27% in the last year. The REIT’s operating revenue increased to $13.89 million during the first quarter, up from $11.58 million during the same period a year ago.
Farmland crowdfunding platforms
AcreTrader gives accredited investors access to farmland. Most of the crowdfunding platform’s offerings require an investor to purchase 10 shares, equivalent to 1 acre of land, which typically costs $3,000 to $10,000 an acre.
AcreTrader distributes excess annual income to its investors and generally expects a yield of up to 5% for lower-risk properties — in addition to the expected annual appreciation of the property.
Taking value appreciation into account, AcreTrader shoots for an internal rate of return of 7% to 9%, compared to a historical IRR of 12% because of depressed commodity prices and the platform’s conservative underwriting.
AcreTrader investors generally sell their ownership in five to 10 years. When the property is sold, they get their principal and any appreciation realized over the hold period.
If you invested $10,000 in 1991, it would be worth $215,800 today.
AcreTrader says, “with a growing global population and shrinking U.S. farmland acreage, the laws of supply and demand are clearly in favor of farmland investing.” If you’re looking for a new form of real estate investing that doesn’t involve excessive property maintenance or hands-on work, investing in farmland may be an attractive and lucrative option.
The Motley Fool has positions in and recommends Farmland Partners and Gladstone Land. The Motley Fool has a disclosure policy. –

Investors who don’t want to put all their eggs in one basket might consider diversifying their portfolios by investing in farmland.

You can own farmland by investing in a real estate investment trust (REIT) or through a crowdfunding platform. Both are vehicles that let everyday people and accredited investors own a piece of Americana — and potentially reap the profits of what they’ve sown.

Farmland assets have outperformed the stock market for decades, returning an average annual return of 12.6%, compared to the S&P 500 average of 11.1%.

Of the roughly 911 million acres of farmland in the United States, about 283 million acres, or 30%, is owned by non-operator landlords looking to capitalize on the investment opportunity without actually farming, according to the U.S. Department of Agriculture.

Rising food prices could make farmland an attractive investment if you’re looking for diversity in your portfolio.

Over time, farmland returns on investment have been consistently positive since 1991 compared with the value of gold or the stock market, which can rise or fall by up to 50% in a single year.

Image Source: Getty Images.

Farm out the work to REITs

Real estate investment trusts (REITs) are created to own and operate real estate. As its name implies, a farmland REIT invests in farms. Just as with any other type of REIT, a farmland REIT takes care of the management, and investors receive dividends.

Gladstone Land Corporation (NASDAQ: LAND) owns 164 farms in 15 states, totaling about 113,000 acres. The REIT’s farms are 100% leased to 85 tenants and growing more than 60 different types of crops.

Gladstone, which has a history of steadily growing its dividend, focuses on buying high-value farmland that generates above-average revenue and profits. It looks for properties with an adequate, clean water supply; fertile, nutrient-rich soil; and good weather with long growing seasons in established markets.

Since its IPO in 2013, Gladstone has made 108 consecutive monthly cash distributions, increasing the rate 25 times for a total of 51%.

While Gladstone’s stock price declined 0.53% over the past month, it’s up 81.96% over the last year.

Denver-based Farmland Partners (NYSE: FPI), the biggest of the farmland REITs, buys high-quality farmland throughout North America. It owns about 160,000 acres in 17 states that are farmed by more than 100 tenants who grow 26 major commercial crops. Farmland Partners also manages 26,000 acres.

While the REIT has a troubled past, its portfolio of high-quality farmland and strong balance sheet with 60% equity and $40% debt — a good mix for quality farmland — could make it ripe for the picking.

Farmland Partners stock is up about 12% in the last month and about 27% in the last year. The REIT’s operating revenue increased to $13.89 million during the first quarter, up from $11.58 million during the same period a year ago.

Farmland crowdfunding platforms

AcreTrader gives accredited investors access to farmland. Most of the crowdfunding platform’s offerings require an investor to purchase 10 shares, equivalent to 1 acre of land, which typically costs $3,000 to $10,000 an acre.

AcreTrader distributes excess annual income to its investors and generally expects a yield of up to 5% for lower-risk properties — in addition to the expected annual appreciation of the property.

Taking value appreciation into account, AcreTrader shoots for an internal rate of return of 7% to 9%, compared to a historical IRR of 12% because of depressed commodity prices and the platform’s conservative underwriting.

AcreTrader investors generally sell their ownership in five to 10 years. When the property is sold, they get their principal and any appreciation realized over the hold period.

If you invested $10,000 in 1991, it would be worth $215,800 today.

AcreTrader says, “with a growing global population and shrinking U.S. farmland acreage, the laws of supply and demand are clearly in favor of farmland investing.” If you’re looking for a new form of real estate investing that doesn’t involve excessive property maintenance or hands-on work, investing in farmland may be an attractive and lucrative option.

The Motley Fool has positions in and recommends Farmland Partners and Gladstone Land. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!