Most investors, especially those just starting out, are drawn to stocks and bonds. And it’s no wonder: they offer attractive margins, next to zero maintenance, and are facilitated by each and every robo-advisor imaginable.
But this leaves a whole world of investment possibilities untapped. Alternative Investments is a catchphrase you will see crop up from time to time, but what’s it refer to? Alternative Investments is an umbrella term which includes cryptocurrency, private equity, tangible assets such as precious metals and other natural resources, venture capital, and real estate.
Alternative investments are opportunities for diversification. By investing in different vehicles and sectors, one naturally increases their personal risk tolerance. For example, cryptocurrency has been all the rage of late, and with good reason – profits have soared and trading platforms dedicated to the management of crypto have made the trade so much easier.
Nevertheless, we are somewhat reluctant to fully endorse cryptocurrency because of its volatility – with no referent but itself, there’s no telling how high or how low it may go.
Real estate is a popular form of alternative investment, but many are hesitant about approaching its shores. That’s because the wrong images may spring to mind: the trials of being a landlord, the hassle of renting a room, and all that selling and buying homes entails.
Yet real estate investment can be done passively, just like stocks and bonds through a simple robo-advisor like SoFi Invest. It’s only a matter of finding the correct platform. CrowdStreet, Fundrise, and DiversyFund are all good crowd funding options which give the everyday user access to real estate investment. By linking developers and real estate moguls with individual investors, this signals a new kind of democratization on the rise.
But we’d like to suggest something even more alternative and exciting, while in the same vein: farmland investing. Typically “real estate” is associated with the urban high-rise, or else some kind of commercial warehouse property; farmland investing, on the other hand, is an overlooked yet ripe sector on the verge of a boom.
Modest Money’s review of AcreTrader is glowing: the platform for those wanting exposure to the agricultural sector, it offers a streamlined and newbie-friendly approach that rivals the best traditional investment platform.
Let’s take a look at AcreTrader’s important features, and exactly what makes it novel in the crowded world of personal investment opportunities.
AcreTrader – Open Vistas
- Ease of Use: AcreTrader gets praise for its simple, user-friendly interface. If you’ve ever used a robo-advisor like Betterment or WealthSimple, nothing will seem out of place here. What’s more, it’s very simple to get up and running: once you’ve set up a user account and linked it to an existing bank account, you’re on the fast track.
- Detailed Underwriting: We’ve found that one of the great things about AcreTrader is how they provide a brief “narrative” for every farmstead available for investment. Having a backstory to go along with your investment gives you a sense of knowing the land.
- Investment Thresholds: $10,000 is the minimum amount one can invest on AcreTrader, and investors are required to purchase at least one acre of land. The only problem is that minimum investments can end up being close to $25,000, or even $50,000, making AcreTrader an investment avenue that’s somewhat exclusive.
- Learning Center: since farmland is probably an obscure sector for most investors, AcreTrader has established a learning center containing extensive information about farmland investing. Get a historical overview of the industry, as well as up-to-date content about contemporary issues and concerns surrounding agriculture.
- Accredited Investors Only: As of now, AcreTrader is open to accredited investors only. Accredited Investors are endowed with a special status under financial regulation laws which allows them to purchase securities not registered with the SEC. While this means that the majority are not able to partake in AcreTrader, they do have a detailed plan to open up to non-accredited investors in the near future.
The idea of investing in farmland may initially cause some skepticism, what with agriculture taking a hard backseat to the jazz and glitter of pharmaceuticals, technology, and even urban real estate investment.
But the fact is, farmland has historically outproduced most asset classes and comparable forms of real estate. With annual returns hovering around 12% for the last three decades, we think it a surefire way to diversify your portfolio while maintaining both security and considerable gains.
Another thing to keep in mind is the ethical dimension of farmland investing. With morals and ethics becoming a kind of “currency” among savvy, hip traders, suggesting that you invest in America’s heartland is sure raise your own estimation.
AcreTrader, in a bid to help America’s farmers, makes it a point to implement the best farming practices on properties they are associated with, improve existing technologies, and make significant capital investments.
The Bottom Line – Manure or a Pile of Gold?
At the very least, we think AcreTrader is a platform everyone should keep an eye on. Though only available to accredited investors, it’s worth looking into farmland investment now, as this is a largely marginalized asset class that is poised for a boom.
The great thing about modern technology is accessibility, and robo-advisors and like investing platforms provide easy access to alternative investments.
Don’t let yourself be doomed to tunnel-vision: branch out, look for other avenues, open your horizons – there are beautiful, profitable vistas out there.