Crowd farming platform Livestock Wealth has expanded its investment offerings, to introduce Farmland Investment on its app, allowing investors to own a portion of land on a farm.
The fintech platform says its latest venture provides investors who want to own a farm with an opportunity to buy – together with other investors – a portion of a professionally-managed farming operation and own it over a period of up to 10 years.
This approach, according to the company, opens up affordable access to farm ownership via its app, to anyone who may not have access to land, the time or agricultural skills required to successfully run a farm.
The entire farming operation is managed and run by a qualified farmer, who turns it into a profitable business, increasing its value.
“Livestock Wealth searches and finds the best available farms to purchase directly from farmers or on auction,” Ntuthuko Shezi, CEO and founder of Livestock Wealth, tells ITWeb.
“We are targeting cattle farms and those of high-value crops and orchards, such as macadamia and others. Once bought, the specific farmland is owned in a separated company, where investors are the shareholders according to the number of portions they purchase. The investors make money from renting out the farm to a professional farmer and from the increase in the value of the land over time.”
Each portion is sold for R50 000 and is projected to earn an annual return of 4% per annum (R2 000 in value).
According to Shezi, the size of each land portion bought varies because it is determined by the overall value of the farm.
“For example, if a farm was bought for R10 million, it would consist of an average of 200 portions of land – making each portion about two hectares in size. Farm land doubles in value every 15 years, but when well-chosen and managed, this could happen sooner,” he notes.
“High value crops increase the value of the land considerably over time, and the company seeks to create a profitable exit for the investors by selling the farm when the value is high, but the decision of when to sell is up to them.”
Founded in 2015, Livestock Wealth initially started as a platform that offers people who do not have access to land, the time or necessary skills the opportunity to own livestock within a professionally-managed farming operation.
Over the years, the business has evolved to allow investors to buy an array of assets via its web and mobile app, including a connected garden system, cattle, organic vegetables, maize and most recently, macadamia nut trees.
According to Shezi, the company’s asset value is now in excess of R120 million.
Farmland Investment farms include different assets − such as agricultural products and stock – which are safeguarded by Livestock Wealth, to ensure maximum profitability for the duration of the investment period, he continues.
“With the myriad of options in the investment space, it’s difficult to know which horse to back. When investing in farming land, Livestock Wealth takes a number of vital factors into consideration; namely, shared costs through co-ownership, professional and vetted farmers to ensure sustainability and profitability, as well as a good management team.”