Becoming a landlord is not the only way to invest in real estate. There are lots of passive investment opportunities in real estate now.
The most popular way nowadays are publicly traded real estate investment trusts (REITs). These funds are professionally managed and typically consist of many different properties pooled together. You can invest in REITs directly, through mutual or exchange-traded funds.
But crowdfunded real estate is becoming more and more popular. Investors pool their money to buy investment properties. Real estate crowdfunding as an investment offers many benefits. Real estate crowdfunding requires extensive due diligence by smart and experienced real estate investors. Crowdfunding sites often conduct already a high level of research and a lot of the leg work has already been done. Crowdfunding platforms need to do their homework or else they lose the trust of investors. Of course, do your own diligence, too, to understand what exactly you’re invested in.
So, if you’re looking to diversify your portfolio in real estate but don’t want the headaches of becoming a landlord or you simply don’t have a lot of cash to invest, here are some real estate crowdfunding platforms you should consider:
1. Fundrise
Fundrise is the most well-known real estate crowdfunding platform online and launched in 2010. Fundrise offer low minimum investments and is open to all investors. The platform is easy to navigate. But most opportunities are highly illiquid and some of their fees are a bit tricky to understand. If you plan on investing in real estate for the long haul though, then Fundrise might work for you.
2. RealtyMogul
RealtyMogul enables investors to connect with unique real estate investments. The minimum investment is $1,000.
3. Groundfloor
Groundfloor’s investment options are underpinned by secured, collateralized real estate debt, with relatively short terms, about 12-18 months. The inimum investment amount is as little as $10. Groundfloor claims their average returns are 10% per year. Groundfloor’s focus on being a tech-first company delivers a really nice user interface and some excellent data resources for deeper market research.
4. CrowdStreet
CrowdStreet is focused on commercial real estate deals. These include apartment complexes, malls, condominiums, and office buildings. CrowdStreet’s minimum investment is $10,000. CrowdStreet is free to sign up and you can choose between individual deals, funds, or have CrowdStreet build your real estate portfolio.
If you’re considering investing in real estate and you do not want the hassle of being a landlord, then check out the platforms.
Sven Franssen