Unleashing the Power of Property Investments: A Guide to Real Estate Crowdfunding for Everyday Investors.
Real Estate Crowdfunding for Beginners
Guess what? Investing in real estate has never been easier. Thanks to the introduction of crowdfunding platforms after the Jumpstart Our Business Startups (JOBS) Act approval in 2012, you no longer need a mountain of money or spare time to be a landlord. You can join in real estate investment starting with quite a low amount.
Before, only accredited investors who had significant financial resources could get involved in many real estate opportunities. You would need an annual income of $200,000 individually or $300,000 combined if married, or a net worth over $1,000,000 excluding your primary residence to qualify.
But today, for people who don’t meet these criteria, there are a host of online platforms that allow you to invest in a portfolio of properties. Even better, they handle all the nitty-gritty details, so the investment remains passive. Real estate crowdfunding websites allow you to start investing at a small scale, breaking down the barrier of high capital requirement for traditional real estate investing.
Below, we’ll walk you through some of the top options for non-accredited investors. They all offer real estate investment possibilities, but your minimum investment and the platform’s focus areas will differ from one to another.
1. Fundrise: Founded in 2012, Fundrise is a great entry point for new investors. You’ll need a minimum of $10 to start and you’ll have ownership in a portfolio of diverse properties. The expected return here ranges from 8-12%.
2. Groundfloor: Yet another exciting option, especially if you’re familiar with peer-to-peer lending. It specializes in short-term construction or renovation projects for single or multi-family homes. You only need $10 to get started and the projects run for 6-12 months.
3. Arrived: Want to own a bit of rental property without being a landlord? Arrived lets you do just this, allowing investment in specific rental properties for a minimum of $100.
4. RealtyMogul: In RealtyMogul, non-accredited investors can invest in public, non-traded REITs, which contain diverse commercial properties. The minimum investment is a bit steeper here at $5,000.
5. DiversyFund: Here’s another option allowing non-accredited investors to join in. DiversyFund offers a growth REIT focusing on multi-family properties. The minimum investment is $500 and they manage all the details for you.
6. Streitwise: With $5,000, you can be part of a commercial real estate portfolio through Streitwise. They focus on non-major city markets and have had a 9% dividend return since their start in 2017.
7. Modiv: Formerly known as Rich Uncles, Modiv offers non-accredited investors opportunities to invest in income-generating commercial real estate.
8. HappyNest: Known for making investing easy through a mobile app, HappyNest requires a low investment, starting with just $10.
9. Landa: Similar to Arrived, Landa allows non-accredited investors to buy shares of rental properties. The base investment required is just $5 (varies by property).
An alternative route to consider is REITs (Real Estate Investment Trusts), which also allow you to invest without needing to manage any property. You can purchase REITs on investing platforms like Public.com or Webull.
However, whichever platform seems most appealing to you, remember to do your own research and understand the risk associated with your investment. Take your time, evaluate your options, and consider your financial goals and objectives before making any decisions. Lastly and importantly, keep in mind that while real estate crowdfunding platforms offer a more accessible entry point, there are still risks involved, so it’s important to do your due diligence before investing.
