We use affiliate links. If you purchase something using one of these links, we may receive compensation or commission.
Let’s Get Started
Real Estate CrowdFunding – An Alternative to Traditional Real Estate Investments
Have you ever wanted to get into real estate but didn’t have a ton of cash? Maybe you didn’t want to play landlord or deal with many of the time consuming tasks and traditional headaches and pitfalls that come with being a real estate owner.
Crowdfunding is a way to get in without a ton of cash and overhead of managing a property in a more passive than active role. What do I mean by that? Simply put for a small fee per month this is typically a percentage such as 1-1.5% on average. The benefits all the property upkeep, maintenance, management, and other challenges are handled by a team for you such as property managers. You invest and get the returns in the form of dividends and capital gains when property sells. Your investments can vary between equity, debt, and other forms of investing to meet those goals and criteria to maximize your returns and minimize risk.
I have used CrowFunding platforms over the years and some of my favorites include: Fundrise and GroundFloor. They have a pretty strong track record with both being new but being around about a decade or so with returns averaging around 10% which is pretty good despite the economic shifts and high inflation at the time of this writing.
They also are an avenue to continue to build your real estate portfolio without dealing with high interest rates in an uncertain market of buyers and sellers. I myself have been going this route in the interim to continue building my assets in real estate and giving my portfolio exposure for growth without having high capital upfront or competing with high cash bidders or interest rates being unfavorable.
Pros:
-Easy to get into the market and participate
-Low threshold for capital needed to start
-Many options outside of doing REITs and many have strong returns of 10% or more on average
Cons:
-Investments are held for longer-term usually at least 3-5 years or when the provider allows them to be liquidated
-Some have higher fees to manage portfolio
-Some funds don’t have as much flexibility to manage or create your own choices
Questions to Ask/Research
What are you all doing to build your real estate portfolio? Are you buying traditional assets or doing crowdfunding? Maybe you’re doing a combination of the two?
Sound off in the comments below!
Keep on leveling your life! Finances is a part of that story
#lifeleveler, #personalfinance, #realestate, #buildwealth, #crowdfunding