The amount of money and responsibility it takes to invest in real estate traditionally keeps many people away from this type of investment. However, there’s another option for you if you’re interested in real estate investing: crowdfunded real estate investing...
The following post is by MPFJ staff writer, Laurie Blank. Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.
Do you know what crowdfunded real estate investing is? Many people who are interested in investing in real estate don’t ever make the leap. There’s a lot of reasons for this.
Investing in real estate traditionally can be daunting. You need to have a large down payment to purchase a rental property; often 30 percent or more.
Then there’s the process of finding suitable tenants. After that, you’ve got to ensure those tenants pay their rent each month. Additionally, you’ve got to provide maintenance and upkeep for the home.
The amount of money and responsibility it takes to invest in real estate traditionally keeps many people away from this type of investment. However, there’s another option for you if you’re interested in real estate investing: crowdfunded real estate investing.
About Crowdfunded Real Estate Investing
In a nutshell, crowdfunded real estate investing is basically a lot of people putting some money into a large pot. From there, experienced investors take the money and buy (hopefully) profitable real estate ventures such as apartment buildings, student housing buildings, and commercial buildings.
The rent collected from those purchases is then used to pay expenses. Any profit is divided among the pool of investors.
Investing in crowdfunded real estate companies gives people with all sizes of wallets an opportunity to increase wealth via real estate investing.
Most people could never fund real estate investing in an apartment complex or other large rental building. However, most people can usually save up a bit of cash every month to pool with others to purchase those types of rental buildings.
Here’s some information about some of the more well-known crowdfunded real estate investing companies and what you need to know to start investing with them.
Rich Uncles
Rich Uncles was founded in 2012 and is open to accredited and non-accredited investors. I’ve been investing personally with Rich Uncles for nearly a year now. One of the reasons I chose Rich Uncles is because of their BRIX REIT. The BRIX REIT investment focuses primarily on student housing for colleges and universities and multi-family housing.
The annual return on the BRIX REIT is averaging six percent as of this writing. That’s nearly triple what you’ll earn with most high-yield savings accounts.
Possibly the most attractive feature of the BRIX REIT is the minimum investment amount: $5. Yes, I said five dollars. That makes this crowdfunded real estate investing option affordable to almost anyone.
The BRIX REIT is open to residents worldwide.
Another investment Rich Uncles offers is the NNN REIT. This investment focuses on industrial and retail properties and has an annual return of seven percent.
However, the minimum initial investment for this REIT is $500. Also, this investment is only available to residents of certain states. However, it’s another affordable investment for many people.
Fundrise
Fundrise has been in the crowdfunded real estate investing business since 2010. Their investments are open to accredited and non-accredited investors from all 50 states.
Fundrise offers baskets of portfolios to investors that consist of both commercial and residential properties. Some examples include commercial developments, apartment developments, and residential construction.
You’ll need a minimum of $500 to start investing with Fundrise. Their current annualized average return as of this writing is 6.55 percent.
RealtyMogul
RealtyMogul was founded in 2012 and is available to both accredited and non-accredited investors. The minimum investment with RealtyMogul is $1,000.
RealtyMogul offers a variety of different investment choices. Their average annualized returns as of this writing range between 4.5 percent and 8 percent when investing with their MOGULREIT I and MOGULREIT II.
Summary
There are many ways to grow wealth. However, real estate investing seems to be among the most popular. Crowdfunded real estate investing opens this popular investment avenue to most everyone.
Even if you can only start by investing $5 a month, it’s still a start. Do your research and consider whether crowdfunded real estate investing is for you.
***Photo courtesy of https://www.google.com/search?as_st=y&tbm=isch&hl=en&as_q=real+estate&as_epq=&as_oq=&as_eq=&cr=&as_sitesearch=&safe=images&tbs=sur:fc#imgrc=UZz1V4R8Pk4f-M:
