Real Estate Crowdfunding
Real estate crowdfunding is a type of real estate investment that brings together a group of online investors for a direct ownership in property and other investments. It is a low-risk, high-return investment that can be a good choice for those with small amounts of money to invest. However, before investing in any particular property, investors should take some time to review the pros and cons of each platform.
One of the main advantages of crowdfunding real estate websites is that it allows investors to earn dividends from properties that they own directly. There are also options for investing in commercial and multifamily properties. Some crowdfunding platforms even allow investors to make REIT (Real Estate Investment Trusts) investments.
Real estate crowdfunding has become one of the most popular forms of real estate investment. Although the process is relatively new, it is still growing in popularity. Most platforms only accept accredited investors, but there are some that allow non-accredited individuals to invest. Many are looking for the best rates of return in this type of investment.
Real Estate Crowdfunding Comparison
The most well-known real estate crowdfunding platforms are PeerStreet and EquityMultiple. These two companies offer both direct ownership and REITs. In addition to these, there are also other crowdfunding platforms that are less well-known.
Unlike REITs, most crowdfunding deals require investors to commit to a one-year commitment. They must also pay fees that range from 5-7% of their total capital. If you’re considering a deal, read the PPM carefully and understand the fee structure.
The downsides of crowdfunding include the risks of individual projects. This can include construction and business risk as well as underwriting and management risk. Individual investments are subject to the recency effect, which means that their value will be influenced by recent events.
Compared to real estate crowdfunding, REITs provide higher returns but are also more volatile. Because REITs trade publicly on stock exchanges, shares of a specific company can fluctuate in value throughout the day. A REIT issuer must pay out 90% of its profits to its shareholders. Additionally, a REIT will have certain tax benefits.
For a variety of reasons, some investors prefer to invest in REITs. Others may be better off with other forms of real estate investments. Still, some investors are better suited to real estate crowdfunding.
PeerStreet is a crowdfunding real estate websites debt investment platform. It is the first two-sided marketplace to offer investors the opportunity to earn rewards from mortgage loans. Investors can also invest in short-term hard money loans. Unlike other platforms, PeerStreet is not limited to accredited investors. Nonetheless, if you are an accredited investor, it is recommended that you consider their offerings.
Lastly, equityMultiple is a co-investing platform. You can choose to invest a minimum amount of $25,000. EquityMultiple has a variety of investment opportunities, including individual and REIT properties. It is important to note that many of the investment opportunities do require a minimum investment of $10,000.
With these comparison tables, you should be able to find the right platform for you. But no matter which real estate crowdfunding platform you choose, keep in mind that a few things remain constant.
