You don’t need a pile of cash to start investing in real estate. In fact, just about anyone can invest in real estate with as little as $10.
Crowdfunding has opened up this asset class to investors that don’t want to put up a large amount of money to buy a property or spend the time and energy needed to be a landlord.
Real estate crowdfunding allows investors to contribute a portion of the money needed to fund a deal while the sponsor takes on the responsibility of managing the asset. This has made real estate investing a lot more attractive to passive investors who want to take advantage of the high returns and security that real estate can provide.
$500 Minimum Investment: DiversyFund offers shares of its multifamily real estate portfolio to both accredited and non-accredited investors for only $500. You can also set up recurring investments to grow your equity over time.
$100 Minimum Investment: Arrived Homes is one of the newer crowdfunding platforms on the market and offers shares of income-producing rental properties with a minimum investment of only $100. The company handles property management and sends out quarterly distributions to investors.
$10 Minimum Investment: That’s right, you can even start investing in real estate with as little as $10. Groundfloor provides short-term hard money loans to real estate investors and home builders for the renovation or construction of residential properties. The company then sells portions of these loans to investors in increments of $10 on its platform. The loans are secured by the underlying properties and come with interest rates between 6% and 12%.
Should You Invest In Real Estate Crowdfunding?: The decision of whether or not to invest in real estate through crowdfunding depends on your overall investment goals and how long you’re willing to leave your money tied up. Real estate investments are illiquid, so your shares can’t be sold if you need to access your funds before the end of the investment term.
DiversyFund and Arrived Homes are both long-term investments, so you’ll need to keep your money invested for at least five years. Groundfloor investments typically have a term of only six to 12 months but can end up being longer if the loan isn’t repaid on time.
Overall, if real estate is an asset class you want to invest in then crowdfunding is a great option. You can leave the hard work to the sponsors with years of experience and simply reap the rewards.
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