When it comes to investments, you likely grew up hearing about how real estate is the ultimate hard asset with intrinsic value. Of course, you have also been through the recession and have seen how the vagaries of economics can challenge even the most stable of assets to retain its value. But what if there were a way you could get in on real estate investments with less risk? What if you didn’t need hundreds of thousands of dollars to get started?
It is all possible now, thanks to the growth of a new real estate investment industry: crowdfunding.
What is Real Estate Crowdfunding?
Most people are at least somewhat familiar with the broad concept of crowdfunding, where many participants invest in the development of a product, service or project, distributing the risk and sharing the benefits. Real estate crowdfunding is that exact same concept applied to the development and construction of brick-and-mortar structures.
Real estate crowdfunding has evolved quite a bit since its early days. Before crowdfunding, very few people actually had the opportunity to invest in real estate projects. Those who did needed at least $100,000 and the right network of connections to discover projects which were a good fit for them. You also had to be an accredited investor as recognized by the SEC.
But now that real estate crowdfunding exists, the SEC has changed its rules, and non-accredited investors are allowed. It is now possible to invest in real estate as an average consumer with as little as $1,000.
Benefits of real estate crowdfunding include:
• As a hard asset, real estate has intrinsic value.
• The amount of land on the planet is finite, which means that scarcity ups the value of your investment.
• If the property you invest in is rented out, there will be a steady cash flow.
• There are many different projects which you can invest in, and it is easy to find opportunities which match your interests and the funds you have available to invest. You no longer need access to a network of connections; you do not need to know anyone in the industry at all.
• Crowdfunding does give you an “in” when it comes to building those connections if you want them. Many projects even allow investors to chip in with their input, working directly with developers to make decisions about real estate.
• You do not need to be accredited, and you can get started with very little money.
All of that being true, every form of investing has its drawbacks, and real estate crowdfunding is no exception. You already know from the recession that even hard assets can decline significantly in value. They also do not offer much in the way of liquidity, and there is a higher risk of default from developers.
If you do decide to invest in real estate and you choose your crowdfunding projects carefully, it can pay off handsomely. But you should know that there are a lot of crowdfunding sites for real estate cropping up on the web these days, and not all of them are equal. So before you get started, you should read real estate crowdfunding reviews.
Still not sure where to begin? Fundrise is one of the top companies right now. Their website makes it fast and easy to identify real estate projects which are an appropriate investment given your funds. You can get started with just $1,000. Read a Fundrise review to learn more.
Investing in real estate carries risks, but it can pay off in huge ways. Thanks to the development of crowdfunding, these opportunities are now finally accessible to everyday consumers. You no longer need to risk $100,000. Get started by clicking on the links above. Read some reviews, choose a platform which suits your needs, and make your first real estate investment with as little as $1,000!