Real Estate

Best Crowdfunding REITS – Real Estate Crowdfunding Investment Platforms

Real estate crowdfunding has transformed the real estate investing landscape. Once reserved for only the most affluent investors, many crowdfunding platforms have significantly lowered the barrier to entry for this type of alternative investment.

Low account minimums, simple fee structures, and clean user interfaces make it easier than ever to include real estate in a well-diversified portfolio. It’s important to note that some real estate crowdfunding platforms, including some of our picks below, are open only to accredited investors.

What’s the difference between these platforms and REITs?

Real estate investments trusts are companies that own real estates, such as hotels, malls, shopping centers, or rental properties. Publicly traded REITs can be purchased through a brokerage just like individual stocks or mutual funds.

Real estate crowdfunding platforms, on the other hand, pool funds together to let average investors participate in the real estate market through private REITs — which aren’t available through traditional brokerages — as well as private market real estate investments, like individual properties. These could potentially provide higher returns than the REITs available through traditional brokerages, but they may also carry higher risk.

Ready to get started? Below are our top picks for the best real estate crowdfunding platforms based on several factors, including account minimums, customer support, redemption options, fees, and more.

The best real estate investment platforms of March 2022

Real estate investing can sound intimidating, but it doesn’t have to be. Real estate crowdfunding platforms make it easier to add commercial properties and other real estate investments to your portfolio at low costs.

Some of the most common investments these platforms offer are real estate investment trusts (REITs), electronic real estate funds, and non-traded REITs. A REIT is a company that owns and operates income-producing real estate assets. Most REITs are available on stock exchanges, but you can only buy non-traded REITs (REITs that don’t trade on stock exchanges) through brokers or financial advisors. Real estate funds are mutual funds that invest in different types of real estate securities provided by real estate companies. 

But account minimums, management fees, and investment options vary for each platform. And while some real estate investing apps serve all investors, regardless of their net worth, others may only accept accredited investors (individuals who’ve got a net worth of at least $1 million).

To help you narrow down your decision, we’ve compiled a list of the top real estate investing apps. Keep reading to find the best fit for you.

Fundrise

Why it stands out: Fundrise lets you start investing in real estate with as little as $10, and the app offers eREITs and electronic real estate funds. The $10 minimum investment grants you access to the company’s Starter Portfolio, which invests your money in a range of US real estate projects. 

The next step up is the Basic account level. With a $1,000 minimum requirement, this account gives you all of the Starter account level’s perks plus goal-based investing and IRA investing.

In addition, Fundrise offers a higher account level, Core portfolios, with even more features. If you can afford to invest at least $5,000, you’ll be able choose between additional investment strategies and account perks. Core portfolios offer three investment plans — Supplemental Income, Balanced Investing, and Long-term growth. Each plan offers a different mix of investments that are designed to meet various growth and income-focused savings goals.

With a minimum of $10,000 to $100,000, you can also take advantage of Fundrise’s advanced and premium account levels. These function as add-ons to the Core plan and allow you to utilize more complex real estate strategies and investments.

What to look out for: Real estate investments are highly illiquid, meaning you won’t be able to readily convert your investment (s) into cash like you would with a stock. Fundrise realizes this. That’s why it has a minimum investment term requirement of five years.

If you can’t afford to let your money sit for at least five years, Fundrise probably isn’t the best option for you.

DiversyFund

Why it stands out: Like Fundrise, DiversyFund offers a low $500 account minimum. Similarly, the company manages your real estate investments for you, and it offers its services to both non-accredited and accredited investors (an accredited investor is an individual whose net worth is at least $1 million). But, unlike Fundrise, this investment app costs you absolutely nothing in management fees. This means you’ll pay 0% for your investments.

DiversyFund solely offers its own Growth REIT which invests in multifamily properties. This means that the robo-advisor owns and manages all of the real estate assets you’ll be investing in. 

What to look out for: You cannot withdraw or cash out your investments until your minimum five-year investment term ends. This is because DiversyFund reinvests the dividends and earnings your investment generates until the real estate asset is sold.

If you’re considering DiversyFund, you should also note that the platform only offers REITs as investments. This means you won’t be able to invest your money in any other investment options or account types.

Roofstock

Why it stands out: Roofstock is another unique real estate app. This company actually lets you invest in single-family rental properties. Once you purchase a property, you don’t have to worry about being left out to fend for yourself — Roofstock assigns a property manager to each rental.

Properties are usually tenant-occupied, and property managers are there to assist you as you earn monthly rental income. 

Roofstock also offers self-directed IRAs, and you can invest in fractional or full property interests with Roofstock One if you’re an accredited investor. (An individual with a minimum networth of $1 million or annual income of $200,000, or $300,000 for couples).

What to look out for: The downside is that this could be more expensive than investing in a REIT or other real estate fund, since you’re actually purchasing and making down payments on properties. Another thing to note is that while Roofstock is launching a Roofsavvy mobile app for iOS users, it doesn’t currently have any mobile apps available.

RealtyMogul

Why it stands out: RealtyMogul makes real estate investing accessible to everyone. You can even invest if you aren’t an accredited investor, but you’ll need a minimum of $5,000 to begin. And as for your investment options, RealtyMogul lets you purchase stake in commercial real estate through three ways: REITs, single properties, or 1031 private placement investments. 

As for cost, single properties (also known as private placements) are only available to accredited investors. For these properties, RealtyMogul requires investment minimums ranging between $15,000 and $50,000. Both accredited and non-accredited investors can purchase the company’s REITs with as little as $5,000. But for 1031 exchange investments, you’ll need between $25,000 and $50 million to get started (a 1031 exchange is a tax loophole that allows you to avoid capital gains taxes when you sell an investment property and reinvest any earnings into a similar property).

The real estate app also offers automated investment management through its auto-invest feature. But this is only available if you invest in one of the company’s REITs (MogulREIT I or MogulREIT II). In addition, you can use funds from your IRA to invest in REITs. 

What to look out for: You’ll need at least $5,000 to invest in REITs, but other investments — such as individual properties and 1031 exchange investments — have minimums ranging from $15,000 to $50 million.

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