Real estate crowdfunding is on the rise as a new investment opportunity allowing anyone in the U.S. to easily invest in all types of real estate. It is opening up new doors for investment opportunity, and allowing those with interest in the real estate market to have a shot at making a buck off it.
Steve Hovland, the director of real estate research at HomeUnion was recently quoted in a U.S. News & World article on the subject, “Crowdfunding enables investors of all ages, risk profiles and wealth levels to acquire real estate for the first time. With as little as $5,000 down or in some cases even less, investors can buy a stake in a property. From residential projects to shopping malls to office buildings, the possibilities are endless.”
When a person directly owns any real estate property, they are typically limited because it is difficult to purchase more than one piece of property at one time. Yet, when you are associated with real estate crowdfunding, your limits with investment are much more open.
When you purchase a property, you are locked in. When you decide to become an investor vs. a buyer, you will have more flexible options of where you want your money. You will also have the option of choosing the type of investment you make. The investment option could be by either investing in the equity return for a new part of a share in a property. You could also invest in any debt investments that are tied to a mortgage.
One of the best benefits of real estate crowdfunding is the reduction in stress levels. Whenever you own a property, there are active factors that some people may not be interested in like the maintenance of a rental or having to be hands-on with a flip. Than Merrill, the owner of Fortunebuilders and former host of the TV show Flip this House states “Investors have to factor in all the costs involved, From buying the property to physical construction, as well as the interest paid to lenders if you’re financing the project.”There are plenty of surprise factors involved with flipping that should be addressed.
Whereas with Crowdfunding, “you can invest throughout the country and more easily diversify across property types, investment types and geographies,” so states Jilliene Helman, CEO and co-founder of RealtyMogul.
So before you make the decision to start real estate investing, make sure it is the best fit for you and your family. Everyone wants to make money, but in order to make money, you need to make the correct decision at the type of investment for you.