Real estate investments used to be limited to wealthy landlords able to afford individual investment properties. But real estate crowdfunding platforms bring many of the benefits of real estate investments to the masses, including non-accredited investors. If you understand the risks and potential returns, a real estate crowdfunding site could be the best way to get started.
Category: 5. Best real Estate crowd funding sites
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To zero in on the best real estate apps, we combed through the real estate crowdfunding industry, looking at a range of features and statistics. Among the most important considerations were accreditation requirements, minimum investment requirements, pricing and fees, past performance, and available investments.
Keep in mind that real estate platforms may change their rules at any time. And past performance is no guarantee of the future.
The real estate market has unique risks and opportunities. So while it could be an excellent choice for many investors, it could be a poor choice for others. Before investing your own money through these or any other real estate crowdfunding platforms, it’s wise to spend time reviewing costs, investment strategies, and investor requirements.
Every real estate crowdfunding app has a similar goal – help you earn a high return on your investment. However, different strategies, fee structures, and investor requirements could lead you to pick one platform over another. These are the most important criteria to consider when choosing a real estate crowdfunding platform:
- Accredited investor requirements: Some real estate crowdfunding services require you to be an accredited investor. That means having a household net worth of at least $1 million, excluding your primary residence, or an annual income of at least $200,000. You can read our guide on the best real estate investing sites for non-accredited investors if you want to narrow your options.
- Minimum investment: Some platforms allow you to invest starting with as little as $10, while others require $100,000 for some investments. Your investment size may dictate which platform you choose.
- Investment strategy: Every real estate crowdfunding service has its own philosophy and investment strategy. Some offer funds, often structured as a real estate investment trust (REIT). Others give you direct investment opportunities. And, going further, they may focus on different types of properties, follow a unique underwriting strategy, and a debt or equity focus, impacting long-term results.
- Management fees: It’s reasonable to pay a company for picking properties and managing them. But you won’t want to give up too much of your investment gains for fees.
- Required investment period: Unlike the stock market, real estate crowdfunding investments may require years of waiting before you’re able to sell. If you may need the money sooner, real estate crowdfunding may not be the best choice.
- Risk: All investments carry some level of risk. Spend the time to evaluate the risk and potential return to decide if the investments are a good fit for your overall portfolio strategy and risk tolerance.
When you invest in the stock market, you’re betting on the financial success of that business and its ability to continue earning profits for years to come. When investing in real estate, each property is its own business in a way. Every property has its own risks, cash flow, and appreciation prospects.
Every real estate market is unique, and every investment opportunity is different. Two identical buildings in different cities will see different results. Market demands, interest rates, and tenants are just a few of the complex factors that lead to success or failure with an investment property.
Minimum Investment: $100
Fees: 1% annual management fee
Accreditation Requirement: None
Why We Chose Arrived Homes: Despite being a newer player in the real estate crowdfunding world, Arrived Homes had to make our list of the top sites. That’s because it lets anyone invest in income-generating residential real estate starting with just $100. It’s also completely passive since Arrived Homes works with contractors and property managers to handle rental units.
We really like Arrived Homes since it also lets renters invest in their own homes to become co-owners. This means tenants often have a vested interest in maintaining properties, leading to fewer repair costs. To date, the platform has paid 3.2% to 7.2% in annual dividends. However, this doesn’t factor in potential property appreciation since the company only began in 2019.
Fees: You pay 1% in annual management fees as an Arrived Homes investor. There’s also a one-time sourcing fee that Arrived Homes charges, and listings outline what this fee is.
Minimum Investment: $50,000
Fees: Management fees of 1% to 2% plus administrative and acquisition fees
Accreditation Requirement: Yes
Why We Chose Origin Investments: If you want to invest $50,000 or more in private real estate funds, Origin Investments is one of your best options. This real estate crowdfunding platform is open to accredited investors and has a variety of funds, including growth funds, income-generating funds, and debt-based funds.
According to its website, Origin Investments has seen an average of 24% gross internal rate of return (IRR). If you’re looking for various tax-advantaged real estate funds to invest in and are accredited, Origin Investments is worth considering.
Fees: Origin Investment charges a one-time administrative fee of up to 2%, management fee of 1% to 2%, and a 0.50% one-time acquisition fee. How much you pay in administrative fees depends on how much you invest.
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Roofstock
Minimum Investment: $
Fees: 0.5% or $500
Accreditation Requirement: None
Why We Chose Roofstock: If you’ve ever wanted to become a landlord, Roofstock could be the solution you’re looking for. It lets you invest in single-family rental properties whereas most crowdfunding platforms focus on commercial real estate or multi-family homes. This lets you invest in income-generating rentals, and you can even have Roofstock manage the property for you with its network of property managers to keep things passive.
There’s no minimum investment or accreditation requirements. However, financing terms likely require a decently sized down payment in the 20% to 30% range, so keep this in mind.
Fees: Roofstock charges $500 or 0.5% for investors, whichever is higher.
Minimum Investment: $5,000
Fees: Typically 0.5% to 1.5% in annual fees
Accreditation Requirement: Yes
Why We Chose EquityMultiple: Another leading company in the real estate crowdfunding space is EquityMultiple. As for why it’s made our list, EquityMultiple has a range of equity, preferred equity, and debt-based deals you can choose from. It also targets high-yield projects that are professionally managed, and according to its website, it’s seen a historical net rate of return of 18.7%.
There’s a $5,000 investing minimum, and you have to be accredited. But many deals have short target hold periods as well, so it could be a viable short-term investment which isn’t always viable in real estate.
Fees: You typically pay 0.5% to 1.5% annually for equity investments and around 1% for debt investments. It also takes 10% of all profits.
Minimum Investment: $5,000
Fees: 2% annual management fee
Accreditation Requirement: None
Why We Chose Streitwise: If you’re looking for dividend income, Streitwise is one of the best real estate crowdfunding sites you can use. It offers private REITs starting at a $5,000 investing minimum and has paid out 9.2% in annual dividends on average since its inception in 2017.
Streitwise is open to non-accredited investors as well, which is an advantage. You get paid quarterly dividends, and overall, Streitwise is a popular inflation investment since you can potentially hedge against inflation while generating quarterly income.
Fees: You pay 2% in annual management fees with Streitwise.
Minimum Investment: $5,000
Fees: 1% annual management fee
Accreditation Requirement: None
Why We Chose RealtyMogul: Like CrowdStreet, RealtyMogul provides another easy way to invest in individual real estate deals or in various REITs. And the $5,000 investing minimum is much lower, and its REITs are open to non-accredited investors as well.
RealtyMogul’s REITs are one of its main selling points. It has an Income REIT as well as an Apartment Growth REIT that investors can explore.
Fees: Annual management fees typically range from 1% to 1.25% for various deals. You can also pay additional REIT fees.