While real estate crowdfunding is becoming more of an option for both novice and expert real estate investors, for many years, real estate syndication has proven to work. But, technology has come along and made it easier for real estate investors. Along the way, real estate crowdfunding was born. We’ve all heard of these crowdfunding websites. So, what exactly is real estate crowdfunding? What are the best real estate crowdfunding websites any real estate investor can use?
Real Estate Crowdfunding Defined
Before we get into the best real estate crowdfunding websites that are available, we have to understand what it means. Real estate crowdfunding is an advanced form of real estate syndication. Consequently, real estate investors pool their money to make bigger real estate investments. For instance, an investor who has $100,000 can invest in a project worth millions of dollars of investment instead of buying an investment property for that amount.
What happens is that the real estate developers advertise their projects on crowdfunding websites. On the real estate investor’s side, he/she can view those ads for investment properties and choose the right fit.
Real Estate Crowdfunding: Should or Shouldn’t?
Debating the upside and downside of any investment stream should be a constant practice when real estate investing. You will be able to find the best real estate crowdfunding channels to pour cash into.
Why you should go for real estate crowdfunding
- There’s no investment too small or too big.
- Real estate investors can contact the developers and give insights.
- The real estate investor decides what’s best and what development project is the best fit.
- A wide selection of investment opportunities. You will find something to fit your needs.
Why you shouldn’t go for real estate crowdfunding
- Same amount of risk as any real estate investment venture. Depending on the real estate market, your revenue will fluctuate.
- Higher risk of developers default than peer-to-peer investing.
- Not the most popular stream of investing; can reflect on liquidity.
All things considered, you can begin searching for the best real estate crowdfunding channels to put your money in. Keep in mind the return on investment is all that matters. If a certain project brings you the highest return on investment rate, you should most likely invest in it. Yet, don’t be hasty and study all aspects and opportunities before making up your mind.
Besides that, real estate investors mustn’t treat real estate crowdfunding any different than buying an investment property. It can be a low risk investment and a high risk one as well. So, do your due diligence and take your time to study your options.
So, What Are the Best Real Estate Crowdfunding Websites Available Today?
It only makes sense that crowdfunding real estate falls under the category of passive real estate investing. Of course, real estate crowdfunding channels fall under two categories:
- Crowdfunding for accredited investors: The SEC determines the requirements.
- Crowdfunding websites for non-accredited investors.
Here is a list of the top websites that accept non-accredited and accredited investors:
Fundrise pops up at the top of most real estate crowdfunding lists. It’s one of the best real estate crowdfunding websites developed for raising capital. You can invest as little as $500 into what you see best fits. Additionally, you can enjoy a high return on investment with an average yearly dividend of 8%.
Both accredited and non-accredited investors can invest through this encompassing channel. With Fundrise, you don’t have to choose a specific investment or development. Fundrise takes care of all that for you!
GroundFloor also offers an investment opportunity for both accredited and non-accredited investors. It offers you more details with your choice of investment. You can choose the loan plan and even specific projects.
Their average return on investment is 10% and you can invest as little as $100. Moreover, GroundFloor is a limited recourse obligation. This is very important as it limits your liability in the case of a loss on investment.
Holdfolio is also one of the best real estate crowdfunding websites available. The lowest investment they accept is $10,000 but they diversify your investment into many investment properties. They distribute dividends quarterly and their average return on investment is 10%- a pretty impressive figure. Their real estate investment network makes for a safe and reliable investment. Don’t forget the high ROI.
The website makes use of an investment property calculator to find the best possible investment property.
Even if you’re not going for one of the best real estate crowdfunding websites available, you can use an investment property calculator to give you any details you need about a future investment. Take Mashvisor’s investment property calculator as an example. You can know the return on investment, cash on cash return, and even the cap rate of any property. Click here to make use of the 14-day free trial with Mashvisor.
These three are among the best real estate crowdfunding websites available in the market today. Of course, there are more real estate crowdfunding websites; we choose to list the most popular ones on the web today. In fact, if you wish to take a look at more real estate crowdfunding websites, read this: The Best Real Estate Crowdfunding Sites.
With residential real estate investing becoming so rewarding, you should do your due diligence and invest in real estate. If you don’t know where to begin, choose one of the best real estate crowdfunding websites and begin investing for your future.
If you have any more insights, please feel free to share them with us in the comments section.