If you’re thinking about getting into real estate investing, it’s not as simple as jumping in with your money. You need to do some research, figure out what kind of investor you want to be, and choose the best route for you. Real estate crowdfunding websites are a great starting point for beginners.
These platforms let you start by investing smaller amounts of money. They also help you get a better understanding of real estate investing in general. Over time, you can not only make good returns but also identify the type of investor you want to become. Plus, investing in these platforms can create significant passive income.
At the beginning of your real estate investing journey, you’ll be considered a non-accredited investor. This means you’ll have more restrictions on where you can invest, and some crowdfunding platforms won’t allow you to invest until you become an accredited investor. However, by continuing to invest through crowdfunding, you might eventually achieve accredited investor status.
To become an accredited investor, you need to earn at least $200,000 annually for the past two years, and you should expect to make the same for the current year. Although this can be a tough milestone for beginners, it’s possible over time. You also need a net worth of at least $1,000,000. As a non-accredited investor, you might encounter higher fees and lower returns on investments (ROIs), but it can still be worth it. Crowdfunding platforms are often easy to start with, making them an attractive option.
If you decide to explore real estate crowdfunding, you’ll find many options out there. Not every website will suit you, so it’s important to find one that matches your personality and goals. Here are three platforms I recommend for newbies.
Fundrise is a top choice for non-accredited investors. It offers a range of options, requires low initial investments, and has fairly high ROIs. In addition to potentially good returns, they charge a straightforward annual flat fee of just 1%.
Groundfloor is different from Fundrise in that it lets you choose specific loans to invest in. It requires a much lower initial investment and offers shorter-term requirements than most real estate crowdfunding sites. It doesn’t charge any investment or management fees, and the average ROI is about 10%.
Finally, Rich Uncles is another excellent option. Although it has a slightly different structure and fewer investment choices compared to the other two, you can start with just $5. However, keep in mind that their investment fees, ranging from 1% to 3% for the first three years, are the highest among the three.
To wrap up, investing in real estate through crowdfunding sites can open many doors. Before you pick a platform, you should consider key factors like your initial investment capacity, risk tolerance, investment timeframe, long-term goals, and whether you prefer passive or active management of your funds.
Starting in real estate investment may seem intimidating, but choosing the right crowdfunding platform can make the journey both rewarding and worthwhile. There’s no better time to start than now, and with the right tools and knowledge, you’ll be on the path to success quickly.
Have you ever tried using real estate crowdfunding platforms? We’d love to hear about your experience!