Investing in real estate, whether single-family homes or apartment buildings, used to be a pretty complex affair not too long ago. You had to go property hunting, do all the necessary research, maybe hire a real estate agent, and once you bought a property, there were all those costs and the hassle of managing a physical property.
But the good news is, with the recent rise of real estate investment platforms, there are now numerous ways to learn how to invest in real estate online. In this guide, I’ll explore the various avenues for online real estate investment and introduce you to some of the top platforms in this space. So, let’s dive into the world of how to invest in real estate online.
How To Invest In Real Estate Online
Investing in real estate offers an appealing opportunity to generate passive income and gradually build wealth over time. For newcomers, navigating the real estate market might seem daunting, but the good news is that there are various investment strategies to choose from, depending on your preferred level of involvement and risk tolerance.
What’s even better is that you can start your real estate investment journey without needing a substantial upfront investment. When approached correctly, real estate investment can be highly profitable, even in a climate of rising interest rates. It not only diversifies your investment portfolio but also offers the potential for a steady stream of passive income. The best part is that many lucrative real estate opportunities don’t require you to be on call for every tenant’s request.
However, for aspiring real estate investors, the big question is often: where and how should you begin? I’ll shed light on this by discussing some effective ways to make money in real estate online.
Among the primary methods of online real estate investment are Real Estate Investment Trusts (REITs) and fractional ownership crowdfunding platforms, and we’ll provide detailed insights into both of these alternative investments.
REITs
A Real Estate Investment Trust (REIT) is a unique investment vehicle designed to provide individuals with access to the real estate market without requiring them to directly purchase properties. REITs invest directly in various types of properties, either by acquiring properties or purchasing mortgages.
These REITs issue shares that trade on stock exchanges, allowing investors to buy and sell them like ordinary stocks.
REITs come in two main types: public and private. Public REITs are publicly traded on major stock exchanges, making them easily accessible for investors. In contrast, private REITs operate as limited partnership businesses.
While public REITs offer greater liquidity and typically have larger market capitalizations, private REITs tend to focus on smaller niches within the real estate market, potentially offering higher returns. Despite being less liquid, private REITs can provide investors with opportunities to target specific segments of the property market and better fit into your real estate investment strategy.
Real Estate Crowdfunding
Real estate crowdfunding has become quite the trend lately. It’s all about raising funds for property purchases from a big online community of investors. Whether you’re an individual or a business, you can tap into crowdfunding platforms and social media to gather the capital you need.
It’s not just a fad for the young and tech-savvy; real estate crowdfunding is gaining popularity across different age groups and investment preferences. With crowdfunding, you can team up with other investors online to buy property or a piece of it together, earning regular income in the process.
This modern crowdfunding approach offers an exciting way to diversify your investments into real estate. Investors make money in the form of dividends and capital appreciation at the time of sale. It’s like opening the door to property ownership and rental income with just a small initial investment minimum. Some even offer investment opportunities to nonaccredited investors.
Now let’s meet some of the best real estate companies helping people invest in real estate online.
EquityMultiple
EquityMultiple offers a unique blend of crowdfunding and traditional real estate investment methods, providing potential for attractive returns. Through its technology-driven platform, investors can participate in pooled investments, individual property acquisitions, or notes, with a minimum investment as low as $5,000.
Unfortunately, EquityMultiple is only open to accredited investors. They offer access to diversified portfolios resembling Real Estate Investment Trusts (REITs) or direct investments in specific commercial properties or real estate notes.
Fund Investing mirrors the structure of a traditional REIT, bundling multiple assets into a single fund to deliver diversification. They have various REITs to fit various strategies, including Debt, Equity, Opportunity Funds, and Commercial Real Estate (CRE) Securities.
On the other hand, Direct Investing offers a more personalized approach, allowing fractional ownership of individual commercial properties. Once a sufficient number of investors contribute, the investment commences, offering distinct projected returns and exit strategies tailored to each property.
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Fundrise
Fundrise is a platform bridging the gap for individual investors to dive into commercial real estate. Through its innovative eREITs, or real estate investment trusts, Fundrise is democratizing access to private real estate investments, once reserved for elite investors.
The platform offers three primary investment plans: Supplemental Income, Balanced Investing, and Long-Term Growth, each are a unique blend of eREITs and eFunds. These investment vehicles function akin to exchange-traded funds (ETFs), with eREITs mirroring traditional REITs and eFunds focusing on long-term growth rather than immediate income.
Investing with Fundrise grants you exposure to both private eREITs and eFunds, making sure you have a diversified portfolio that yields quarterly dividends and appreciates in asset value over time. Within Fundrise, investors can opt for either the Income eREIT or Growth eREIT.
The former concentrates on debt investments in commercial real estate, providing a steady cash flow with a current dividend slightly above the market average. The Growth eREIT targets assets poised for substantial appreciation, offering a lower dividend but the potential for significant wealth creation.
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First National Realty Partners
First National Realty Partners offers accredited investors a unique opportunity to tap into the lucrative world of commercial real estate, providing quarterly positive cash flow through fractional ownership of grocery-anchored properties nationwide.
Their innovative approach centers on tenant satisfaction, with each property boasting a retail space anchored by a renowned national brand such as Walmart, Dollar Tree, or Aldi. This tenant-centric strategy helps stability and performance across their institutional-quality portfolio.
These properties are strategically valued below replacement cost, which allow First National Realty Partners to devise exit strategies involving either a sale or refinance within a 3 to 5-year timeframe. This dual approach ensures investors not only enjoy regular quarterly distributions but also benefit from capital appreciation over time.
Investors can opt for participation in a real estate fund, such as the Opportunity Fund, which has a slightly higher minimum investment requirement of $50,000 and guarantees access to First National Realty Partners’ premium offerings.
Click Here to explore First National Realty Partners’ offerings further.
Get Started with First National Realty Partners