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Invest with Real Estate investing Apps for beginners
Looking to invest in Real Estate, but outside the status quo?
You are probably familiar with the traditional real estate apps and websites for buyers and sellers.
These Apps include sites like Zillow, Trullia, Realtor.com and others. Buyers and sellers have been using these platforms to sell, find and estimate the value of properties.
For Real Estate investors who are not wealthy individuals or those who don’t want ownership of physical properties, you now have the investing Apps.
These crowdsourcing Apps have been a disruptor to the status-quo in real estate and are growing steadily.
They have open the doors of traditionally closed private Real Estate ventures to regular people.
It turns out many are interested in diversifying investments thru Real Estate, but without outright purchase and without a lot of money.
Using many of these Apps you can learn investing as you go. However, the real estate Apps take most of the guessing game out of the equation.
There are mainly two ways for making these investments. One, investing in specific projects where the loans are backed by physical properties. The other is by investing in a Real Estate fund or REIT.
Even though technology has changed the real estate market, you should do your homework before investing in these private ventures.
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These are some reasons why many are turning to the Apps to invest in Real Estate
- Easy to invest in Real Estate – low cost
- Able to buy fractional shares – low start up principal
- Able to rely on experts who have already picked specific projects
- Able to invest in specific properties – compared to REITs where you can invest in real estate thru a larger Trust.
- Able to participate without becoming a landlord
Things to keep in mind as a DIY beginner investors in Real Estate using the APPs.
- This market is still going thru growing pains – some Apps have failed and some are riskier than others
- Your investment is not as liquid as investing in traditional REITS or the stock market
- Although some of these APPs have gained popularity due to their “higher” returns, these are not guaranteed
- Investing in specific properties may increase risk of default
- Your investment time horizon should be at least 5 years, generally
5 key questions you should answer before investing in any of the Apps
- The minimum investment required
- The average and expected rate of return
- What is the time horizon for the particular investment
- How are redemptions handled
- The Fees schedule
If you are considering investing in real estate using a crowdsourcing App, these five Apps are geared to beginner investors.
DiversifyFund For Income
This investing platform specializes in Real Estate alternative investments. One of the most attractive feature of this App is that it doesn’t charge management fees.
DiversifyFund is an option for regular people to diversify like the wealthy, in the Real Estate private market.
This App allows you to invest in multi family units which produce rental income.
You can open an account in DiversifyFund with at least $500 and there are no net worth restrictions.
Like with all other Real Estate Investment Apps, DiversifyFund is a long term play. Because the underlying assets are physical properties, this market does not offer short term liquidity.
Fundrise Real Estate Investing
Fundrise is a good platform for beginner investors because of its low initial requirement. You need to open an account with a least $500 to start investing.
The platform’s fixed management fees of .085% and .15 advisory fee, plus the 90-days money back guaranteed also makes it attractive for individual investors.
Investing in real estate takes time to payoff, for this reason these investments are long term.
Your time horizon should be at least 5 years. Although Fundrise claims to allow premature redemptions, these are not guaranteed.
RoofStock Passive Income Investing
Real Estate investing for rental income has always been a way to create cash inflows and enjoy appreciation in property values.
Instead of buying a property using a real estate agent, you open an account at RoofStock to buy, sell and rent thru the platform.
The minimum amount to invest in this platform is $5,000. The management and advisory fees are 8%+.
RoofStock offers a 30-days money back guarantee.
Groundfloor for Real Estate Loans
Groundfloor first funds every loan before opening them up to investors. So, the business due diligence has been done before you get to invest.
These loans are typically made to Real Estate entrepreneurs and Groundfloor owns and service them.
The company claims a 10 present average return for shorter term loans, 6 to 12 months length.
The minimum investment is very low at $10 and no investor’s fees.
Considering the low required investment and the no fees features, you should learn about the rate of loan defaults.
Streitwise for Passive Income
This is one of the newer Real Estate Apps focusing on commercial properties loans. The company claims to invest in more conservative markets.
The minimum investment is $5,000
Fees are 3% the first year of investment and 2% thereafter, annually.
The Real Estate investing market now allows individual non-wealthy investors to participate in private placements. These have generally returned above average rates, but they are not guaranteed.
If you desire to diversify away from stocks and bonds and have a long term investment horizon, the Real Estate Apps may be an option.
Because real properties usually take some time to appreciate, proceeds from rental income and sales generally are reinvested in the funds.
If you’re interested in crowdfunding Real Estate, do your homework as there are many platforms and Apps to choose from.
The five Apps above can help you start to understand and invest in the crowdfunding market.
For further research call the companies up, ask questions and request information. Remember that this is a private market for the most part.