If you’re looking to garner the benefits from real estate investments without the hiccups related to the market’s expenses, real estate crowdfunding platforms are a great way to lock in your investment.
Apart from perks like hedging your money against inflation or high interest rates, real estate crowdfunding comes packed with some major tax benefits. Here are five platforms that generate around 8% average returns annually:
With assets worth over $1.4 billion to their credit, Fundrise has channeled investments into construction homes and loans, office buildings, and multifamily developments, amongst others. An investor can expect dividend yields that average 8% for an annual fee that varies between 0.15-1%.
For as little as $10 and no middlemen, investors can gain exposure to short-term, high-yield returns that average 10% annually. One of the platform’s biggest USP is its option to invest in Limited Recourse Obligations (LROs), while allowing the investor to choose the loan or the property details. LROs can generate competitive returns when compared to traditional assets.
3. Small Change
The platform is tailored largely for the social conscious and impact investors. It invests in projects that include green buildings, eco-friendly materials, and affordable housing. One factor that differentiates Small Change from other platforms is its no-fee policy – the company instead splits profits, pegged at over 8% annually, with its sponsors.
Although the minimum investment amount is pitched at $5,000, the platform has various offerings for the investor to choose from – be it equity or debt, smaller commercial properties or residential properties. RealtyShares’ payout can be either monthly or quarterly, and returns can be anywhere between 8-20% for a fee of 1% on equity and a 2% interest rate on debt.
With a portfolio that’s worth over $1 billion, the platform has exposure to shopping centers, hotels, real estate loans, commercial facilities and apartment buildings. One of their more popular stake is a 15% share in the Hard Rock Hotel Palm Springs. Investment periods range from six months to a year and enjoy an estimated 8.5% returns annually.
It is no secret that crowdfunding real estate projects have gained huge popularity, and the numbers throw light on this – nearly $2.5 billion worth of investments in the real estate market are through crowdfunded platforms. There’s tremendous growth projected for the industry, which means individuals gain access to more opportunities for investments and improved portfolio diversification.