Real Estate Investing and the Growth of Crowdfunding and Other Alternative Investment Options
Real estate investing is one of the most common investment choices investors make. It can serve to protect against inflation and build wealth, but it’s also a risky option that should be diversified in order to minimize potential losses.
Investment opportunities in real estate include purchasing REITs, investing in rental properties and joining a private equity real estate fund. However, the growth of crowdfunding and other alternative investment platforms has dramatically altered how investors can access these properties.
Crowdfunding provides investors with a range of investment options that may offer higher returns than traditional investments. It also permits them to diversify their portfolios and gain more exposure to residential and commercial property holdings.
A Growing Market
The real estate crowdfunding market is expected to experience a compound annual growth rate (CAGR) of 12.9% during the forecast period. The primary factors driving this expansion include an influx of new investors, the increased use of blockchain technology, and more efficient and secure peer-to-peer financing solutions.
Long-Term Investing:
An increasingly popular trend in alternative investing is long-term investment strategies. These involve purchasing commercial and residential buildings for years at a time, with the objective of investing in property that will increase in value over time and generate cash flow through rent from tenants.
Historically, investment in real estate was only available to high-net-worth individuals and accredited investors. But companies like Concreit are making it possible for all investors to participate in this cash flow strategy.
REITs:
Real estate investment trusts (REITs) are publicly-traded companies that own and manage income-generating property. Compared to direct real estate purchases, REITs provide lower initial costs and greater flexibility in investment structure.
Beginners may find this an attractive option, as they won’t need to invest any money up front and can earn decent returns by selling their shares after several years. Furthermore, experienced investors who wish to diversify their portfolios and avoid direct ownership of real estate may also find it appealing.
REITs are often considered the most cost-effective investment choice and can provide a lucrative return on investment if you locate the appropriate properties to buy. However, these securities have higher risks than other forms of investments, so you should exercise caution when selecting the most suitable REIT for your investment objectives.
Utilizing Leverage:
Today’s most successful real estate investors leverage leverage to maximize their investment portfolios. While this approach may lead to greater profits, it’s essential that you understand how leverage works and how to manage it efficiently.
Real Estate Is Becoming More Diverse:
While the real estate market has long been dominated by a few major players, it is becoming more diverse. Thanks to crowdfunding and other alternative investments, new players are finding their way into this competitive sector and challenging established firms for market share.
