Best Real Estate Crowdfunding Sites [+4 Platform Overviews]

Best Real Estate Crowdfunding Sites [+4 Platform Overviews]

Real estate crowdfunding is one of the newest options for investment in commercial real estate. Some websites provide retail investors accessibility to assets conventionally reserved for the affluent.

Investment platforms alias crowdfunding websites in the real estate sector match developers and associated professionals with individual investors. These small investors need exposure to the market without experiencing any issues of financing, owning, and managing real estate.

Although real estate crowdfunding carries risks, diligent investments can diversify your portfolio. Not just that, you might earn decent returns. We reviewed over 24 platforms to discover our top real estate crowdfunding websites.

Out of these 24 platforms, we selected 4 real estate crowdfunding sites, where we also invest our own money. Let’s take a look at them below.

Our Favorite 4 Best Real Estate Crowdfunding Sites

Bulkestate

bulkestate-logo

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  • Fees for Investors – there aren’t any fees when investing through Bulkestate
  • Average Annual Returns – 14.70%
  • Minimum Investment – 50€
  • Investment Options – fixed-interest loans
  • Who Can Invest – any company or any person over the age of 18

Evoestate

Evoestate logo

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  • Fees for Investors – there aren’t any fees when investing through Evoestate
  • Average Annual Returns – 11.87% (self-reported)
  • Minimum Investment – 50€
  • Investment Options – rent, fixed-interest loans, variable-interest loans
  • Who Can Invest – any company or any person over the age of 18

Reinvest24

reinvest24-logo

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  • Fees for Investors – Reinvest24 takes 2% from the investment amount to cover property acquisition expenses
  • Average Annual Returns – 14.6%
  • Minimum Investment – 100€
  • Investment Options – rent, fixed-interest loans, variable-interest loans
  • Who Can Invest – any company or any person over the age of 18

Rendity

rendity-logo

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  • Fees for Investors – there aren’t any fees when investing through Evoestate
  • Average Annual Returns – 7%
  • Minimum Investment – 250€
  • Investment Options – fixed-interest loans
  • Who Can Invest – any company or any person over the age of 18, which have EU bank accounts

Real Estate Crowdfunding in a Nutshell

It’s a unique way to fund a venture or a project. Here, a large pool of investors invests a small sum, making the amount huge. The idea behind crowdfunding is small investments from numerous investors add up quickly to raise a big sum for a megaproject.

GoFundMe is one such popular platform for crowdfunding. It raises money for numerous projects, from medical bills to creative projects.

Real estate crowdfunding involves raising funds for real estate projects. Whenever realtors or professionals find investment opportunities, they might be reluctant to fund the whole project. Perhaps, they don’t wish to put all the eggs in one basket only to find that they lost their money.

Maybe, they’re short of funds. To resolve both situations, crowdfunding comes as a suitable option. The process helps investors invest in the real estate market without financing, owning, or managing properties.

Best Real Estate Crowdfunding Pros:

  • Exposure to real estate without financing, owning, or managing properties;
  • Low amount of investment, so, you could access assets and invest accordingly without putting too much at stake;
  • Higher-profit potency through effective distributions and a lump-sum return;
  • Automated investments in projects on various platforms.

Best Real Estate Crowdfunding Cons:

  • No liquidity – Your money stays locked for a minimum of three to five years;
  • Higher risk than other equity investments;
  • Depending on the divestment and the platform, you may have to bear higher fees;
  • Some investment opportunities are meant for accredited investors only.

How Does Crowdfunding Work in Real Estate

Crowdfunding sites connect fund investors with opportunities. Most crowdfunding deals have a platform, a sponsor, and investors. The following synopsis highlight how crowdfunding works.

  1. A company or individual sponsors the project. The sponsor assumes the responsibility for the project. The investment is acquired, managed, and sold by the sponsor.
  2. Crowdfunding websites associate the sponsor with interested investors. The platform explains the deal to potential investors, collects funds, and takes care of regulatory issues for the sponsor.
  3. Investors contribute to project funding in return for their share in profits.

How Do You Begin in Real Estate Crowdfunding

Crowdfunding sites link real estate investors and sponsors. To get started, explore numerous crowdfunding websites to find a suitable opportunity. Whether you want to invest in a pool of dozen properties or an individual deal, it’s up to you.

Assess the vetting process of platforms for deals and sponsors. Top sites thoroughly check sponsors and their deals. That minimizes the risks of fraud and losses.

Can You Invest in Real Estate Crowdfunding

Yes, platforms dedicated to real estate crowdfunding allow individual investors accessibility to commercial real estate projects.

Popular examples of projects include hotels, medical companies, apartment complexes, retail, and self-storage. In the absence of crowdfunding, these mega investment projects won’t be feasible for most small investors.

Can You Earn Money from Crowdfunding

Of course, there’s immense potential to make competitive returns through real estate crowdfunding projects. According to estimates, you may expect returns in the range of 11 percent and 15 percent each year.

However, real estate investment carries risks. Just like the share market, there’s no guarantee of returns. You may end up with zero returns. In extreme cases, you may finish up losing your investment too. Plus, your contribution stays locked for three to five years depending on the projects and the platform you choose.

Real estate investment websites link investment sponsors and investors. Although you may earn competitive returns on your capital, you run the risk of losing your money too. So, be cautious when researching the crowdfunding platform, the sponsor, and the opportunity before you invest a single penny.

Our Methodology when Evaluating Crowdfunding Sites

To pick the best crowdfunding sites, we took into account numerous factors, including:

  • Minimum investment;
  • Total number of investors;
  • Platform fees;
  • Total investor of dividends;
  • Reinvestment opportunities;
  • Historical yearly returns;
  • Site transparency (how effortless it’s to figure out investment minimums, platform fees, and redemption options);
  • Educational offerings;
  • Better business bureau.

We additionally inspected each platform’s reputation, including recent news, average monthly search volume, and customer complaints and feedback to verify that the site is authentic and reputed.

Who Should Invest in Crowdfunding Projects

Crowdfunding is perfect for real estate investors who wish to attract passive income from projects they can’t afford or access. Plus, it’s a feasible option for those looking to increase their debt exposure.

People who could benefit through this kind of investment include folks seeking a real estate opportunity but lack adequate funds to buy the property outright.

Folks who don’t want to be a landlord or work themselves can also try the option. Investors searching for an alternative to share market investment may also find this opportunity alluring.

In addition to this, retail investors who’d like to invest in the real estate market in a remote region but lack the means or logistics to do so can also go for the crowdfunding approach.

Is Real Estate Crowdfunding Perfect for You

There can’t be a universal answer to this question. However, one key point is you gain access to a wide variety through crowdfunding in terms of time commitment, risk tolerance, and other factors. As long as you’re a long-time committed investor, you’ll surely benefit from some kind of crowdfunded investment projects.

Real Estate Crowdfunding Summary

Crowdfunding platforms shook the real estate investment market by leveraging the number of deals for average investors. It allowed me to test my investment option into real estate. Now, I invest enough money in crowdfunded projects.

Of course, it isn’t free of risks. In the case of downturns in the market, you’ll likely notice more publicized losses. Still, the better the platform and its management, the better your chances will be.

No single platform has a perfect batting percentage to allure you. Some deals will under-perform no matter what. Yet, sticking to the best platforms (mentioned above) that have a better vetting and underwriting process will minimize the risks. Additionally, you should exercise due diligence on your part before investing in any project.

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