Earn Steady Passive Income with Real Estate Crowdfunding

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If you’re looking to diversify your investment portfolio away from stocks and bonds and want to earn steady passive income, then it may be worth looking into real estate crowdfunding. This allows you to pool your money with other investors to buy into either individual properties or a portfolio of professionally managed real estate. This allows you to earn annual yields of 5% to 12% paid monthly, and possibly receive long term capital gains when the properties are sold in a few years. So let’s take a look at the pros and cons of real estate crowdfunding in today’s turbulent times.

Crowdfunding is a relatively new technique which allows individual investors to combine their capital to invest in many kinds of projects, from tech startups to established real estate holdings. In this video I am going to focus on conservative, well established real estate platforms that produce steady income.

The first advantage of crowdfunding is that you do not have to have any expertise in real estate, since all of the projects are vetted by professionals with years of experience analyzing real estate. So you are only offered projects that have passed their scrutiny. You get to see everything about the property on their websites, such as the financials, pictures and locations before you invest. The crowdfunding sites also manage the properties for you so you don’t have to deal with the dreaded three T’s of landlording: tenants, termites and toilets. Some websites allow you to invest in individual properties such as homes or apartments, while others offer a widely diversified portfolio. The portfolios are safer because they have multiple properties, while the individual projects tend to offer slightly higher returns. You typically need to keep your holdings for 3 to 5 years, when the properties will be sold, hopefully at a capital gain. So don’t expect much, if any, liquidity for your capital for that time period.

The three main real estate crowding sites, all of which are my affiliates at moneyanswers.com, are Crowdstreet, Fundrise and Roofstock. Crowdstreet specializes in commercial real estate such as office buildings, shopping centers and apartment complexes which it offers as individual properties in the Crowdstreet Marketplace. They also offer several pools of projects that pay an average yield of 7% to 10%. Fundrise concentrates on purchasing individual homes and apartments which you buy to receive rental income and eventually sell at a profit. They project typical returns of 8% to 12%. Roofstock assembles portfolios of rental homes for you to purchase and offers yields of 5% to 8%. You can find links to all three of these sites in the description of this video.

Crowdstreet: https://tinyurl.com/ybkjq4gw
Fundrise: https://tinyurl.com/y8yp4hzn
Roofstock: https://tinyurl.com/y9lfawva

You may be concerned that homeowners and renters are not going to be making their payments during the coronavirus pandemic and that is indeed happening on a wide scale. That is definitely one of the risks of investing in real estate these days. But if you have a diversified portfolio of properties that is professionally managed, that risk can be mitigated to some extent.

So if you’re looking for an alternative source of regular income that is not related to stocks or bonds, look into real estate crowdfunding.

As a personal finance expert, Jordan recognizes quality solutions, forming affiliate relationships to help improve people’s financial lives.

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