Planning your financial future is important, and the trick lies in understanding how to maximize returns on the amounts you invest. With the recent changes in SEC laws, ordinary investors can now take advantage of low-risk high-return real estate portfolios that were previously reserved for the “big boys” only.
And with advancements in fintech, you can now invest in real estate projects at the comfort of your home or office, with as little as $500.
Below is a brief rundown of two noteworthy tools to help you add lucrative assets to your real estate portfolio. Of course, there are still dozens of others to choose from.
Minimum investment: $500
Historical returns: 17.5%
Joining fees: $0
DiversyFund provides an online platform for investors looking to acquire portfolios of private real estate assets run by industry experts. The fund buys older already-rented units and renovates them within the first year, then increases the rent and value of the property. The strategy, known as forced appreciation, allows the company to sell the units later at a profit.
The dividends from your portfolio are automatically reinvested until the maturity period of your investment, and once a profitable liquidation is identified, the assets are sold and the principal investment plus interest distributed to investors.
The average historical return rate of the company is 17.5% and is among the highest in the industry.
Minimum investment: $500
Historical returns: 8.7% to 12.4%
Joining fees: 0.85% annual asset management fee and 0.15% annual investment advisory fee
Fundrise is an online tool for investing in real estate assets and it works like an ETF with the difference being the traded assets. Here, the assets are essentially REITs or eFunds instead of common stocks.
The fund’s class of assets for investment are thoroughly evaluated by a team of real estate experts in terms of their revenue potential, and not just value appreciation over time.
A typical portfolio would include anything from single-family rental houses to multi-building apartments.
Fundrise uses three types of investment strategies: The Supplemental Income strategy meant to maximize quarterly dividends, the Long-Term Growth strategy for maximizing long term returns, and the Balanced Investing strategy which splits the difference.
Returns on investment are distributed on a quarterly basis in the form of dividends.
Lastly, note that both DiversyFund and Fundrise allow you to invest in real estate equity and debt, which attracts some higher level of risk because real estate equities are characterized by frequent fluctuations.