Crowdfunding has become a go-to way to help in the case of natural disaster, medical emergency or long-cherished “bucket list” dreams.
Turns out, it’s also a terrific way to make real estate investments.
Real estate investment crowdfunding is a great way for investors to diversify their portfolios, and it allows burgeoning investor management companies like us to thrive — it gives us a chance to get into the market.
The advantages for the investor are endless.
Crowdfunding allows investors to pick and choose
Investors have more flexibility than ever before with real estate investment crowdfunding, especially contrasted with real estate investment trusts, which have investors pouring their money into geographically far-flung properties. It can be more difficult for people to know where their money is going with REITs, but with crowdfunding investment projects, investors can pick and choose which funds they want to invest in.
With so many crowdfunding options out there, the market is set up and primed for investors to hop in and make a fortune.
RE/DEV offers two different funds, both geared toward using investor money to address the affordable housing crisis in Massachusetts in different ways. One takes advantage of state-designated opportunity zones, and the other builds into markets with advantages to investors for affordable housing.
Since crowdfunding campaigns aren’t publicly traded, they’re immune to the daily fluctuations in value that affect other investment types, including other real estate investment methods. Investors typically buy in expecting to hold their share for long periods of time. In fact, if investors hold their stakes in our funds for 10 years or longer, they could potentially receive tax-free income.
RE/DEV’s investment team doesn’t like foreclosure, and our investors won’t lose money. Instead of foreclosing or selling, we’ll hold our investments and lease for the highest possible market rate until it’s possible to make our investors a profit by selling, or we wait on future developments until things stabilize.
Either way, we’ve made sure to minimize our investors’ risk; after all, our interests are aligned with theirs, and we invest in the same properties, too.
Crowdfunding makes real estate accessible
All (OK, most) investors know real estate assets are the most reliable way to diversify a portfolio, but the cost of entry on these investments can be intimidating.
Real estate crowdfunding makes property investment a democratic process, with lower minimum investments.
RE/DEV has a minimum investment of just $1,000, and we don’t cap buy-ins from accredited investors. That’s because we believe in affordable housing, and affordable investing, too.
Crowdfunded real estate investments also offer a way to hold stake in properties without the hassles of managing them. Those benefits include tax deductions from maintenance, including development and repairs.
Finally, crowdfunded real estate investments are a way for investors to strengthen their own home communities. At RE/DEV, we’re focused on helping everyone grow wealth — our investors, through good decisions, and our buyers, through property ownership.