Investing in real estate is fast becoming a lucrative option with the possibility of earning an attractive return. The exciting thing is that you no longer need to have large sums of money to purchase homes or commercial properties. Small investors looking for options where they can invest as low as $500 can purchase a real estate portfolio. The one way to make that happen is via Real Estate Investment Trusts, or crowdfunding platforms that invest solely in real estate.
How Does Fundrise Work, the First eREIT?
Fundrise is the first of such eREITs and is essentially a company that operates similar to a mutual fund. Instead of investing in stock, the company purchases, operates, and manages real estate that has the potential to generate a substantial income. Individual investors can pool their money and earn returns in the form of dividend payouts. Check out the Fundrise review, and you will learn how this eREIT is having tax-saving investment options, unlike stocks. If the company transfers 90% of its earnings to the investors by way of dividends, the REIT need not pay taxes.
The “eREIT” Term is Coined and Trademarked by Fundrise
Fundrise has coined and trademarked the term “eREIT” to specifically describe the services it offers to its investors. This platform is open to the public and anyone can choose to invest in real estate by depositing their money directly. Its most interesting defining feature is that Fundrise is not traded on the stock exchange, but has the potential to earn attractive returns. Fundrise annual returns were between 7.4% and 12.4% from the years 2014 to 2020. These percentages may vary according to the particular year and the portfolio owned by the investor.
How to Invest Through a eREIT
Investing in an eREIT is a simple process. You’ll create an account on the company website and add the amount you wish to invest. This amount can be as low as $500 and upward. Next, you’ll select the investment strategy that appeals to you by checking the list of active projects. Choose from property types like single-family homes, commercial property, new apartment construction, and studio homes. The interactive website and mobile app allow you to monitor and manage your investment on the go.
Earning Returns on Your Investment
Aside from dividend payouts that you’ll receive each quarter, you can expect capital appreciation as and when the property rises in value. While the dividend passive income is paid out from the rent collected and loan interest payments from debt investments, the capital appreciation is collected when the property is sold and liquidated. Rest assured that eREITs have experts on board who focus on investing in real estate that has the potential to rise in value over time.
With the housing and commercial real estate industry poised for significant growth in the coming years, this is a great time to invest in property. Small investors would want to rely on platforms like eREITS to safeguard their money while getting assurance of attractive returns.
