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Investing in real estate is a great way to diversify your portfolio and earn passive income and/or capital gains. However, owning real estate can present some challenges, especially for first-time investors.
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First and foremost, the best way to make money from real estate is to have expert knowledge of what properties are good deals. In other words, everyone knows that “location, location, location” is a winning factor in real estate investing, but new investors may have no idea that “location” is ideal.
This is why using real estate apps has generated such excitement. In many cases, you can invest collectively in a professionally managed real estate portfolio at a low cost. But like any form of investment, some platforms are better options than others. Here is a list of the best real estate investment apps to choose from depending on your investor type.
Happy Nest is a good property investment app to consider as it charges no fees. In just minutes, you can open an account for as little as $10 and immediately start investing in a diverse portfolio of income-generating investments. Like pioneering savings app Acorns, Happy Nest also lets you link your credit or debit card to round up your purchases to the nearest dollar. Any extra money will be invested directly into your Happy Nest real estate account.
Happy Nest primarily invests in properties leased to Fortune 100 companies such as FedEx and CVS. Recently, the company expanded its portfolio to include industrial and multifamily housing, believing that this type of diversification reduces risk, increases stability and increases long-term returns.
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The DiversyFund is another option that may appeal to novice investors as it is easy to use and has a minimum investment of just $500. Like Happy Nest, DiversyFund does not charge any administration or transaction fees. However, DiversyFund focuses exclusively on multifamily assets, which the company claims have historically outperformed his S&P 500 index and provide a hedge against inflation.
The company’s portfolio currently includes:
- 12 multifamily properties
- Estimated value of $175 million
- 1 million square feet of rentable storage
- Assets spread across 6 states
- Over 500,000 community members
The app offers automatic investment functionality so you can continuously add to your portfolio. In addition, since a wealth of information about real estate in general is posted, you can deepen your understanding while building a portfolio.
Groundfloor calls itself a “savings” app because it offers everything from basic savings accounts and loan options to investment accounts backed by first-tier real estate. The investment app allows users to choose between individual renovation projects or automatic investment according to their personal criteria. Assets are invested in residential real estate.
Groundfloor pays back its investment every 4-12 months on average, so if you keep investing for 4 consecutive months, you should start receiving distributions every month after that. The app boasts an average annual return of 10% over the last eight years, with no investment fees or maximum balance limits.
The app has over 200,000 investors and over $240 million under management, and you can get started with $10.
CrowdStreet is an interesting option as it is the exact opposite of the beginner apps above. First and foremost, CrowdStreet only invests in commercial real estate. However, rather than handing your money over to blind pools run entirely by professional managers, CrowdStreet gives you direct access to specific sponsored property listings you should choose to invest in yourself. If so, you become the direct owner of that listing and other investors who have pooled their money to make the investment.
For example, you may choose to invest in the “Evanston Multifamily Portfolio,” which consists of five properties in downtown Evanston, Illinois, a multifamily portfolio. As this type of investment requires more knowledge on behalf of the investor, CrowdStreet is only available to accredited investors who are able to invest at least $25,000.
As of September 2022, the app has raised $3.93 billion, initiated 661 deals, and delivers an internal rate of return of 18.5%.
One thing to note is that CrowdStreet does not charge an administrative fee, but you must pay your listing sponsor to access the deals. But if you’re already an experienced real estate investor, CrowdStreet may be more appealing than other available apps.
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