Real Estate Crowdfunding for Retirement

Crowdfund Beat Media,

Real estate is an important part of any well-diversified portfolio. Not only is it a good way to protect yourself against volatility in the stock market, it can also provide retirement income.

One of the best things about investing in real estate is that you have so many different ways to do it. House-flipping is one option if you want to pocket big profits all at once. Becoming a landlord is another way to go if you’d rather be on the receiving end of monthly rental payments.

 

Real estate finance

Real estate crowdfunding, is an alternative that’s gaining popularity. It’s estimated that the real estate crowdfunding industry topped $2.5 billion in 2015 and is still growing. If you are wondering if this is a good time get in on the game and start fortifying your retirement goals, here’s a overview of real estate crowdfunding.

Real estate becomes more accessible. Private real estate deals have historically been reserved for high net-worth investors who possess the right connections to gain access. Real estate crowdfunding opens up many of these opportunities to the average investor.

This is a great opportunity for investors who are struggling to find an entry point into the real estate market. Crowdfunding enables investors of all ages, risk profiles and wealth levels to acquire real estate for the first time. With as little as a $5,000 investment or in some cases even less, investors can buy a stake in a property. From residential projects to shopping malls to office buildings, there are numerous options.

Crowdfunding is removing barriers to investing in real estate that previously shut a large number of investors out of the game. The SEC’s approval of Title III of the JOBs Act in October 2015 widens the possibilities even further by allow non-accredited investors to take part in crowdfunded real estate deals.

The opportunity for diversification expands. With direct ownership, your options are more limited when you don’t have the ability to purchase multiple properties. Real estate crowdfunding eliminates that obstacle.

Instead of being locked in to a single property type, investors have more flexibility where they put their money. They also have a choice between investing in equity in return for a share in a particular property, or debt investments, which are tied to the property’s mortgage.

If you buy a property to flip or rent, you’ll most likely feel more comfortable investing in your own backyard. When you are investing through crowdfunding, you can invest throughout the country and more easily diversify across property types, investment types and geographies.

It’s a less stressful way to invest in real estate. Owning a rental property or tackling a flip project is great for investors who prefer an active role but it’s not necessarily a good fit for someone who wants to relax in retirement.

With house-flipping, investors have to factor in all the costs involved, from buying the property to physical construction, as well as the interest paid to lenders if you’re financing the project. Besides that, there are the tax implications that go along with realizing short-term financial gains. Bottom line, it takes a long time to master the art of rehabbing. Investors have to be able to anticipate problems and have a counterattack ready.

Owning a rental house is no less of a challenge. There are the difficulties that go along with finding tenants and making sure you’re adhering to the legal guidelines for renting. Then there’s the day-to-day demands associated with managing a property, which can be time-consuming.

The passive nature of real estate crowdfunding as being more suited to retirees who have less of an interest in direct involvement.

Real Estate Investing is a Great Way to add Retirement Income
For some investors, real estate is a viable option for generating money and diversifying your investments.

Understand the risks. While real estate crowdfunding may be more preferable to direct ownership for some retirees, there are some potential drawbacks.

Liquidity is one issue that may be of more concern to retirees. Depending on how a deal is structured, you may be looking at a holding period of anywhere from 18 months to seven years before you’re able to recoup your investment.

In that scenario, owning a rental property or flipping homes could begin to look more attractive because there’s a more immediate payoff. Factoring in the holding period is important if you have a pressing need for sustainable cash flow outside your existing investments.

With crowdfunding deals that are structured as debt or loans, investors receive returns for loaning the owner/ developer money.

Tags

 

Tags: , , , , , , , , , , , , , , , , , , , , , , , , ,

HEADLINE NEWS

Mountain XpressFaces in the crowd: WNC crowdfunding initiatives | Mountain XpressMountain XpressEach week, Xpress highlights notable WNC crowdsourcing initiatives that may inspire readers to become new faces in the crowd. This week features Smiling ...and more » [...]

ForbesReal Estate Crowdfunding: 3 Trends to Watch in 2017ForbesReal estate crowdfunding continues to be a dynamic and ever-evolving industry, growing to an estimated $3.5 billion in 2016. By 2025, the crowdfunding industry as a whole is anticipated to be valued at more than $300 billi [...]

Entrepreneur3 Secret Weapons to Make Your Crowdfunding Campaign a Resounding SuccessEntrepreneurCrowdfunding sites like IndieGogo and Kickstarter popped up to provide a solution, by offering perks to early adopters of technology and products in exchange for funding, and by 2015 the cr [...]

Crowdfund InsiderGridShare Targets Renewable Energy Crowdfunding under Reg CF, Plans International ExpansionCrowdfund InsiderGridshare is one of the newest Reg CF crowdfunding platforms to receive regulatory approval. While the number of Reg CF portals is growing, Gridshare is the fir [...]

LiliputingCrowdfunding means Netbooks don't have to be cool (or popular) to ...LiliputingThe GPD Pocket is a notebook with a 7 inch, 1920 x 1200 pixel display, a quad-core Intel Atom Cherry Trail x7-z8700 processor, 8GB of RAM, and 128GB of ...and more » [...]

Android Authority (blog)Crowdfunding project of the week: Professor Einstein robot is the coolest digital assistantAndroid Authority (blog)It's time to dive into the crowdfunding world to find you another featured campaign. In this article series we aim to highlight the hottest p [...]

The Australian Financial ReviewSlow-clap for ScoMo's dodo; equity crowdfunding legislation that is already extinctThe Australian Financial ReviewThe key problem with the proposed framework for the equity crowdfunding bill is it effectively locks out 99 per cent of small businesse [...]

EntrepreneurHow to Make a Crowdfunding Video People Actually WatchEntrepreneurTo draw serious interest from prospective investors, you must spend time and resources in fine-tuning your message.and more » [...]

TrustedReviewsZTE's smartphone crowdfunding campaign went really badlyTrustedReviewsZTE has prematurely ended a crowdfunding campaign that was designed to bring the vision of the brand's fans to life. Unfortunately, it seems fans had other ideas. The company had been hoping [...]

Courier MailCrowd-funding to light up festivalCourier MailWynnum Manly Events Incorporated is crowd-funding $25,000 for this year's festival, expected to be held on June 17. Group president David Saunders said they decided to crowd-fund the event because in the past it had been t [...]

CFB Finance

Syml
Lst Val
+/- Val
+/- %

Marketwired

  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

Press Release

CrowdFund Beat Media

The 4th Annual Crowdfunding USA Conference & Workshop ln.is/lnkd.in/nugJz

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |