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

ForbesHow One Startup Raised 10 Times Its Original Crowdfunding GoalForbesRunning a successful crowdfunding campaign isn't easy. The odds are heavily stacked against you, as very few end up succeeding. "Statistically, up to 89% of campaigns fail. Kickstarter has the highest [...]

ForbesThe Ultimate Pre-Launch Crowdfunding ChecklistForbesCrowdfunding is not limited to the platform where you launch your campaign. Instead, it has become a valuable way to transform your idea into a mainstream business. In order to head in that direction, you must execute a number [...]

Eater LondonFat Macy's Launch Crowdfunding Campaign to Open Restaurant in PeckhamEater LondonFat Macy's — a food social enterprise which aims to train young Londoners living in temporary housing — have launched a crowdfunding campaign. Their aim is to raise £55,141 to fund a [...]

Realnoe vremyaEveryone pools: Elvira Nabiullina to look closer at crowdfundingRealnoe vremyaIts Deputy Chairman of the Board of Directors Yulian Lazovsky told Realnoe Vremya that crowdfunding platforms will need to create a capital of at least 10 million rubles within the cooperation [...]

Crowdfund InsiderStartwise, a New Crowdfunding Platform using Reg CF Goes Live with Revenue Sharing OfferingsCrowdfund InsiderToday, Startwise, the newest FINRA approved Reg CF platform, has officially launched a marketplace where you can invest in companies you care about for as litt [...]

U.S. News & World ReportNo Cash for Hate, Say Mainstream Crowdfunding FirmsU.S. News & World ReportThe block on mainstream crowdfunding is just the latest blow to far-right activists operating online. In the last 24 hours, neo-Nazi website the Daily Stormer had its domain regi [...]

TechCrunchUK's Prodigy Finance raises $240M to crowdfund students from emerging marketsTechCrunchUK fintech startup Prodigy Finance has raised a whopping $240 million funding round, certainly one of the largest by a UK company this year. The company provides loans to internationa [...]

Devon LiveCrowdfunding campaign launched to save adopted Romanian puppy who needs £8000 for vital surgery to save its lifeDevon LiveSam has started a crowd-funding campaign to try to help meet the £8000 cost of the surgery. It's a tall order, but every little helps. Sam had been [...]

DreamHost Launches Crowdfunding Campaign to Cover Legal Costs in DOJ FightWeb Host Industry ReviewDreamHost has set up a crowdfunding campaign to raise $10,000 for its legal fight against the U.S. Department of Justice. The DOJ is attempting to force DreamHost to provide it with websi [...]

Crain's Cleveland Business'Smaller' gifts can go long way for Clinic's crowdfunding platformCrain's Cleveland BusinessFor an institution accustomed to securing multimillion-dollar donations, Cleveland Clinic's latest fundraising effort has some relatively [...]

CFB Finance

Syml
Lst Val
+/- Val
+/- %

Marketwired

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

Press Release

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 |