Investing in real estate is one of the best investment decisions that you can make for life. Unlike some of the other passive income streams, most real estate investment schemes are long term and can provide you with great returns. Real estate crowdfunding helps to smoothen your investment.
The real estate market comes with a significant entry barrier; you’ll need to have a lot of money. If you want to purchase a rental property, you will need to make a down-payment, at least, and those aren’t cheap.
That’s where real estate crowdfunding comes in. This article would show you the best real estate investment crowdfunding platforms (from research) by region (USA, Europe, Asia, etc.). But first, a little explanation of what real estate crowdfunding is.
What Is Real Estate Crowdfunding
Real estate crowdfunding is a system where you pool your money with other investors from all over the world to purchase properties to rent or sell. With the pool of resources, the money adds up enough to make valuable investments. It allows small real estate investors to fund big projects with as little as $500 or even less, depending on what you go through.
Although cooperatives and some groups can come together for this purpose, it’s easily accessible through real estate investment crowdfunding platforms for the general public. Those platforms (crowdfunding sites) pair property developers and other real estate professionals with people who want to invest in real estate quickly.
While real estate crowdfunding is risky, as is every other investment route, investments in real estate can help diversify your portfolio and earn passive wealth that does grow with time.
One thing to note here is this: In real estate investments, sometimes there are barriers based on net worth. One of them is being an accredited investor (called Experienced investor in some countries). This is a person or institution with high net worth — we are looking at over a million dollars — and can access higher risk and complex investments.
There are some other specifics to this, have a look here for the regulations that apply to the USA. Check the details for other countries that follow that here. Some of these platforms require accredited investors only; some accept non-accredited investors.
Now, let’s look into the best platforms for this. I have evaluated dozens of platforms in different regions to get the top picks.
Best Real Estate Investment Crowdfunding Platforms In the USA
Fundrise is one of the first platforms in the crowdfunding area of the real estate industry, and over the years, the platform has handled over 130,000 people with over $4 billion in real estate investments. If you’re a beginner to real estate crowdfunding and want to invest in the USA, you should go with Fundrise. It’s the best for beginners and the minimum to begin investing is $500 with a 1% Fundrise fee per year.
Fees: 1% per year
Average Annual Returns: — 8.7% to 12.4%, depending on the investment
Accredited Investors Only — No
Minimum Investment — $500
Fundrise Investment Options
Fundrise offers a diverse selection of investment portfolios, so there’s something for everyone. First, Fundrise has three account plans with varying features and minimum funding required to open an account. The account plans are Starter, Core, Advanced, and Premium.
They work in levels; as you add funds over time, you can rise upwards and unlock the features on the higher plan.
Fundrise Starter Plan
All investors can sign up for the Starter plan with a minimum opening balance of $500. On this level, you have no control over how your money will be invested. You’ll also be limited to investing in the starter Portfolio, which is 50% growth and 50% income holdings.
Fundrise Core Plan
If you have $1000 or more, you can sign up for the Core Plan. At this level, you unlock supplemental income, balanced investing, and long-term growth.
On supplemental income, you earn returns primarily through dividends from rental and interest payments.
On balanced investing, you get eREITs and eFunds — 50% real estate that’s appreciating and 50% income investment (cash flow from areas like rentals).
For the long term growth portfolio, you get to grow wealth primarily from real estate appreciation and then selling the properties. This includes buying to renovate and sell for a gain.
Fundrise Advanced Plan
The Fundrise advanced plan is open to anyone with $10,000 or more. On this plan, you can control how your funds are spent to a more considerable extent; you can pick funds that you want and allocate money to them.
Fundrise Premium Plan
Fundrise’s premium plan is open to those with $100,000 or more. You get access to all of the core and advanced plan offerings and nothing more for funds and investments on this level. However, unlike the lower levels, the premium plan comes with priority support, where you can schedule calls with Fundrise’s team.
Roofstock was founded in 2014 and has overseen over $2 billion in investments. Roofstock is a niche real estate investment crowdfunding platform; it only handles investments in single-family rental homes. Essentially, it simplifies the process of buying vetted single-family homes to rent. Also, it has a property management team to take care of the operations, so you don’t have to deal with the hassles.
Roofstock is more of a real estate marketplace than a crowdfunding platform. It has one package for crowdfunding, though, but it’s only open to accredited investors.
Alignment: Roofstock retains a minimum of 10% ownership interest in each share.
Shares: 1/10th of property equity
Average Annual Returns: — depends on the investment.
Accredited Investors Only — Yes (for crowdfunded investments)
Minimum Investment — $5000 (for crowdfunded investments)
Roofstock Investment Options
Roofstock has a lot of offers in its marketplace. Still, given that this article focuses only on the best real estate investment crowdfunding platforms, I will concentrate on the crowdfunded investments, which it does so well. That investment option is called Roofstock One.
With Roofstock One, you can invest in the whole or fractional interests of a single-family rental home without dealing with property or tenant management; Roofstock handles the property’s management.
Properties are typically issued to investors in shares where a share is 1/10th of the property value. For each fraction, Roofstock retains 10% for at least one year. The price depends on the property’s value, but it typically starts at $5000 per share.
In addition to what you pay for a share of the property, you will also contribute to the reserve, which should equal 1% to 3% of the home price in cash to enable Roofstock to cover expenses generated by the property.
Every quarter, investors receive cash distributions of the property’s net income (rent minus fees and expenses) and tax benefits, if there are any.
Although anyone can review properties listed under Roofstock One, only accredited investors are allowed to invest. If you decide you want to invest, Roofstock One uses North Capital Private Securities Corporation to verify your accredited investor status. When confirmed, you can complete your purchase.
Founded in 2014, CrowdStreet has managed more than $1.4 billion, of which about $170 million has been returned to investors. CrowdStreet gives direct access to a range of vetted real estate investments of which accredited investors can pick a property and invest independently of interference from CrowdStreet. There are two other options; one is investing in a fund. The other is a more managed solution that involves a personalized portfolio based on your goals, with a dedicated support representative and online tracking.
Fees: Some fees for managed investments
Minimum Investment: Varies (Saw $25,000 on some offerings)
Accredited Investors Only — Yes (majorly)
Average Returns: — varies by investment/property
CrowdStreet Investment Options
As mentioned above, CrowdStreet offers three ways to invest. Each offering has its minimum investment allowed; some real estate offerings on the website showed as high as $250,000, but I saw a few that were $25,000. You could also get portfolio options in the direct investing offering for as low as $10,000.
Still, all of those are out of reach for many new investors. If you’re looking for a low barrier to entry, Fundrise is the best. That’s the reason why CrowdStreet is the third on our list, despite offering diverse options.
Although most investment options are open to only accredited investors due to SEC regulations, there are few offers that non-accredited investors can access. Let’s take a look at the options.
If you’re looking to use real estate investment crowdfunding platforms as a passive income stream, CrowdStreet Funds are one option that CrowdStreet offers. The other is the managed investment, which I will get to soon. Funds investing is excellent if you don’t want to bother with all the work that comes from purchasing and managing properties.
Here, CrowdStreet does the vetting to build portfolios, of which each portfolio holds anywhere from 30 to 50 commercial real estate. It gives you a perfect way to diversify easily as you gain access to multiple real estate deals with one investment.
There are two types of funds here; CrowdStreet funds managed by CrowdStreet and single-sponsor funds managed by real estate firms, of which each fund is managed by one firm.
CrowdStreet Direct Investing
Suppose you want more control over what you invest in; the direct investing approach allows you to pick and choose properties to invest in. The direct investing offers are managed by the real estate companies in charge of the properties listed. You will find details on each property and can request additional information or indicate interest on CrowdStreet. The minimum investment here is usually $25,000.
CrowdStreet Managed Investing
With managed investing, CrowdStreet will build and manage your portfolio based on your goals. This option is for high net-worth individuals as the minimum investment here is $250,000. The fees are calculated in percentage of which with more years, the less you pay.
Other Crowdfunding Platforms In The USA Worthy Of Mention
Best Real Estate Investment Crowdfunding Platforms In Europe
EstateGuru was founded in 2013 in Tallinn, Estonia, and has grown to have offices in Latvia, Lithuania, The United Kingdom, and Finland. EstateGuru has over 66,000 investors with over €20 million in investors’ earnings. EstateGuru is a real estate investment crowdfunding platform in Europe that connects those in need of funds/investors in real estate to those looking to invest.
Minimum Investment: €50
Fees: 1% withdrawal fee and 2% for selling claims
Annual returns: 8% — 13%
EstateGuru works differently compared to the top real estate investment crowdfunding platforms in the USA. On EstateGuru, if you need a short-term loan to grow and expand real estate assets, you can apply as a borrower, of which the loan will be backed with a mortgage. For investors, there are criteria.
To invest, you need to have a minimum of €50, which is easy; you must also be at least 18 years old with a bank account in any of the European Economic Area (EEA) states or Switzerland.
EstateGuru Investment Options
To invest, you can look at the listing on the EstateGuru website and choose which you would invest in. There’s also the option of auto-invest. EstateGuru has a verification process for investors that includes ID information and filling a form and questionnaire.
There’s no buy-back guarantee if the borrower defaults, but EstateGuru claims it has had 0% capital loss.
EstateGuru Manual Investments
With the manual investments, you get to see all necessary information, including the number of investors, when the opportunity expires, target, collateral value, loan-to-value, loan period, schedule type, mortgage rank, and so on. After reviewing the information, then you can start investing.
EstateGuru Auto Invest
With the Auto Invest feature, you relax and let EstateGuru handle the investment part. All you need to do is activate Auto Invest and choose your criteria. When opportunities are available, those with the Auto Invest feature get the first pick as the system invests automatically before the opportunity is open for manual investment.
You can change these settings at any time and deactivate Auto Invest if you prefer manual investments. Beware that you are only allowed to choose suitable investment criteria with Auto Invest if your investment amount is above €250.
When you get your returns on investment depends on the loan. Some have a monthly repayment schedule; some others have annual repayment. So, the duration differs. The interest rate also varies, but it usually ranges from 8% to 13%.
ExtateGuru is a favorite real estate crowdfunding platform in Europe because it’s pretty easy to invest, and the minimum investment amount is low. Still, CrowdEstate takes the crown for the highest expected annual return rate — a massive 16.31%.
CrowdEstate was founded in 2014 and has over 50,000 active users from 125 countries and over €97million raised. Its focus is on real estate, corporate finance, and mortgage loans. CrowdEstate has offices in Estonia, Italy, and Romania.
Minimum Investment: €100
Average Annual Interest Rate: 16.31%
Fees: Fees are charged to sellers; investors only deal with bank transfer fees if it applies
To start with, everyone but citizens of the United States and a few other countries can invest in CrowdEstate as long as they are at least 18 years old. To register, sign up with your name and email, and you will have access to all the listings and information in them. You need an investment account to invest, though; you will need to go through a simple vetting process to get that.
During that, you select the account type (individual or company) and enter your account name, ID Code (Social security or local identity code), contact information, residency information, bank information, name, and email.
CrowdEstate Investment Opportunities
For investment opportunities, loans are mostly between 6–24 months. As mentioned above, the interest rate on average is high. However, there’s no buy-back guarantee, but CrowdEstate claims it has had 0% capital loss.
CrowdEstate has some features to help you make the right decision, such as risk rating and other information concerning each investment opportunity.
There are two ways to go about investing with CrowdEstate: manual and auto investment. With the manual investment, you can go through an investment listing and decide if you want to invest. On the other hand, Auto Invest handles investments for you.
CrowdEstate Manual Investment
With the manual investment, you choose a listing and invest. CrowdEstate has pre-booking, which opens the investment listing to be booked before it’s open for booking. That provides everyone that’s interested a chance to invest.
Here’s how it works. The pre-booking period happens during the 24 hours before a listing is open for booking. At that time, any individual investor can pre-book to any amount that they want to invest — no limits. However, if more money is pre-booked than needed, the money is distributed proportionally among investors, and the excess is sent back to the investors. CrowdEstate explains it here.
So, with the manual listing, as long as you book during the pre-booking period, you will be guaranteed an investment. If it’s still available after the pre-booking period, you can also book.
CrowdEstate Auto Invest
With CrowdEstate Auto Investments, you set up your Autoinvest settings with the criteria that you want your investments to meet and ensure that the money you have in your criteria is in your investment account.
If the money’s there during the pre-booking period and the investment meets your criteria, the system will automatically invest for you. As with manual investments, if the pre-booking period’s investments exceed what’s needed, you will get your share of the investment and have your left-over balance sent back to your investment account.
CrowdEstate Secondary Market
If you wish to get out of your investment contract before it matures, CrowdEstate has an exit path for you called the secondary market. There, you can sell your investment to any interested buyer. As an investor, you can also buy an investment in the secondary marketplace.
If you’re selling, you will be charged 2% plus VAT as the transaction fee when your sale is successful.
Compared to the other top real estate investment crowdfunding platforms that I have reviewed so far, EVOEstate is newer to the real estate crowdfunding market.
Founded in 2019 and based in Estonia, EVOEstate is a platform that helps investors to access a diverse pool of real estate investment opportunities, including buy-to-let, development loans, buy-to-flip, equity projects, and more.
EVOEstate lists investment opportunities from over 15 countries. One thing that makes this platform stand out is that when you sign up on EVOEstate, you get access to 19+ other real estate platforms, including some of Europe’s best, such as Reinvest24.
Interest Rate: Up to 18% per annum
Minimum Investment: € 50
To invest in any of the opportunities on EVOEstate, you need to be at least 18 years old and have a bank account. EVOEstate also has ‘know your customer’ checks that they perform before you can start investing.
EVOEstate Investment Opportunities
EVOEstate has three ways that you can access investment opportunities. The manual investments, Auto Invest, and the secondary market.
EVOEstate Manual Investment
With the manual investments, you can look through the projects on offer on the EVOEstate platform and choose projects you want to invest in. Project listings typically include annual yield, mortgage rank, investment term, interest payment schedule, project descriptions, risks, and owner.
You can also ask questions and see the questions that other potential investors have asked concerning the project and the answers provided by the EVOEstate team/project owner.
If you’re satisfied with the information, you can then type in the amount you want to invest and go ahead to invest.
EVOEstate Auto Invest
With the Auto Invest feature, your funds are invested for you automatically by the EVOEstate platform. You can tweak settings to ensure that your money is only invested in opportunities that meet your desired criteria.
If your money is invested automatically based on your setting, but you don’t like the investment, you can cancel within 24 hours from when it was placed and get your money back to your investment account without extra charge.
EVOEstate Secondary Market
If you cannot find investment opportunities or you were late to investing in one you liked, you might be lucky with the secondary market. In the secondary market, you can buy investments from other investors.
You can also list your investment for sale on the secondary market at no fee. To sell fast, you can give it at a discount. Alternatively, you can sell at an increased price; that is called premium on EVOEstate.
Other Crowdfunding Platforms In Europe Worthy Of Mention
Best Real Estate Investment Crowdfunding Platforms In Asia
Asia is a unique market when it comes to real estate crowdfunding. Due to restrictions that some may say come from the market system and some governments, there aren’t many crowdfunding platforms native to Asia. You might see general crowdfunding sites or crowdfunding for other purposes, such as Eureeca. But real-estate crowdfunding sites are few.
However, there’s one that I was able to confirm is still active. Besides this one, you can invest in any real estate investment crowdfunding platforms in the USA and the real estate investment crowdfunding platforms in Europe.
Founded in 2015, InvestaX started as an online investment platform focused on private equity real estate.
The company is registered in Singapore and has come a long way since its start date includes technologies such as blockchain in its process. It is regulated by the Monetary Authority of Singapore and holds a Capital Markets Services license to deal in securities.
Unlike most online crowdfunding platforms, InvestaX doesn’t provide much information on their website concerning their fees and expected average annual returns. We are sure that they only accept accredited investors according to Singapore’s Securities and Futures Act, and they also have their acceptance process along with that.
To be accepted on the platform, you must be above the age of 18 and either be an accredited investor, corporate entity, or institutional investor.
InvestaX Investment Opportunities
Given that InvestaX is quite a closed platform, we couldn’t access and assess it’s investment opportunities. If you have any inquiries or are interested in seeing what they offer, you will have to fill their contact form here and select “Invest” as your purpose.
What Real Estate Crowdfunding Platform Are You Investing With?
You have all the real estate crowdfunding platforms from major parts of the world. Which one are you interested in investing with? Let me know. Are you already investing with any of them? What has been your experience? Still have questions or suggestions, let me know.