Investing in real estate is a great way to both diversify your portfolio and earn passive income and/or capital gains. However, owning real estate can present some challenges, especially for a first-time investor.
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For starters, the best way to generate profits from real estate is to have expert knowledge of properties that are good deals. In other words, while everyone knows that “location, location, location” is what makes real estate investments a winner, a new investor may not have a clue what “location” is. ‘location’ is ideal.
That’s why the use of real estate apps has been so popular. Now you can collectively invest in an expertly managed real estate portfolio at your fingertips, often at a lower cost. But as with other forms of investing, some platforms are better options to use than others. Here is a list of some of the best real estate investment apps you can choose from, depending on the type of investor you are.
Happy Nest is a good property investment app to check out because it doesn’t charge any fees. In just minutes—and with just $10—you can create an account and immediately begin investing in a diversified portfolio of income-producing investments. Much like the pioneering savings app Acorns, Happy Nest also lets you link your credit or debit cards and round up your purchases to the nearest dollar, with the extra money invested directly into your Happy Nest real estate account. .
Happy Nest primarily invests in properties leased from Fortune 100 companies like FedEx and CVS. Recently, the company has expanded its portfolio to include industrial and multi-family properties, with the belief that this type of diversification reduces risk, increases stability and increases long-term returns.
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DiversyFund is another option that may appeal to newbie investors as it is simple to use and has a minimum investment of just $500. Like Happy Nest, DiversyFund also does not charge any management or transaction fees. However, DiversyFund focuses exclusively on multi-family assets, which the company says have historically outperformed the S&P 500 index and provide a hedge against inflation.
Currently, the company’s portfolio consists of the following:
- 12 multi-family assets
- $175 million in estimated value
- 1 million square feet of rental storage space
- Diversified assets in six states
- Over 500,000 community members
The app offers an auto-invest feature so you can continually add to your portfolio. It also contains detailed information about real estate in general, so you can deepen your understanding as you build your portfolio.
Groundfloor calls itself a “savings” app, as it offers everything from a basic savings account and loan options to an investment account backed by prime real estate. The investment app allows users to choose between individual renovation projects or automatic investments according to your own personal criteria. The assets are invested in residential real estate.
Groundfloor pays out investments every four to 12 months on average, so if you invest continuously for four consecutive months, you should start receiving distributions monthly thereafter. The app boasts average annual returns of 10% over the past eight years, and it has no investment fees or maximum balance restrictions.
The app has over 200,000 investors and over $240 million under management, and it only requires $10 to get started.
CrowdStreet is an interesting option because it is the opposite of the beginner apps listed above. To begin with, CrowdStreet only invests in commercial real estate properties. However, rather than handing over your money to a blind pool entirely managed by professional managers, CrowdStreet gives you direct access to specific sponsored real estate listings in which you must choose to invest on your own. If your offer is accepted, you become the direct owner of this listing, along with other investors who have pooled their money to make the investment.
For example, you can choose to invest in the “Evanston Multifamily Portfolio,” which consists of a multifamily portfolio of five properties in downtown Evanston, Illinois. This type of investment requires more knowledge from the investor, so CrowdStreet is only available to accredited investors who can invest at least $25,000.
As of September 2022, the app has raised $3.93 billion, initiated 661 transactions, and delivered an internal rate of return of 18.5%.
One thing to note is that although CrowdStreet does not charge any management fees, you will have to pay the list sponsors to access their offers. But if you’re already an experienced real estate investor, CrowdStreet might appeal to you more than some of the other apps out there.
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This article originally appeared on GOBankingRates.com: 4 Best Real Estate Investing Apps
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