This post may contain affiliate links, please read my Disclosure policy.
Small investors can invest in real estate with as little as $500 today
Investing in real estate has changed thanks to technology. Beginner investors can invest and receive interest from real estate without owning physical properties.
New technology has made it easies for real estate crowdfunding and real estate funds investing online.
These tools have also open the real estate market to beginner investors wanting to invest in properties with little money.
If you’re a small investor looking for dividend/interest payments, real estate investing options are available to you.
So, how can you invest in physical properties with little money or bad credit? The short answer is by investing in real estate financial assets.
Related content for Investing in Real Estate
- 9 Best passive income ideas tor early retirement
- How to do crowdfunding real estate investing
- 1o Ways to create passive income without everyday actions
- 3 Ways to make money with dividend stocks
Who is this post for?
Small investors and beginners interested in real estate investing with little money and comfortable with innovative ways to invest.
You’ll find some tips and ideas if you’re pondering any of the following real estate investing questions.
- How much money do you need to start investing in real estate?
- How can I invest $500 or $1,000 in real estate?
- How can I invest in real estate without buying properties?
- How can I invest in real estate online?
How do I start investing in real estate with little money?
Here are 3 ways to start investing in real estate with small sums of money. These are 3 top ways to invest in real estate properties.
- Crowdfunding Real Estate
- Real Estate Mutual funds and REITS
- Agricultural land investing
Investing in real estate with little money – Crowdfunding Real Estate Properties
Crowdfunding real estate gives small investors access to the real estate market without having to up a lot money. Anyone can invest in properties this way.
You can’t buy your shares and sell them in the market, like stocks or mutual funds. So, yo’ll need to use a special platform like Fundrise to start investing in crowdsourcing.
Fundrise has various investment portfolio tracks. These differ in size and initial investment requirements.
Fundrise Starter Portfolio is the basic choice for small investors. You’ll need $500 to start investing in crowdsource real estate at this platform.
This basic starter plan offers a 90-day guarantee policy. Fundrise will buy back your investment during the first 90 days, if you’re not happy with the platform.
Once you reach the $1,000 investment in the starter plan, you can also upgrade to a higher tier plan for free. These are the other investment options available with their principal requirements.
- Starter Plan $500
- Core Plan $1,000
- Advanced $10,000
- Premium $100,000
How you make money – You get a return on your money and your principal (provided the project made money) at the end of a project. Unless you buy the eREITS, these have more liquidity.
Historical return – Fundrise’s return has been between 8.76% and 12.42% in the years 2014 to 2019.
Related Content for Alternative Investments
- 7 Ways to start investing in gold as a beginner
- 6 DIY investing platform for beginners
- DRIP – A DIY method for beginner investors
- How to set up passive income investments
Real Estate Investment Trusts – REITS ETF and Mutual Funds
REITS are funds made up of real estate related company stocks and trust funds. They invest in income producing assets and are traded in the major stock exchanges.
What types of companies are in REITS?
The majority of REITs invest in these type of properties;
- Apartment buildings
- Medical facilities
- Malls
- Data centers
- Telecommunications – cell towers
- Hotels and resorts
- Residentials
These funds are traded like shares of stocks, you can buy and sell them during the treading day. Index funds are priced by the market during the day.
Index funds are easy to buy if you have a broker account at a brokerage house or at a mutual fund company.
The cost to buy depends on your broker or mutual fund company. Some companies can have higher costs for trading and others have free to low costs.
How do small investors make money with REITS?
Index funds make good investments for investors who seek dividend income or just diversification in their portfolios.
The main sources of income from REITS are from dividend payments and interests.
What are some of the best REITS?
REITS that are best for small investor have low investment and administrative costs.
Some of the best REITS include; Vanguard REITs, iShares Global REITs and TIAA REITs.
Agricultural Land Investing without owning the land
Crowdfunding investing is the concept of participation in a pool of investors to fund a project and spread the risks. Examples of Crowding include, real estate, land and commercial properties.
The risk and the funding of the entire project is participated. You are just part owner of the venture, you ae one of the crowd of investors.
There are companies buying shares or whole farms and opening investments to crowd investors who are seeking to earn royalties.
As an investor in Farmlands, you get to collect money from rents and profits provided by the farmland project.
Some of the companies providingFarmland crowdsourcing areAcreTrader and American Farms Investor.
Final Thoughts
3 Ways to Start Investing in Real Estate with Little Money
- Crowdfunding Real Estate
- Real Estate Mutual funds and REITS
- Agricultural land investing
Investing in real estate with little money is possible by not owning physical properties outright.
Some of these alternative investments are REITs and crowdfunding real estate and agricultural land.
These Instruments allow you to invest in real estate without having the responsibilities of physical ownership.
There are risks involved in REITs investing. There are the known risks like, market and institutional risks.
REITS also have a more unique risk. Interest rates can move adversely and take the value of your investment down.
Disclaimer: The funds and companies discussed in this post are not recommendations. These names are used for educational purpose only.
