Real estate crowdfunding isn’t a new concept, but new tech has changed the way that we do it, and the accessibility of crowdfunding as a whole.
We found the best real estate crowdfunding platforms for apartment, home, and even commercial real estate investments. Every way that you want to invest in real estate is right in front of you.
Crowdfunding real estate is a powerful way to become an investor and start making your money work for you. Let’s take a look at those who reigns supreme, and what investments you can get into.
Fundrise is the most accessible crowdfunding platform for investors, especially if you’re not entering this space with a high budget. This allows you to invest with pocket change and build your wealth, dollar by dollar. They are my #1 recommended choice after researching over a dozen real estate crowdfunding platforms.
Best Real Estate Crowdfunding Sites
Summary of Best Crowdfunding Sites of 2022
Real estate can be tricky. We went through every single app and service that we could find, looking at fees, fee structuring, YoY returns, market capitalization, and how long the companies were in service.
From there, we tested their customer service, inspected their sites, platforms, and how easy they were to contact. Above all else, it comes down to how much they charge, how secure your investments are, and the overall benefits from the platforms.
To be fair, there are a lot of solid apps and services out there similar to the ones on this list. We are in the golden age of real estate investments.
1. Fundrise - Best Overall
Fundrise takes the cake for a multitude of reasons, but the number one is simple—it’s accessible to nearly everyone. If you have a smartphone, a bank account, and ten bucks, you can start investing.
You can choose your investment types, and you pay a very low asset management fee of just 0.85%. In total, you pay 1.00% for asset management fees and advisory fees, though the latter are waived for the first 12 months.
Fundrise knows what investors want and connects them to real estate projects beautifully. Their fees can be a little complicated at times (for specific developments), but it’s the best experience hands down.
Plus, the customer support is spot-on.
2. RealtyMogul - Best for Beginners
RealtyMogul has some stupendously talented customer service, and their library of educational content makes it extremely easy to learn more about real estate investing from a trusted source.
Also, they’re 1031-friendly to help you defer taxes with your investments and continue to grow your wealth. If you can meet the high account minimum, you have access to a lot of real estate projects.
It’s easy to navigate their service and fund your account. Their reporting feature is beautifully made as well, so you can always know how your money is working for you.
3. CrowdStreet - Best for Commercial Real Estate
As great as it is for high-ticket investors, CrowdStreet just isn’t made for the average investor who may be trying to get in on the ground floor.
CrowdStreet services those with a high minimum deposit and huge net worth, and while they don’t offset any fees to the investors (aside from personalized portfolios to cover the cost of the advisors), it’s not as accessible.
They offer fast growth and amazing navigation on their service despite not having an app, and a top-tier selection of commercial real estate to boot.
4. EquityMultiple - Best for Accredited Investors
EquityMultiple is an accredited investor-only platform that doesn’t have a high minimum, but doesn’t exactly open up a lot of opportunities around the minimum, either.
You need serious money to get started and invest with EquityMultiple, so while it’s not beginner-friendly, it has impressive statistics that beat the averages of other platforms.
Users see an impressive 17.4% return rate with over $160m paid to investors at the time of writing. It’s a great platform with superior navigation, it’s just not open to everyone.
5. PeerStreet - Best for Investing in Loans
PeerStreet is all about real estate debt through loans, so you can invest in a financial product that’s centered around real estate. These are crowdfunding just like these other private REIT crowdfunding platforms, where you get a piece of the action as a fractional share.
While their fees are 1% or lower and save you money, they also strictly deal in real estate debt, so you won’t be able to diversify your portfolio specifically through PeerStreet.
You get interest on your money sitting in your account, excellent customer service, and a unique opportunity specifically for accredited investors.
How to Choose the Best Real Estate Crowdfunding Platform
You have to understand what the platform wants from you first. Is it a fee? Market capitalization power? What are they getting out of it?
Next, look at their fees. Fees are not indicative of quality, but in some situations, the product is not worth the fees that they charge, especially in an ever-growing market like real estate crowdfunding.
Once you know what they want and what you want from them, you can make a short list (like we’ve done here). You want a transparent company that tells you exactly what they want from you, and the customer reviews reflect that.
How Does Crowdfunding Work?
The third-party service then invests that money into buildings and the dividends are paid to you. These crowdfunding services may incur fees from sponsors who want their real estate holdings featured on the service in question, and may incur small fees from investors depending on which platform you go with.
The whole point is to set it and forget it, once you know what to invest in.
Is Real Estate Crowdfunding Worth it?
Real estate crowdfunding is worth it if:
- You want to diversify your portfolio.
- You have other sources of income besides annual dividends.
- You can say goodbye to money without needing it again within the next 3-5 years.
- You understand the long game when it comes to investing.
Ever since social media platforms became havens for ridiculous investing behavior and advice, there are far too many “investors” who dump their money into portfolios and don’t know what they’re doing.
Real estate crowdfunding is worth it and a long-term strategy for substantial financial growth if you’re willing to be patient, and diligent.
Real Estate Crowdfunding FAQ's
Real estate crowdfunding is one large collective pot of money, contributed to by crowdfunders and investors, and that money goes to work in various real estate holdings whether they’re residential, business, or commercial.
Your money works as a fractional share of a building or multiple buildings, and you earn money similarly to an REIT. You receive refunds based on your investments.
Yes, crowdfunding is an excellent way to make money. Real estate appreciates over time if it’s managed properly. Your internal rate of return, or IRR for short, is on average around 10% up to 17%, which is amazing for just about any investment.
On average, index funds yield between 4% and 9%, and while you should diversify with them, crowdfunding in real estate is obviously more lucrative if you can opt in.
You don’t want to start with pennies. Most of these services have strict limitations on how much you have to invest to get started.
Some are a $5,000 minimum, others are $25,000, and some won’t even take you on unless your net worth is above $1,000,000 (yes, for real). Income levels, available capital, and other factors are all taken into account as well.
Here’s the golden rule: go with a platform that you can afford, and never invest more than you are comfortable losing.
Real estate volatility changes depending on who you’re talking to. Some go all-in and make it the dominating factor of their portfolio, others won’t even touch it as an option.
Real estate in general is risky, and crowdfunding can offset those risks (but not eliminate them). You are not guaranteed anything from your investments.
It’s arguably less risky than the stock market, save for index funds, depending on which sector you invest in (commercial, residential, etc.).
Fundrise is the first investment platform to create a simple, low-cost way for anyone to access real estate's historically consistent, exceptional returns.