REAL ESTATE CROWDFUNDING BENEFITS TO INVESTORS

Mar 14, 2016
2 min read

Real estate crowdfunding offers numerous benefits for investors who are seeking direct access to private real estate investments. Compared to investing in a real estate investment trust (REIT) or purchasing a rental property, real estate crowdfunding has the edge when it comes to the following:

Transparency – One of the primary advantages that real estate crowdfunding platforms are able to offer over other types of real estate investments is transparency. With a REIT, for example, investors may only have limited information about the underlying access. We carefully vet each deal and once they become available, investors have the opportunity to review the details before making a final investment decision.
Accessibility – One of the stumbling blocks associated with private real estate deals is the high minimum buy-in that’s often required. It’s not unusual for investors to bring $50,000 or $100,000 to the table to participate. Real estate crowdfunding, on the other hand, sets the bar much lower.
Diversification – Real estate is an important component of any well-diversified portfolio and crowdfunding allows investors to fill the gaps. Between debt and investments in both commercial and residential properties, investors have the opportunity to gain exposure to a new asset class with fewer barriers to entry.
Tax Benefits – Owning an investment property comes with certain perks, including the ability to deduct depreciation and other expenses associated with the property’s maintenance. With a REIT, it wouldn’t be possible to take advantage of those tax breaks. The way crowdfunded real estate investments are structured, on the other hand, allows equity investors to reap the rewards of the depreciation deduction without having to actually own the property.