EXPLORING THE DIFFERENCES BETWEEN THESE TWO INVESTMENT STRATEGIES Real Estate Crowdfunding and REITs
by Jacob Blackett
I had a penny for every time I heard someone ask, “What is the difference between real estate crowd-
the profit from renting and selling the property in the form of dividends. For real estate crowdfunding, everything is online. You select the property you are interested in, place your money online and track the progress online. That way, you can know how your property is doing in terms of adding value and losing. The whole process is transparent. You can invest in the project they are interested in as an individual. Their websites are open to the public. Real estate crowdfunding companies are not listed publicly. This makes their properties easy to fluctuate. In most cases, one property has shares from different people. This makes it hard to liquify your property. If you are interested in investing in real estate crowd- funding, you can go to their website and choose the property you want to invest in. It’s also possible to choose two different properties and divide your shares among the two because this method has low risks.
funding and REITS?” I’d be a baller. These two forms of real estate investment plans don’t involve managing and purchasing a property directly. In- vestors are also paid in dividends depending on how many shares and profits each one has. That is why it’s so easy for one to assume they are the same, but let’s look at the differences. REAL ESTATE CROWDFUNDING Crowdfunding is a familiar term. It is when businesses go online and ask for funding from different investors. Now real estate investors have adopted this method. Using online platforms, they look for various benefactors to fund their projects. That way, investors can invest in a project without actu- ally buying it or managing it. The investors are later paid
60 | think realty magazine :: november 2020
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