Investing in real estate can be a lucrative way to build wealth, but traditional methods require a lot of time, effort, and money – not feasible for everyone. Fortunately, technology has evolved to offer a solution to this problem – real estate investing apps. These apps allow you to invest in real estate without owning any physical properties or dealing with the hassles associated with traditional real estate investing. In this blog post, we will discuss everything you need to know about real estate investing app, how to use them, and what benefits they offer.
What are Real Estate Investing Apps?
Real estate investing apps are mobile applications that allow individuals to invest in real estate properties without owning such properties physically. Through these apps, you can invest in property, either directly or via Real Estate Investment Trusts (REIT). Besides, these apps offer diverse investment options ranging from commercial real estate, residential real estate, and industrial real estate, and even agricultural land e.g., farms.
How do these apps work?
Real estate investing apps work on different models; however, one of the most popular is crowdfunding. The app operator pools funds from different investors to purchase and manage properties. From the rental income generated, investors receive dividends periodically, while the app operator takes a percentage management fee. Other platforms enable you to invest directly in REITs, which also generate dividends periodically depending on the profits made by the REITs and the fees charged.
Benefits of investing in Real Estate Investing Apps
Investing in real estate through these apps eliminates many of the problems of traditional real estate investing. For one, you can invest with as little as $500 or less, hence making the market more inclusive. And more importantly, the investment is liquid, meaning you can typically sell your investment and withdraw your money with ease. Also, the platform offers diversification as you can invest in multiple properties in different locations simultaneously.
Different Types of Real Estate Investing Apps
Various real estate investment apps offer distinct functions, rewards, and terms. Stessa, for example, is a platform that provides real-time insights into your portfolio, which can help you optimize your rental income. Roofstock allows investors to connect with property sellers directly and buy single-family rentals in markets across the US. Another platform, Fundrise, allows investors to own a portion of a diversified portfolio of institutional-quality real estate for as little as $500.
Possible risks involved in Real Estate Investing Apps
Just like any investment, real estate investments have risks. For real estate investing apps, These risks include platform risks such as the risk of platform failure, investment risks such as lack of liquidity, and inflation. Additionally, the dividends and returns can be inconsistent and may fluctuate depending on various factors such as market trends, property management, and competition.
Real estate investing apps can be a good investment opportunity for those who can’t buy a physical property with a lump sum. By diversifying your portfolio and spreading your investment across multiple real estate properties, you can benefit from the rental income generated. However, you should weigh all the risks involved before starting. Just like any other investment, do your research, understand each platform’s fees, terms and conditions, and have an investment plan that aligns with your financial goals.