A new investment that is growing in popularity is called real estate crowdfunding. This type of crowdfunding is the same as investor crowdfunding, in which you and a group of other investors pool your money together to help fund an endeavor, except this type of investment is in the form of real estate. Real estate crowdfunding is perfect for anyone who is interested in investing in property, but who does not want the stress associated with the upkeep and energy required to maintain real estate.

The money is crowdfunded until the goal is reached. If the project is not fully funded, your investment is returned to you in full. Just like any other investment in real estate, a drawback is that the investment may flop, yielding you no return, or even a loss of money.

Where can someone begin an investment in real estate crowdfunding?

The premier platform to place a real estate crowdfunding investment is through Realty Mogul. Realty Mogul was created by Jilliene Helman in Sept. of 2012. She was 27 at the time and saw limited initial success with the company; it was not until the "Jumpstart Our Business Startups Act" was passed (which helped reduce the restrictions on an investor’s ability to invest in companies via real estate crowdfunding) that the company was able to generate a great deal of success.

Today, investors claim to make anywhere from 8 to 15 percent return on investments annually, as reported by Fox Business.

A setback you may encounter when attempting to invest through Realty Mogul is that you need to be an accredited investor, which requires a net worth of $1 million and an annual income of $200,000. Luckily, there are other platforms such as Fundrise, and iFunding designed for the everyday person to make an investment in real estate.

Real estate crowdfunding vs. CDs

How much can a person make from real estate crowdfunding as opposed to a CD investment?

The return on investments made through real estate crowdfunding as opposed to even the highest yielding CD investments is significantly different. Let’s use current GE Capital CD rates to compare how much can be made between these two types of investments. For this example, we will use the lowest expected return on investment for crowdfunding in real estate, 8 percent.

The difference between these two types of investments is $56,474 in the favor of real estate crowdfunding. While no type of investment is ever secure and there is a chance you won’t get a return on your initial investment, you may want to consider looking into this form of crowdfunding as you plan your portfolio for the future.

Do your research and consider investing through reputable crowdfunding platforms such as Funrise or iFunding.

Additionally, review any investment plan to ensure your money is going into a promising endeavor. This means getting familiar with the local economy of the investment location, as well as the qualifications and reputation of the management team behind the project. Doing your homework ahead of time can help you place your investment into the right hands.

Related Articles
  1. Investing

    How To Build a Currency Hedged Strategy?

    We are still unsure of how to implement a currency hedge strategy based on the dollar's movement. So let’s focus on what’s easier to measure: time horizon.
  2. Stock Analysis

    8 Solid Utility Stocks for a Bear Market

    If you're seeking modest appreciation, generous dividend payments and resiliency, consider these eight utility stocks.
  3. Investing Basics

    How to Pick the Best Muni Bonds and Muni Bond ETFs

    Municipal bonds are a good addition to a diversified portfolio as long as you choose correctly based on population and local economic trends.
  4. Stock Analysis

    Why Phillips 66 (PSX) is a Solid Long-Term Bet

    Here's why Phillips 66 will likely remain one of the world’s largest and most profitable companies for a long time to come.
  5. Mutual Funds & ETFs

    Top 4 India Equity Mutual Funds

    Discover four of the top India-focused equity mutual funds, including their objectives, how investments are chosen and how assets are allocated.
  6. Mutual Funds & ETFs

    5 Secrets You Didn’t Know About Mutual Funds

    Learn five of the "secrets" about mutual funds that can have a significant impact on mutual fund choices and investor profitability.
  7. Investing

    Time-Weighted Rate of Return

    Time-weighted rate of return measures the performance of an investment portfolio by taking a single investment and measuring its growth or loss at the end of a time period.
  8. Investing

    2 Common Ways to Misuse Target Date Funds

    The world of asset classes is just as complicated as taking vitamins. How much should you take of small caps? Intermediate bonds? Emerging market stocks?
  9. Stock Analysis

    Is Pepsi (PEP) Still a Safe Bet?

    PepsiCo has long been known as one of the most resilient stocks throughout the broader market. Is this still the case today?
  10. Mutual Funds & ETFs

    What Target-Date Funds Can Teach About Investing

    Target-date funds are a popular way to invest for retirement. Here's what they can teach the novice investor.
  1. Are mutual funds considered retirement accounts?

    Unlike a 401(k) or Individual Retirement Account (IRA), mutual funds are not classified as retirement accounts. Employers ... Read Full Answer >>
  2. Do penny stocks pay dividends?

    Because of the small market capitalization and revenues typical of most penny stocks, there are very few that offer dividends. ... Read Full Answer >>
  3. Can you buy penny stocks in an IRA?

    It is possible to trade penny stocks through an individual retirement accounts, or IRA. However, penny stocks are generally ... Read Full Answer >>
  4. Where do penny stocks trade?

    Generally, penny stocks are traded through the use of the Over the Counter Bulletin Board (OTCBB) and through pink sheets. ... Read Full Answer >>
  5. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>
  6. Can my child have an IRA/Roth IRA?

    One of the best assets a person can have is an individual retirement account (IRA), and children can have one as long as ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!