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How to Invest in Real Estate Online: Your Guide for 2022

CEO Khai Intela
Investing in real estate has always been a coveted asset class for hands-on investors. But with the rise of technology, the benefits of physical real estate can now be enjoyed online. It's now possible to...

Investing in real estate has always been a coveted asset class for hands-on investors. But with the rise of technology, the benefits of physical real estate can now be enjoyed online. It's now possible to invest in real estate online and still gain many of the advantages of tangible assets. In this article, we'll explore two popular avenues for online real estate investment: real estate crowdfunding platforms and real estate investment trusts (REITs).

Real Estate Crowdfunding Online

If you want to invest in real estate without the burden of owning a physical property, real estate crowdfunding platforms are worth considering. These platforms allow investors to pool their money together and invest in real estate projects. Rather than owning the property directly, investors contribute their capital to fund the development or purchase of the asset. Once the investment reaches maturity, investors receive profits based on their initial contribution. This allows individuals to benefit from real estate investing without the commitment of property ownership.

image alt="Investing in real estate online" Investing in real estate online

Investing in REITs Online

Another popular method of online real estate investment is through real estate investment trusts (REITs). REITs are companies that own, finance, or operate income-producing real estate assets. Many REITs are publicly traded on the stock market, providing investors with the opportunity to invest in real estate without owning a physical property. By adding REITs to their portfolios, investors can gain exposure to the real estate sector and receive capital gains through appreciation and dividends.

How to Invest in Real Estate Online & Make Money

Investing in real estate online is not a guaranteed path to riches. However, with the right approach, investors can increase their chances of success. Here are some key considerations for online real estate investors:

  • Prioritize Growth Industries: Long-term REIT investors should focus on growth industries that offer greater returns over time. While high-yield dividends can be attractive, compounding returns from growing industries can outperform them in the long run.
  • Transparency Is Invaluable: Online real estate investors must prioritize transparency, as they don't have the same first-hand information about properties. Due diligence is essential, and investment details should be clear and transparent to minimize uncertainty.
  • Beware of Dividend Traps: It may seem tempting to chase high dividend yields, but excessively high yields can be unsustainable. Investors should focus on sustainable dividend yields that are easily covered by the company's funds from operation.

Getting Started in Online Real Estate Investing

Before diving into online real estate investing, it's essential to establish clear goals and set a budget. Consider these common reasons for investing in online real estate:

  • Diversification: Online platforms offer access to a wide range of industries, allowing investors to diversify their portfolios efficiently.
  • Minimal Access to Capital: Traditional real estate can be expensive, but online platforms enable investors to participate with small amounts of capital.
  • Hedge Against Inflation: Real estate can serve as a hedge against inflation, as rental prices can be adjusted to compensate for rising costs.

Once you have a budget and investment goals, it's time to choose a platform. For REITs, popular brokerages like TD Ameritrade, Fidelity, and E-Trade offer these investment opportunities. If crowdfunding is more appealing, consider platforms like CrowdStreet, DiversifyFund, Fundrise, PeerStreet, or RealtyMogul.

Investing in real estate online can be a valuable addition to any portfolio, offering the benefits of real estate without the traditional hassles. Remember, due diligence is crucial in online real estate investing. With the right approach, you can take advantage of the opportunities offered by the real estate market.

Ready to get started? Click the banner below to join a free online real estate class and learn how to navigate today's real estate market!