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How to Invest in Real Estate Online in 2020

Checkout the most rewarding opportunities currently available in 2020.
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Author: Edith Muthoni

Last Updated: May 19, 2020
Investments to represent High Interest Investments
Investments to represent High Interest Investments

Did you know that the real estate industry is considered one of the key contributors to the national GDP, pooling in an average 15% -18% to this national basket annually? Did you also know that the return on investments on real estate and property over the past century has outperformed almost every other investment class including stocks and the guaranteed government bonds?

How to Invest in...

Having lived through the 2007/8 real estate bubble that burst into a financial crisis, you probably are familiar with the impact real estate industry has on the rest of the economy.

But what do these facts tell you about investing in real estate? That, with the right strategy, the residential, commercial, and industrial property space can be both highly satisfying and rewarding.

Long gone are the days when the real estate industry was a preserve of the few members of the elite class and deep-pocketed realtors. Technology, lower mortgages, and ease of access to different types of loans have opened up the real estate space making it possible to invest from as low as $500 while promising even higher returns.

In this real estate investment guide, we list some of the most rewarding opportunities currently available. But first, let’s understand how you can earn from real estate.

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    Real estate investing can be considered to be the art of selling or purchasing, owning or leasing of land and/or any structures on it with the sole purpose of generating profits. These investments are then broken into either residential, commercial or industrial niches depending on the intended use of the land and its accompanying structures.

    How do you earn from real estate investments?

    There are four primary ways of benefiting from a real estate investment including:

    • Rent: This is by far the most popular way of earning from the real estate and involves generating incomes from leasing a property you own. It is a passive income earner and one that guarantees an almost steady income stream.
    • Profit margins: You can earn profit margins from real estate investments in either of these two ways: buying dilapidated houses, refurbishing them and selling them at a profit or by leasing a property and subletting for a higher amount and pocketing the extra amounts.
    • Appreciation in value: Land and buildings are always up-trending, the ever-rising demand for residential, commercial, and industrial properties has served to consistently boost the cost of these houses up. This explains why the real estate market has recorded the most appreciation of all classes of investments for the past 100 years.
    • Loan interest: Ideally, this method of profit generation involves lending real estate company money to help them pursue their ventures with the promise that they pay together with interest. Traditionally, this technique was a preserve of private equity funds. Technology has however birthed the all-inclusive crowdfunded real estate ventures.

    Most rewarding opportunities in real estate investing

    1.    Be a landlord – build or buy a rental property

    Building or buying rental properties that generates you steady monthly income is by far the most common form of real estate investment. It remains the most profitable of all forms of real estate management as well as the most flexible given that it can be practiced for both commercial and real estate properties and industrial complexes. The fact that you can do it semi-passively where you are involved in such acts as debt collection and maintenance or passively by engaging the services of a property manager further compounds its effectiveness.How to Invest in...

    It is, however, not the most welcoming or easiest venture to get into as it requires enormous capital investment upfront. You will also have to devote a significant portion of your time to overseeing the construction, running up and down filing up a battery of permits, and seeking approvals from different country and city departments.

    And even if you hired a construction company to handle all matters regarding the property, you will still have to check up on them regularly to check if everything is going on as planned. Not to mention that professional construction services only serve to push up the minimum capital investment required.

    Pros:

    • Gain from both the rental property and rental incomes tend to appreciate over time
    • You can minimize the risk associated with a rental property through investment
    • Simplistic acts like repainting or landscaping have huge impacts in increasing the property value

    Cons:

    • Prohibitively expensive to most investors
    • Subject to taxation and homeowners fees even when unoccupied

    2.    Crowdfund

    Real estate crowdfunding is arguably the most unconventional form of property investment. It seeks to harness the power of technology in solving all the problems associated with the conventional rental property form of investment. It ensures that even small scale investor benefits from the ever profitable industry. Key among the leading players in this niche is Fundrise, a platform dedicated to the pooling of resources from real estate market enthusiasts from all walks of life. Fundrise then researches on and invests in what they consider the most profitable venture.How to Invest in...

    Depending on the amounts pooled, the crowdfunding company may consider buying residential and commercial real estate properties or even apartment buildings. The upside to investing with Fundrise is that you don’t need to be an accredited investor. Plus you can invest as little as $500. The Washington D.C-based company gives you the chance to contribute to their eFUND plans with the promise of quarterly dividends dubbed redemption.

    And while Fundrise may have pioneered the field as the first-ever company to crowdfund its way into real estate investments, others are quickly joining. Prosper and LendingClub, two San Francisco, California-based peer-to-peer lending companies that have for long specialized in advancing unsecured personal loans to different individuals have since joined the crowdfunded real estate space.

    Pros:

    • Low investments starting from $500 at Fundrise with no need for accreditation
    • Low annual investment management fees – starting from 0.85%
    • You have the option of redeeming your investment, the full value, within 90 days of signing up
    • Gives small scale investors access to the highly lucrative commercial real estate space
    • High annual earnings – these stood at 11% in 2017 and 8% in 2018

    Cons

    • Returns from Fundraise and crowdfunded projects are taxed as ordinary income
    • Fundrise eREITs aren’t publicly-traded making them hard to redeem after the 90-day expiry period.

    3.    Real Estate Investment Trusts (REITs)

    REITs are ideally a crude form of the online crowdfunding. They involve pooling in funds from different accredited investors and using them to acquire and manage profitable real estate ventures. Like Fundrise, they too were established with the aim of helping small scale investors work around the complexities of the traditional properties and enjoy the benefits of investing in the real estate industry. Real estate investment trusts are essentially stock investments in a corporation that in turn uses these funds to invest in several real estate projects.

    The difference between crowdfunding projects run by Fundrise and REITs is that Fundrise doesn’t require investor accreditation and takes money from anyone willing to invest in the company.  REITs, on the other hand, are publicly-traded making them more liquid than the crowdfunding sites who have limited options when it comes to redeeming their investments.

    Note that there are two types of REITs with one batch investing in physical buildings while the other offers real estate-related financial services such as mortgages and last. Hybrid REITs offers a combination of the two services.

    Pros:

    • Stocks are traded in exchanges
    • Relatively straightforward acquisition and liquidation processes
    • They distribute 90% of their profits to unitholders thus guaranteeing stable cash flow
    • Some offer diversified investment portfolios

    Cons:

    • REITs are stocks and thus don’t have access to leverage
    • The fact that they have 90% of their profits limits chances of growth

    4.    House Flipping

    House-flippers are to the real estate industry what daytraders are to the equity and financial markets. Unlike the investors in rental properties and crowdfunded investments, these are traders who are actively looking to buy a property and sell it as soon as possible. Flipping houses thus involves buying at a bargain and selling houses at the highest possible price within the shortest time possible. And there are two types of flippers:How to Invest in...

    Pure flippers: This refers to a crop of traders who will only invest in fairly decent properties that don’t require any improvements to make them sell. Pure flippers, therefore, will only buy houses with an intrinsic value and use their marketing skills to help the value further without making significant renovations.

    Renovators: This class of flippers is more concerned with buying reasonably-priced houses, albeit in an unappealing condition, and making significant changes to it before pushing it to the market at a higher value. It takes longer to renovate the house and sell than it takes a pure flipper to offload house, but the net return for a renovator is higher.

    Pros:

    • Guarantees highest return in the shortest time possible
    • It is a continuous learning process with every sale readying you for the next
    • Holding onto a property for such a short time guarantees flexibility
    • Getting to deal with a lot of people on a regular basis broadens your network

    Cons:

    • Requires previous experience in real estate valuation
    • Amounts in losses if the property doesn’t sell as fast one expected.
    • Subject to short term capital gains tax

    5.    Real estate ETFs

    Exchange-traded funds (ETFs) is a collection of both stocks and bonds from a related industry. And there is plenty of them dealing with real estate stocks and equities that are both reasonably priced and presented to clients in a highly diversified manner. One of the most popular real estate-themed ETFs today is Vanguard’s VNQ that invests in stocks issued by REITs. It specializes in REITs that deal with the purchase and management of such commercial properties like office buildings and restaurants.

    There are several other equally and effective ETFs that concentrate on numerous other fuels of real estate investing, giving you a chance to invest in the trade, albeit indirectly. Some like IYR are dedicated to investments relating to the domestic real estate scene. Should you consider investing in an ETF, start by exploring their underlying real estate investment niches and only invest in one that features most markets you understand.

    Pros

    • Provide diversification as funds are distributed over numerous stocks
    • Exchange trading makes them highly liquid
    • Don’t attract capital gains thus tax efficient

    Cons:

    • Broker commissions eat into possible profits
    • Not suitable for small scale investors

    6.    Real estate investment groups

    What if you could invest directly into the real estate industry but have someone manage your rental property with the promise of guaranteed incomes even when your property remains unoccupied? That’s what real estate investment groups promise clients. It refers to a situation where a real estate company builds rental units, mostly residential properties, sells them to you but keeps on managing them on your behalf, thereby helping you establish the most ideal passive real estate income stream for you.How to Invest in...

    The management includes conducting maintenance, collecting rent, and sourcing new clients. By buying into this type of property, you are pooled in together with a group of other investors. The management then takes off a portion of all your rental incomes and pools it in a cautionary fund from which they draw their funds while they continue paying you in the months that your rental unit remains vacant. They function like real estate mutual funds with the exception that most of these groups are privately owned and managed.

    Pros

    • A more hands-off approach to investing
    • Offers an almost guaranteed income stream regardless of whether it is occupied or not
    • You gain from actual rental returns and property appreciation
    • More liquid considering that most established firms will either buy your stake or match you with interested buyers

    Cons

    • The management fees and cautionary funds eat up most of your rental income forcing you to settle on less than market rates
    • Huge privatization of management firms compound the risk of fraud and misuse of funds

    7.    Invest in a home construction company

    Residential properties, both single and multi-use family units, have been selling fast in the last decade. Their prices have also soared significantly and most experts can only link this to the limited number of units being introduced into the market today. This then presents you with the perfect opportunity to establish a home construction company, or invest in an existing one, and ride this wave of high demand for family homes.

    How to Invest in...

    The construction boom and fast uptake of family homes are expected to continue into the next few decades giving you and your new company ample time to recoup all your initial investments alongside massive interests. If you don’t have the financial muscle or the technical know-how to establish a new construction company from the ground up, consider buying into the existing ones including LGI Homes (LGIH), Pulte Homes (PHM). You can then use either platform to rehabilitate old neighborhoods or establish new ones.

    Pros

    • High scalability chance through expansion and even franchises
    • Presents you with a potential for higher profits down the line
    • The investor has the option of specializing or taking the entire industry head-on

    Cons

    • The requirements one must fill to qualify for licenses can prove prohibitive
    • Taking the business off the ground and turning profit may take time

    8. Invest in a real estate mutual funds

    The real estate industry remains one of the most attractive investment markets, and this explains the sheer number of real estate focused mutual funds out there. Two of the most interesting features of the real estate-focused mutual funds are their relatively low management costs and the minimum initial investment required. Most will also maintain a public record of their investment portfolio and profitability record. Even more importantly, most combine their management team’s expertise and years of academic research in identifying the most promising investment opportunities.

    How to Invest in...

    Real estate mutual funds appeal most to anyone looking for a passive investment opportunity with reliable incomes and minimal capital investment. And when looking for the best real estate fund to invest in, it is important that you look beyond their profitability. Look at their size, their management, investment strategies, and the level of portfolio diversification. These play the biggest role in cushioning you from both short and long-term market shocks. 

    Pros:

    • Mutual funds call for relatively affordable minimum investments
    • Most are expertly managed with guaranteed regular incomes and dividends
    • Their relatively low management fees have little impact on your incomes

    Cons:

    • They aren’t as lucrative as most other investment options
    • Most public mutual funds have been rocked with cases of mismanagement of resources

    9. Invest in a Real estate focused company

    You should also consider direct investments into real estate-focused companies. These could range from commercial/residential real estate developers and even hotels or resort management firms. And they do not necessarily have to be listed with the stock markets. Most of these are always raising capital for their next big projects by floating shares and other types of loan notes that post higher returns than most other investments in this niche.

    How to Invest in...

    Investing here, however, requires that you first conduct thorough research about the specific projects that these realtors are involved in and its profitability. You will also want to look at the preferred investment company and go through such details as their historical performance, investment portfolios, and reputation. But given the promise of high and almost guaranteed return on investment here, you can expect most of the companies to call for a rather significant capital injection.

    Pros:

    • Post higher returns than most real estate stock and mutual funds
    • They offer and a near-guaranteed return on investment
    • Allow you to invest in specific industries that you are passionate about like hotels and stadiums

    Cons:

    • Calls for significantly high capital investment
    • They aren’t as available as most other types of real estate investment

    10. Invest in contract flipping:

    Contract flipping revolves around the concept of making money off closed real investment deals by connecting sellers to buyers. A contract flipper works more like a house flipper where they spend most of their time looking for fairly-priced houses.

    How to Invest in...

    However, unlike the house flipper who buys the house and renovates it before selling it at a premium, a contract flipper connects the seller to a buyer. This could be an agent, a house flipping company, or individual buyers.

    The contract flipper can work for either the buyer or a seller. But given the high probability that either party reneges on their deal and failing to appreciate the service, most contract flippers will require that the buyer or seller they are engaged with signs a written contract. The interesting part of this is that it doesn’t require any form of investment from your part.

    Pros:

    • Most will only call for time investment thus no significant risks involved
    • Unlike house flipping, contract flipping doesn’t tie your resources as you look for the home buyer
    • Highly passive income generation idea

    Cons:

    • Most homebuyers will prefer the free house listings to often pricey contract flipping

    11. Rent a portion of your home:

    You can also consider renting a part of your home, your entire second home, or sublet apartments. Instead of buying a bungalow as a family home, you might consider investing in a duplex and renting out one floor.

    And if you don’t have enough to buy or build the building to let, you may consider renting out several apartments in some of the most populous neighborhoods and subletting them at a premium. This is most suited for individuals who already own homes or apartments and want to be directly involved in the real estate industry.

    The direct involvement here implies that you will have to go out of your way to convince tenants to rent your space and deal with such issues as taxation and rates. However, unlike building rentals from the ground up, letting what you already own as well as subletting isn’t as capital intensive.

    Pros:

    • Subletting isn’t as expensive as building own rentals
    • Subletting is semi-passive and it doesn’t require your full-time attention
    • It is hard for a tenant to go rouge on rent payment when they live on the ground floor

    Cons

    • It still ties you to the tedious landlord duties of following tenants around for rent and filing for rental taxes
    • No guarantee of full tenancy on all sublet apartments

    12. Invest in vacation rentals:

    The world is turning to technology and so is the real estate industry. One of the most popular ways of cashing in the real estate industry today is through online vacation rentals. In this case, you can choose to build and let out beach houses or extra rooms within your living space to holiday-goers. Unlike long-term leases like in the case of apartment rentals, vacation rentals are largely temporal and last no more than just a few days.

    How to Invest in...

    The income from these real estate projects is wholly passive. And just like in the case of rentals, you don’t necessarily need to own these houses. You can chose to let and sublet these vacation homes at a premium or enter into an agreement where you invest in marketing their rentals as they pay you a commission for every booking you bring their way.

    Pros:

    • Most online vacation rental programs like Airbnb will do the marketing for you
    • These programs will also automate payment processing – with little room for delays and skipped payments
    • You get to earn extra if you offer additional services like food or serve as a tour guide

    Cons:

    • These homes and rooms are only marketable during the holiday seasons
    • There is no guarantee the vacation home will be fully booked throughout the holiday seasons

    Why invest in real estate?

    • Passive incomes: Most forms of real estate investing are largely passive or semi-passive income generating streams. Whether you are building rentals or investing in a real estate-focused company, technology and the availability of numerous real estate management firms have made it possible for you to concentrate on more important factors and have them managed by these professionals.
    • Highly rewarding: The real estate market is arguably one of the most lucrative forms of investment currently available. When its aggregated return on investment over the last 145 years was measured against what most individuals consider lucrative investments like stocks and treasury bills, real estate posted a higher overall return on investment.
    • Ease-of-access to funds: Given the ridiculously low interests offered on savings accounts by banks, every individual, private institution, and even the banks are always looking for ways to invest their disposable income in more lucrative ventures. You, therefore, cannot claim a lack of access to finances as long as you have a solid real estate investment business plan.
    • Minimal risks: Most of these forms of investment are insured thereby reducing the level of risk your investments are exposed to. The industry is also massively regulated, effectively reducing incidences of fraud and conmanship.

    Bottom line

    The country's economy is ever-growing, albeit gradually, just as the population of its inhabitants. And these two are the primary drivers of demand in the real estate industry. Over the years they both have consistently pushed up the need for both residential and commercial properties, making today the most opportune time to venture into real estate.

    The ease of access to loans, numerous passive and semi-passive real estate investment options, and the ability to minimize risk through insurance help create a conducive investment environment. Before committing to one or several of these real estate investment options we advise that you consider gaining as much information about the niche to check whether it matches your client descriptions.

    Glossary of Investment Terms

    Depiction of a bond certificate and dollar coin illustrating Bonds | Learnbonds
    Bonds

    A bond is a loan made to an organization or government with the guarantee that the borrower will pay back the loan plus interest upon the maturity of the loan term. It can be advanced to the national government, corporate institutions, and city administration. It is an investment class with a fixed income and a predetermined loan term.

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    Mutual Fund

    A mutual fund is a professionally managed investment vehicle that pools together funds from numerous investors and invests it in such securities as stocks, bonds, and other money market instruments. They are headed by portfolio managers who determine where to invest these funds. They are highly regulated and invest in relatively low-risk money markets and in turn post lower rates than other aggressive managed funds.

    Illustration of an interlink depicting P2P lending | Learnbonds
    P2P Lending

    Peer-to-peer lending (p2p lending) is a form of direct-lending that involves one advancing cash to individuals and institutions online. A P2P lending platform, on the other hand, is an online platform connecting individual lenders to borrowers.

    Illsutration on a Bitcoin Coin | Bitcoin Learnbonds
    Bitcoin

    Bitcoin is the legacy cryptocurrency developed on the Bitcoin Blockchain technology. It is a new form of money primarily developed to solve some of the inherent challenges associated with fiat currencies like inflation and over-production. It is virtual (online) cash that you can use to pay for products and services from bitcoin-friendly stores.

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    Index Funds

    An index fund refers to the coming together of individuals to pool in funds that are then invested in the stock and money markets by professional money managers. The only difference between an index fund and a mutual fund is that the index fund follows a specific set of rules that track specific investments and index stocks.

    Depiction of ETF performance |ETFs Learnbonds
    ETFs

    An Exchange-traded fund refers to an investment vehicle that is publicly traded in the stock exchange markets – much like shares and stocks. The fund is expert-managed and its portfolio comprises of such investment products as stocks, bonds, commodities, and more money market instruments like currencies.

    Deprion of an elderly person on a wheelchair depicting retirement | Learnbonds
    Retirement

    Retirement refers to the time you spend away from active employment and can be voluntary or occasioned by old age. In the United States, the retirement age is between 62 and 67 years.

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    Penny Stocks

    Penny Stocks refer to the common shares of relatively small public companies that sell at considerably low prices. They are also known as nano/micro-cap stocks and primarily include any public traded share valued at below $5.

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    Real Estate

    Real Estate can be said to be the land and buildings on a given property as well as other rights associated with the use of the property like the air rights and underground rights. Real estate can be either commercial if the land, property, and buildings are used for business purposes or residential if they are used to non-business purposes – like building a family home.

    Depiction of a house illustrating Real Estate Investment Trusts (REITs) | Learnbonds
    Real Estate Investment Trust (REIT)

    REITs are companies that use pooled funds from members to invest in income-generating real estate projects. While a REIT may specialize in one real estate niche, most diversify and invest in as many high-income real estate projects as possible. They are especially interested in commercial real estate projects like warehouses, prime office buildings, residential apartments, hotels, timber yards, and shopping malls.

    A hand holding a house and dollar cash illustrating different types of assets | Asset, Learnbonds
    Asset

    Asset simply refers to any resource of value or a resource that can be owned and controlled to produce positive value by an individual or business.

    Depiction of a man with a house in mind - real estate Broker | Learnbonds
    Broker

    A broker is an intermediary to a gainful transaction. It is the individual or business that links sellers and buyers and charges them a fee or earns a commission for the service.

    chart and graph depiction of market performance illustrating capital gains | Learnbonds
    Capital Gain

    Capital gains refer to the positive change in the price of a capital asset like shares and stock, bonds or a real estate project. It is the difference between the current selling price of the asset and its lower original buying price and it is considered a taxable income.

    Dollar sack and a stack of coins showing hedge fund performance | Hedge Fund, Learnbonds
    Hedge Fund

    A hedge fund is an investment vehicle that pools together funds from high net worth individuals and businesses before having professional money managers invest it in highly diversified markets. The difference between mutual and hedge funds is that the later adopts highly complicated portfolios comprised of more high-risk high-return investments both locally and internationally.

    Depiction of an uptrending index fund | Learnbonds
    Index

    An index simply means the measure of change arrived at from monitoring a group of data points. These can be company performance, employment, profitability, or productivity. Observing a stock index, therefore, involves measuring the change in these points of a select group of stocks in a bid to estimate their economic health.

    A downtrending market and a dollar coin depicting a recession | Learnbonds
    Recession

    A recession in business refers to business contraction or a sharp decline in economic performance. It is a part of the business cycle and is normally associated with a widespread drop in spending.

    Tax, dollars and percentage depictions of a Taxable Account | Learnbonds
    Taxable Accounts

    Taxable Account refers to any investment account that invests in shares and stocks, bonds and other money market securities. The account is offered by a brokerage company and you are obliged to report and pay taxes on the investment income each year.

    Calculator, percentages and form illustrating a Tax-Advantaged account | Learnbonds
    Tax-Advantaged Accounts

    A tax-advantaged account refers to savings of investment accounts that enjoy such benefits as a tax exemption or deferred tax payment. Roth IRA and Roth 401K are examples of tax-exempt accounts whose contributions are drawn from after-tax incomes with the yields generated from investing funds therein being tax-exempt. Traditional IRA, 401K plan and college savings, on the other hand, represent tax-deferred accounts. Their contributions are deductible from your current taxable incomes but you get to pay taxes on their accrued incomes.

    Yiled Sign | Yield, Learnbonds
    Yield

    Yield simply refers to the returns earned on the investment of a particular capital asset. It is the gain an asset owner gets from the utilization of an asset.

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    Custodial Accounts

    A custodial account is any type of account that is held and administered by a responsible person on behalf of another (beneficiary). It may be a bank account, trust fund, brokerage account, savings account held by a parent/guardian/trustee on behalf of a minor with the obligation to pass it to them once they become of age.

    Hand holding different assets - house and cash - illustrating how asset management company works | Learnbonds
    Asset Management Company

    An Asset Management Company (AMC) refers to a firm or company that invests and manages funds pooled together by its members. Like mutual or hedge funds, the AMC creates diversified investment portfolios that comprise of shares and stocks, bonds, real estate projects, and other low and high-risk investments.

    Depictio of man thinking of money and risks illustrating a Registered Investment Advisor | Learnbonds
    Registered Investment Advisor (RIA)

    A registered investment advisor is an investment professional (an individual or firm) that advises high-net-worth (accredited) investors on possible investment opportunities and possibly manages their portfolio.

    Depiction of percentage growth rate of funds depicting Fed Rate percentage changes | Learnbonds
    Fed Rate

    The fed rate in the United States refers to the interest rate at which banking institutions (commercial banks and credit unions) lend - from their reserve - to other banking institutions. The Federal Reserve Bank sets the rate.

    Depiction of grrowing stacks of coins illustrating fixed income rates | Learnbonds
    Fixed Income Fund

    A fixed-income fund refers to any form of investment that earns you fixed returns. Government and corporate bonds are prime examples of fixed income earners.

    Dollar sack and potted plant depicting how assets grow in a Fund | Learnbonds
    Fund

    A fund may refer to the money or assets you have saved in a bank account or invested in a particular project. It may also refer to the collective basket of resources pooled from different clients that are then invested in highly diversified income-generating projects.

    Depiction of a values of coin going up or down illustrating value investing | Learnbonds
    Value Investing

    Value investing is the art of using fundamental analysis to identify undervalued shares and stocks in the market. It involves buying these shares at the current discounted prices and hoping that a market correction pushes them up to their intrinsic value effectively resulting in massive gains.

    A plant groning on a stack of cash illustrating impact investing | Learnbonds
    Impact Investing

    Impact investing simply refers to any form of investment made with the aim of realizing financial returns while positively impacting the society, environment or any other aspect of life in the process. Investment in solar projects and green energy, for instance, posts profits and helps conserve the environment.

    Magnifying glass on a smartphone screen illustrating how Investing App works | Learnbonds
    Investing App

    An investment App is an online-based investment platform accessible through a smartphone application. It lets you save and invest your funds in a preset portfolio that primarily consists of shares and stocks, bonds, ETFs, and currencies based on your risk tolerance.

    A gorup of individuals and a dollar coin showing how crowdfunding works | Real Estate Crowdfunding, Learnbonds
    Real Estate CrowdFunding

    Real Estate crowdfunding is a platform that mobilizes average investors – mainly through social media and the internet – encourages them to pool funds, and invests them in highly lucrative real estate projects. It can be said to be an online platform that brings together average investors and lets them enjoy real estate projects previously preserved for high net worth and institutional investors.

    FAQ's

    How much do I need to start investing in real estate?

    If you hope to start a real estate construction company or buy/build rental property, a substantial amount have to be invested. But if you are to invest in the more revolutionary crowdfunding real estate ventures like Fundrise and Rich Uncles you can invest with as little as $500.

    How do I earn from Fundrise?

    Fundrise offers two types of returns in the form of quarterly dividends distributed from profits earned through the utilization of your cash as well as the appreciation of your real estate shares. The company will also send you periodic cash advances if and whenever they decide to offset some of their assets under management. Plus, they promise to review the value of your shares based on the value of their underlying asset quarterly or semi-annually.

    Is real estate investing right for me?

    Yes, everyone stands to benefit from real estate investments. The fact that it is probably the most lucrative investment plus most of the investment options here don’t require prior experience in real estate makes it the most suitable for virtually anyone looking to invest or diversify their options.

    How much of skills and resources do I need before I start investing in real estate?

    No, unless you want to start flipping houses or establish a construction company, both of which require a tad bit of previous exposure in the industry. The rest that can be done through such proxies as property managers and Fundrise and don’t require you to have previous skills or experience in the industry.

    Am I too late in getting into property investments?

    Most investors that ventured into real estate right after the 2007/8 bubble burst, at a time when most residential and commercial properties sold for pennies, have earned 500%+ on most of these investments. But the industry is still on recovery mode and the demand for property is constantly exceeding demand, pushing prices up, and your possible returns on investments expected to be even higher.

    How do I decide on the best investment strategy?

    Based on your previous real estate industry experience (or lack of it) and the amount of disposable income at hand, you will find some of these investment options more appealing compared to others.

    Which is better between real estate and stocks?

    The performance of different stocks may outperform the real estate investments in the short term, but real estate ventures always have the last laugh. The high volatility witnessed in the stock and equity markets will often see the value of stocks constantly fluctuating between big wins and deep losses while the relatively stable real estate ventures assume an uptrend for the better part of their term.

    Will my real estate investment guarantee stable and consistent profits?

    No, even rental income that is often considered one of the most fluid forms of investment often fails the consistency test for the months falling in between the termination of tenancy and scoring another.

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    Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments. She holds a Masters degree in Economics with years of experience as a banker-cum-investment analyst. She is currently the chief editor, learnbonds.com where she specializes in spotting investment opportunities in the emerging financial technology scene and coming up with practical strategies for their exploitation. She also helps her clients identify and take advantage of investment opportunities in the disruptive Fintech world.

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