In recent years, alternative investment platforms have gained popularity among investors seeking higher yields and new asset classes. These platforms provide access to investments such as real estate, peer-to-peer lending, and venture capital, offering a way to build a diversified portfolio outside of the stock market.

Finding the right alternative investment platform is crucial for maximizing your returns and managing risk. With so many options available, it’s important to do your research and choose a platform that aligns with your investment goals and risk tolerance. This article explores some of the best alternative investment platforms to help you make an informed decision.

Quick Look: Best Alt Invest Platforms

• Best for Passive Impact Investing: DLP Capital
• Best for Fractional Real Estate: Arrived Homes
• Best for Diverse Range of Offerings: Yieldstreet
• Best for Artwork: Masterworks
• Best for Real Estate Crowdfunding: CrowdStreet
• Best for Various Investments: Public.com
• Best for Real Estate Notes: Groundfloor
• Best for Wine and Whiskey: Vinovest

Best Alternative Investing Platforms

Thanks to the internet, there are now dozens of alternative investment platforms where you can pick and choose what to invest in while someone else does the heavy lifting. Here are some of the top alternative platforms.

Best for Passive Impact Investing: DLP Capital

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High-End Wealth Investors

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DLP Capital is an impact-driven private real estate investment firm providing accredited investors with access to investments that aim to address the housing crisis. By investing in attainable workforce housing for moderate-income renters, DLP can give back and help accredited investors strengthen their financial legacies.

Best For

• Individual investors seeking passive income
• Accredited investors
• Investors interested in private investments to diversify away from the stock market
• Experienced investors looking to diversify their portfolio
• Investors seeking investments with strong due diligence and screening

Pros

• High returns on investments
• Four funds allow you to choose the strategy that works best for you
• Focus on workforce housing, a growing area with high demand
• Monthly dividends with automatic reinvestment

Cons

• High $200,000 investment minimum
• Only for accredited investors
• Fund system offers limited portfolio customization

DLP Capital is an impact-driven private real estate investment firm providing accredited investors with access to investments that aim to address the housing crisis. By investing in attainable workforce housing for moderate-income renters, DLP can give back and help accredited investors strengthen their financial legacies.

DLP Capital offers a series of multifamily real estate investments in high-demand metros across the Sunbelt. The private real estate investment firm’s sponsored equity and credit funds target passive income, long-term appreciation, or both. As a result, accredited investors can gain exposure to private real estate that makes a difference without all the management fuss.

Best for Fractional Real Estate: Arrived Homes

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$100 Minimum Investment

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$100 Minimum Investment

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Arrived is a real estate investment platform that allows individuals to invest in rental properties with low capital. Founded in 2019 and backed by notable investors, Arrived enables fractional ownership of single-family rental homes, making real estate investing more accessible. With a fully managed approach, investors earn passive income without the responsibilities of property management. This review explores Arrived’s investment process, returns, fees, and overall suitability for different types of investors.

Best For

• Small- to medium-sized investors
• Investors interested in rental income
• Investors looking to diversify

Pros

• Buy-ins as low as $100
• Open to non-accredited investors
• Offers ownership shares in real property (and all the tax benefits)
• Multiple ways to earn dividends (rental income and property appreciation)
• Great way to diversify portfolio
• Open to self-directed individual retirement accounts (IRAs)
• Detailed analytics and data to help investors make informed decisions and maximize their returns

Cons

• Long hold periods
• No secondary market to liquidate shares

Arrived Homes is one of the newest and fastest-growing crowdfunding platforms on the internet. The company allows non-accredited investors to buy shares in carefully selected rental properties.

The minimum investment is only $100, making it easy to start earning passive income from property investments and to diversify across multiple properties. Investors simply collect quarterly dividends from their properties while waiting for the asset to increase in value over time. Arrived Homes takes care of finding tenants as well as all the management.

Best for Diverse Range of Offerings: Yieldstreet

Best For

Diverse Range of Alternative Investments

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Diverse Range of Alternative Investments

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Yieldstreet is an alternative investment platform that provides access to asset classes typically reserved for institutional investors. Founded in 2015, it offers opportunities in real estate, art, marine finance, legal finance, and more. By focusing on income-generating investments with varying risk levels, Yieldstreet aims to help individual investors diversify their portfolios and potentially achieve higher returns. This review explores Yieldstreet’s offerings, fees, returns, and overall suitability for different types of investors.

Best For

• Accredited investors looking to diversify
• Alternative investments to stocks and bonds
• Investors looking for passive income

Pros

• Easy-to-use platform
• Carefully selected offerings
• Excellent mobile app
• Full spectrum of alternative offerings
• Options for non-accredited investors

Cons

• Majority of investments only open to accredited investors

Yieldstreet offers an all-in-one alternative investment platform with offerings for non-accredited investors as well as offerings available to accredited investors only. Yieldstreet regularly has new investment opportunities available, ranging from commercial real estate, art equity funds, structured notes, portfolios of consumer debt and many others.

Even if you’re not quite ready to jump into one of Yieldstreet’s offerings, it’s worth signing up for the platform to gain access to the many webinars and educational content available to learn the ins and outs of various types of alternative investments.

Best for Art: Masterworks

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Art Investing

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Art Investing

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Masterworks provides an opportunity for investors to invest in blue-chip artworks by renowned artists, such as Basquiat, Warhol, and Koons, without having to buy the entire artwork themselves. Instead, investors can purchase shares in a specific artwork, allowing them to own a fractional interest in that piece.

By investing in art through Masterworks, individuals can access an asset class that has historically demonstrated strong long-term returns and low correlation to traditional financial markets. This can help investors spread their risk and potentially achieve higher returns over time. Moreover, Masterworks leverages its expertise in the art market to carefully select and acquire artworks that have the potential for significant value appreciation, offering investors the chance to profit from the art market without the hassle of managing an art collection.

In this article, we review Masterworks’ offerings, usability, customer support, returns, fees and educational support to help you decide whether you should use this art investing platform.

Best For

• You want to diversify your portfolio with alternative investments
• Those interested in investing in art

Pros

• A dedicated representative from RIA-affiliate Masterworks Advisers available upon request who will determine if art investing is a fit for you, help you invest, and answer questions
• Clean, attractive, easy to use platform design for desktop and mobile
• Track record: 9 – 39% net annualized returns
• Masterworks manages the entire process of sourcing, purchasing, and storing artwork

Cons

• Requires a phone call before you can invest
• Hedge fund like fees can be confusing for new investors
• Offerings sell out quickly due to demand

This alternative investment platform is based on fine art. It identifies select artists and buys works, which are then registered with the Securities and Exchange Commission (SEC) as a regulation A share offering. Investors will then share in the profits when the artwork they’ve invested in is sold.

Masterworks features works from famous artists both living and dead. It even has works by Banksy — the pseudonym of the England-based Street artist. This is, however, a long-term investment. Unlike investment in real estate, there is no residual income generated by Masterworks investments, and investors must be willing to wait for several years before earning a dividend.

Best for Real Estate Crowdfunding: CrowdStreet

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Accredited Investors

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Accredited Investors

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One of the key benefits of investing in commercial real estate is the potential for attractive returns. This asset class often provides steady cash flow through dividends, adding diversity to your investment portfolio with tangible assets. By diversifying into commercial real estate, investors can access a market that is the third-largest after equities and bonds.

Making the transition from single-family real estate to commercial properties may seem daunting at first. Investing in commercial real estate through platforms like CrowdStreet can provide investors with access to a wide range of opportunities across different property types and markets.

CrowdStreet offers a platform where investors can browse and select specific commercial real estate projects to invest in, allowing for greater control over their investment decisions.

Best For

• Accredited investors
• Long-term investors
• Investors looking to diversify from stocks

Pros

• User-friendly interface
• Diverse investment offerings
• Great investor resources
• Proven performance history
• Many offerings eligible for inclusion in self-directed IRA

Cons

• Accredited investors only
• Most offerings require a $25,000 minimum investment

CrowdStreet is a real estate crowdfunding platform that offers investors the chance to purchase equity shares in various real estate investments around the country. It’s a great way to get involved in property investing, but you must be an accredited investor to buy into any CrowdStreet offerings. That means only investors who pass a certain net worth threshold are eligible.

If you are accredited, CrowdStreet offers some great investment opportunities with the potential for very high returns. The downside is that the minimum buy-ins are on the high side, and most CrowdStreet investments don’t pay dividends for several years.

Best for Various Investments: Public.com

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Trading Ideas

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Best For

Trading Ideas

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Public is the only investing platform that lets you trade stocks, ETFs, crypto, bonds, options and alternative assets—like fine art and collectibles—all in one place. Public also provides access to custom company metrics, live shows about the markets, and insights from a community of millions of investors, creators, and analysts.

Today, Public provides more ways to create a diversified portfolio than nearly any other online broker. Members can engage in sophisticated investing strategies and access a wealth of investing insights—from company-specific analysis to live audio shows and town hall-style Q&As. In addition, Public offers a premium membership tier with unique company KPIs, detailed performance metrics, and institutional-grade research. 

 

Best For

• Stock and ETF investors
• Crypto investors
• Investors looking to diversify with alternative assets or bonds and options

Pros

• Commission-free stock and ETF trading
• Fractional share investing
• Advanced data, tools, and insights with Public Premium

Cons

• You can’t transfer crypto to another wallet
• No mutual funds or precious metals
• At this time, only offers individual brokerage accounts and not IRAs

Public.com is a modern investment platform designed to make investing more accessible and engaging for both novice and experienced investors. The platform offers a wide range of investment products, including stocks, ETFs, cryptocurrencies, options and bonds, giving users a variety of ways to build diversified portfolios. One of Public’s standout features is its emphasis on transparency and community, allowing users to share ideas, insights, and trades in a social-media-like feed, fostering a collaborative investing environment.

Unlike traditional brokerages, Public.com removes the complexities that can sometimes deter people from investing. With commission-free trading, the platform makes it affordable to invest in a broad range of assets, from individual stocks to crypto. Public is also known for its fractional share investing, which allows users to invest in high-priced stocks with just a few dollars, making even expensive stocks accessible to everyone.

Best for Real Estate Notes: Groundfloor

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Low Fees and $100 Minimum Investment

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Low Fees and $100 Minimum Investment

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Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investments. As of February 2025, more than 260,000 investors had invested over $1.63 billion in Groundfloor.

Groundfloor updated its experience in October 2024 to offer more fractionalization and automation to offer a set-it-and-forget-in approach for all investors. Individuals with small portfolios will also like the low $100 minimum, automatic diversification and nominal investor fees. Most loans are lent to real estate entrepreneurs looking to flip homes or build new ones on vacant land. While there is a risk of borrowers defaulting on their loans, Groundfloor puts itself into a first lien position to mitigate as much risk as possible. Even if a borrower defaults on a Groundfloor loan, it doesn’t necessarily mean you lose your investment. More often than not, you still get a return, albeit not as high as the original estimate. The average return rate for defaulted loans from Groundfloor is 6%, which is still higher than money markets.

Best For

• Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
• Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
• Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.

Pros

• Charges the lowest minimums in the industry ($100)
• 10% historical annualized returns
• Open to non-accredited investors
• Mobile app that allows automatic investing and diversification
• Offers shares in its own notes as well as shares in convertible debt notes

Cons

• Offers no bankruptcy protection
• High rate of an uncured default

Groundfloor is an alternative real estate investing platform that offers investments in high-yield, short-term property loans. The platform is open to non-accredited investors and private individuals looking for active real estate alternative investments. Groundfloor has great volume with an average of 50-70 investments available at any given time.

Individuals with small portfolios will also like the low $10 minimum investment and zero investor fees. The low minimum investment allows investors to easily diversify their Groundfloor portfolio across multiple loan offerings.

Best for Wine and Whiskey: Vinovest

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Investing in Wine and Whiskey

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Investing in Wine and Whiskey

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Vinovest is a platform that’s breaking down barriers of the once gatekept world of wine investments. Vinvovest makes investing in wine easily accessible by offering fully-managed wine portfolios designed with artificial intelligence and industry experts.

The platform manages the bulk of the wine investment process, from selecting, acquiring, insuring, securing and storing authenticated bottles. Investors are able to monitor their wine portfolio online and even access their wine supply in real life, anytime. Vinovest combines the knowledge of experienced sommeliers, wine directors at Michelin star restaurants, as well as leaders from giants like Apple (NASDAQ: AAPL), Bytedance and more. The end goal is to offer investors access to fine wine investments that deliver the potential for solid returns and diversification.

Vinovest is a leading wine investment platform — and for good reason. Take a look at all the pros and cons to Vinovest, as well as all the factors that make this platform stand out in the world of wine investments.

Best For

• Access to the wine investment market
• Portfolio diversification
• Fully managed portfolios
• Alternative assets

Pros

• Open to all investors (accredited and non-accredited alike)
• Wine investments have low market correlation
• Learn from wine experts and tech leaders
• Provides fully-managed portfolios
• Wine is insured, authenticated, stored and more
• Transforms wine investments into liquid assets

Cons

• Minimal information on how portfolios are constructed
• Selling a portfolio can take several weeks to liquidate
• Vinovest is a relatively new platform

Vinovest is a platform that’s breaking down barriers of the once gatekept world of wine and whiskey investments. They make investing in these assets accessible by providing fully managed portfolios guided by AI and industry experts.

Vinovest manages the entire wine or whiskey investment process, including selecting, acquiring, insuring, securing and storing bottles and casks. Investors can track their wine portfolio online and request shipments or whiskey bottling once maturity is reached. The platform combines expertise from sommeliers, distillers, wine directors, and industry leaders. The goal is to provide investors with access to fine wine and whiskey investments for potential returns and diversification.

What is an Alternative Investment?

Any investment you make in something outside of stocks and bonds is considered an alternative investment. It may sound exotic but in reality, people have been making alternative investments for a long time.

Historically, real estate and gold are two of the most popular alternative investments. You can diversify your portfolio by making alternative investments as supplements to your stocks and bonds, or you can have a portfolio that consists entirely of different alternative investments.

Types of Alternative Investments

As discussed in the section above, real estate and gold are two of the most commonly held alternative investments. With that said, there is a multitude of alternative investments you can make. Here are some of the most popular options:

• Rental or investment properties
• Precious metals (gold, silver, platinum)
• Cryptocurrencies like Bitcoin or Dogecoin
• Non-fungible tokens (NFTs)
• Startups
• Collectibles such as baseball cards, historical items and rare jewelry
• Wine
• Art

Diversify With Preferred Alternative Investments

Alternative investments may sound like a fancy, New Age concept, but that’s far from the truth. In fact, if you own property, you have already made an alternative investment. Many people who see the wisdom of investing, but are put off by the volatility of the stock market, have been gravitating toward alternative investments for quite some time.

With that said, it’s important to remember that there is an incredible variety of alternative investments outside of real property or even gold. The rise of internet-based alternative investment platforms has opened up a whole new world to potential investors.

Now you can buy shares of startup companies, wine futures and even sports collectibles as alternative investments. Some have high payoffs and an elevated risk level, while others may require investor accreditation and the ability to wait a long time before earning a dividend.

Other alternative investments have an active secondary market that allows you to liquidate your shares quickly. The variety is nearly limitless. Alternative investments can be a great way to diversify your portfolio, but you still must consider the risks and choose wisely. As always, Benzinga is a great place to go for neutral information on all the pluses and minuses.

Frequently Asked Questions

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A Real Estate Limited Partnership (RELP) is an investment structure that allows multiple investors to pool their resources to acquire, develop, or manage real estate projects. In a RELP, there are two main roles: the general partner, who manages the investment and takes on full liability, and the limited partners, who contribute capital but have limited liability and no active management responsibilities.

This setup gives investors access to larger or more complex real estate deals while benefiting from professional management. RELPs can offer attractive returns and diversification, but they also come with risks and limited liquidity, making due diligence essential before investing.

How Do Real Estate Limited Partnerships Work?

RELPs work a lot like a traditional business partnership. You get a group of like-minded investors who contribute money and form a limited liability partnership that exists for the purpose of making real estate investments. Each of the partners receives equity in the properties purchased by the RELP at a rate proportional to the size of their investment.

So, for example, if there were five investors who all put in $200,000 to buy $1,000,000 worth of real estate, each of them would have a 20% equity share in the property. However, before the RELP actually purchases a property, it must have a partnership agreement to define its structure and operating procedures.

How are RELPs Structured?

RELP agreements can be structured in a variety of different ways depending on the partners’ investment goals. Every RELP agreement will establish standard modes of operation that include:

• Names of the investors
• Amount of capital pledged by each investor
• Plan for the distribution of investment income or capital
• Date of operation for the partnership
• Amount of equity for each partner

Along with the RELP’s basic set-up, the partnership agreement also needs to name the RELP’s general partners and its limited partners. Limited partners have equity shares but don’t participate in managing the investment or making decisions for the fund.

General partners will be responsible for things like making sure the investment is properly run, including maintenance, renovations, direct management of the asset, or direct supervision of management.

They sign the checks and bear the most responsibility for making sure the RELP is profitable. The limited partners in a RELP place an enormous amount of faith in the general partner. That’s why the general partner in a RELP should be someone with extensive experience in managing real estate assets.

What Do RELPs Invest in?

Most RELPs are focused on commercial real estate because undervalued commercial real estate assets can generate huge profits under smart, proactive management. Examples of the kinds of commercial properties RELPs target include:

• Multi-family residential
• Industrial
• Mixed-use developments
• Storage facilities
• Office parks
• Medical centers

The high cost of buying and renting single-family homes in some of America’s largest cities has led to RELPs buying multiple single-family homes instead of just concentrating on traditional commercial real estate opportunities.

How Are Profits Distributed?

Profits from RELPs are distributed in the manner dictated in the operating agreement. If the RELP is invested in income property such as apartment buildings or commercial real estate, distributions are usually made on a monthly or quarterly basis. Distributions are made after expenses like property taxes, debt service, maintenance, and insurance are taken out of the gross revenue.

In cases where the RELP has purchased a property with the goal of rehabilitating it and selling it at the end of a defined period, the profits are usually paid out after the asset is sold. RELP distributions are made to individual investors based on the size of their equity share in the partnership.

How Are RELPs Taxed?

RELPs are pass-through entities, meaning all the revenue generated by the RELP is distributed to the partners, which leaves the RELP without profits to be taxed. However, each individual partner in the RELP will pay taxes on the pass-through income they receive from the RELP.

Partners also have limited liability for the RELP’s losses or expenses based on their equity share. If a five-person partnership spent $100,000 in a year on expenses, each partner would be entitled to write off $20,000 against their distributions. That’s why one of the most important roles that a RELP’s general partner performs is making sure the partnership completes IRS Form 1065 each year.

Form 1065 is a tax form that informs the IRS how much money the RELP distributes to each partner. Partners receive a K-1 form from the RELP that breaks down their individual distributions and expense shares. RELP shareholders are also entitled to take a proportional depreciation write-off along with the 20% tax break in pass-through income that became law under the Tax Cuts and Jobs Act of 2017.

Benefits of Investing in a RELP

RELPs offer several significant benefits to real estate investors.

• Syndication Opportunities: They give investors syndication opportunities that allow them to buy more property as a group than they could individually, and offer real estate investors the chance to generate passive income for themselves.
• Tax Breaks: The nature of RELPs being set up as pass-through entities allows individual partners to benefit from a host of tax breaks, most notably the 20% pass-through income write-off.
• Huge Payoff: Last and perhaps most importantly, the end payoff to investors from a value-add RELP asset that gets sold in a hot market can be huge.

Potential Risks of Investing in a RELP

Although RELPs offer investors significant potential profit, they are not without risks and downsides.

• Illiquid Investment: RELPs are private partnerships, which means your investment will likely remain illiquid for the duration of the partnership. Most RELP agreements call for the partnership to last for several years, and the private nature of RELP partnerships means there is no secondary market where you can liquidate your equity shares.
• No Role of Limited Partner: A RELP is only as good as the general partner who manages it. As a limited partner, you’re basically a passenger in a car being driven by the general partners. They are responsible for management decisions and executing the RELP’s business plan. If your RELP is poorly managed by its general partners, it’s unlikely you will see a return on your investment. Conducting proper due diligence before investing is critical.
• Timing of Investment: Finally, there is an element of timing that is beyond your control. Although real estate investments typically perform well over the long haul, the timing of your RELP investment and how it fits into what the market is doing is important. If your RELP’s investment period ends in a down cycle or interest rates go up when the RELP needs to borrow money, you could be in trouble.

How to Invest in RELPs

Investors have a variety of options for putting their money into RELPs. Theoretically, you and a group of your friends could form your own RELP and begin making investments of your own. However, that requires an incredible amount of legwork, research, and most importantly, experience. If you and your would-be partners are not experienced real estate investors, forming your own RELP is probably more liability and trouble than it’s worth.

A much more practical way of investing in RELPs is through online crowdfunding investment platforms. You will find a number of exciting RELP opportunities in this list of Benzinga’s Best online real estate investing platforms.

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$100 Minimum Investment

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Arrived is a real estate investment platform that allows individuals to invest in rental properties with low capital. Founded in 2019 and backed by notable investors, Arrived enables fractional ownership of single-family rental homes, making real estate investing more accessible. With a fully managed approach, investors earn passive income without the responsibilities of property management. This review explores Arrived’s investment process, returns, fees, and overall suitability for different types of investors.

Best For

• Small- to medium-sized investors
• Investors interested in rental income
• Investors looking to diversify

Pros

• Buy-ins as low as $100
• Open to non-accredited investors
• Offers ownership shares in real property (and all the tax benefits)
• Multiple ways to earn dividends (rental income and property appreciation)
• Great way to diversify portfolio
• Open to self-directed individual retirement accounts (IRAs)
• Detailed analytics and data to help investors make informed decisions and maximize their returns

Cons

• Long hold periods
• No secondary market to liquidate shares

Best For

Diverse Range of Alternative Investments

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Diverse Range of Alternative Investments

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Yieldstreet is an alternative investment platform that provides access to asset classes typically reserved for institutional investors. Founded in 2015, it offers opportunities in real estate, art, marine finance, legal finance, and more. By focusing on income-generating investments with varying risk levels, Yieldstreet aims to help individual investors diversify their portfolios and potentially achieve higher returns. This review explores Yieldstreet’s offerings, fees, returns, and overall suitability for different types of investors.

Best For

• Accredited investors looking to diversify
• Alternative investments to stocks and bonds
• Investors looking for passive income

Pros

• Easy-to-use platform
• Carefully selected offerings
• Excellent mobile app
• Full spectrum of alternative offerings
• Options for non-accredited investors

Cons

• Majority of investments only open to accredited investors

Best For

Beginner Real Estate Investors

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Best For

Beginner Real Estate Investors

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Fundrise is an online real estate investment platform that allows individuals to invest in a diversified portfolio of commercial real estate properties. The platform pools investor funds and uses them to acquire, manage, and sell various types of real estate assets, such as apartment buildings, office spaces, and retail centers.

One of the key advantages of Fundrise is its accessibility to individual investors who may not have the capital or expertise to invest directly in real estate. By pooling funds together with other investors, Fundrise allows individuals to access a diversified portfolio of real estate assets without having to purchase properties on their own.

Fundrise also offers transparency to its investors. The platform provides regular updates on the performance of the portfolio, allowing investors to track their investments in real time. Additionally, Fundrise offers a user-friendly interface that makes it easy for individuals to invest and manage their portfolios online.

Best For

• New real estate investors looking to get their feet wet
• Non-accredited investors
• Real estate investors who want a “set-it and forget it”-oriented option
• Investors looking for low-to-moderate cost buy-ins

Pros

• Multiple offerings available to non-accredited investors
• Simple menu of investment options
• Can use for IRA contributions
• Incredibly affordable buy-ins
• Low, easy-to-understand investor fee schedule

Cons

• Extended hold periods
• Limited secondary market

Investing in RELPs vs. REITs

Although both RELPs and REITs (Real Estate Investment Trusts) offer investors the chance to invest in real estate with limited liability and earn passive income, they have some significant differences. RELPs are not publicly traded and come with high buy-ins that typically limit participation to accredited investors. In contrast, numerous REITs allow non-accredited investors to buy in for less than $500 per share.

REITs are set up to acquire assets and earn revenue almost in perpetuity. Most REITs make their biggest payouts through monthly or quarterly distributions. RELPs are usually set up to add value to an undervalued asset and then liquidate it, which means the big payout from RELPs typically comes at the end of the partnership when the asset is sold.

Unlike REITs, RELPs are not public, which means shares can’t be sold on public exchanges, making RELP shares almost completely illiquid for both general and limited partners. The differences between RELPs and REITs and your investment goals will play a large role in determining which one is right for you. The good thing is that they both offer investors different ways to grow wealth through real estate.

Collaborative Ownership

RELPs allow investors to pool resources and enter the real estate market without sole ownership. Through RELPs, investors can acquire and manage properties for potential profits and passive income. However, investors must carefully assess partnership agreements and the expertise of general partners. Risks, such as illiquidity and market timing, exist and require due diligence.

RELPs differ from REITs in terms of value addition and eventual liquidation. The choice between RELPs and REITs depends on individual goals and circumstances. RELPs offer versatility in real estate investment, but thorough research and prudent decisions are necessary for success.

Frequently Asked Questions

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A triple net lease, often abbreviated as NNN lease, is a type of commercial real estate lease agreement where the tenant takes on significant responsibilities beyond just paying rent. In a triple net lease, the tenant is responsible for not only the base rent but also for the expenses associated with the property, including property taxes, insurance, and maintenance costs. This means that the tenant is required to cover these additional costs on top of the base rent, hence the term “triple net.”

When is a Triple Net Lease Used?

Triple net leases are most commonly associated with commercial properties and have the letters NNN prominently featured in the property listing or advertising materials. A list of properties you can expect to be available through triple net leases would include the following:

• Retail (strip centers, shopping malls, the commercial portion of mixed-use developments)
• Commercial (industrial parks, automotive repair, manufacturing)
• Office space
• Bars and restaurants

Why Use Triple Net Leases?

The use of triple net leases offers a number of very tangible benefits to property owners and commercial investors. As discussed in the opening section, the first and perhaps most tangible benefit of triple net leases is that they pass property-related expenses onto commercial tenants. This drastically increases the property owner’s net operating income (NOI). High NOI translates to higher revenue, higher return on investment and higher property value for owners.

Additionally, while most residential leases only last for 1 year, triple net leases can be signed for terms of 5, 10 or even 20 years with prearranged rent increases. In some states, the maximum length of residential leases is capped, but this is rarely the case with commercial buildings and triple net leases. The longer terms and the opportunity to phase in rent increases offer landlords a tremendous amount of stability.

All of these obvious pros are unique to commercial properties with triple net leases, which makes them extremely popular with individual investors and real estate investment trusts (REITs) alike. Aside from debt service, the cost of insurance, maintenance and property taxes are the 3 biggest expenses (and threats to NOI) for property owners. So, whenever they can mitigate those expenses through the use of a triple net lease, they have what is basically a win-win situation. This is why a long-term triple-net lease is a property owner’s dream lease structure.

Other Types of Commercial Leases

Although triple net leases are extremely popular with landlords for obvious reasons, they are not the only type of commercial leases available. Even though the triple net lease structure is strongly preferred by most landlords, several other types of lease arrangements are available. A partial list of these arrangements includes:

Gross Lease

The term gross lease is indicative of the fact that the rent paid to the landlord is gross revenue. Under a gross lease, the tenant pays a fixed rent amount to the landlord, who has factored the estimated cost of maintenance, taxes and insurance into the monthly rent. This means the tenant makes no additional payments to the landlord beyond the agreed-upon monthly rent, and it is up to the landlord to pay property expenses directly out of the rent received. Gross lease rates are typically higher than the base rent under triple net leases

Net Lease

Under a net lease, tenants pay a base rent and then a mutually agreed-upon proration of the additional expenses such as taxes, maintenance and insurance. However, net leases differ from triple net leases in several significant aspects.

First, the “net” amount the tenant pays toward landlord expenses is not based on the size of the property but on the arrangement between the tenant and landlord. Second, the “net” amount paid by the tenant may cover only some of the landlord’s expenses. For example, a net lease may only cover taxes or insurance or maintenance as a single line item. It may also just cover a percentage or portion of these expenses as opposed to the full amount.

Percentage Lease

Under a percentage lease, the tenant pays a base rent and an additional surcharge that is based on a percentage of the revenue generated by the space being rented. Base rents under percentage leases are usually lower, which allows commercial tenants a little bit more economic flexibility and cash flow to work with.

Is a Triple Net Lease Right for You?

The decision to enter into a triple net lease agreement should be made after a thorough evaluation of your financial goals, risk tolerance, and understanding of the local real estate market. Consulting with a real estate professional or financial advisor can help you determine if a triple net lease is the right choice for your investment portfolio or business strategy.

Frequently Asked Questions

The post What is a Triple Net Lease? by Eric McConnell appeared first on Benzinga. Visit Benzinga to get more great content like this.

A 1031 Exchange is a powerful tax-deferral strategy that allows real estate investors to sell an investment property and reinvest the proceeds into another like-kind property—without paying capital gains taxes at the time of sale. Named after Section 1031 of the Internal Revenue Code, this strategy helps investors grow wealth by deferring taxes and using the full value of their investment to acquire more or better real estate.

While the rules are strict and timelines tight, a properly executed 1031 Exchange can be a game-changer for building long-term real estate wealth.

How Does a 1031 Exchange Work?

Under U.S. tax law, property owners are allowed to defer the tax due on capital gains from the sale of a property if they use the profits to purchase a “like for like” property within 180 days of the original sale. If an owner does this, they have technically not profited from the sale, but rather “exchanged” one property for another.

In doing so, they are able to defer their tax exposure from the original sale because the seller didn’t really make any profit. They simply traded a property for another similar one. The key here is “like for like,” which means the properties must be similar to each other. This similarity does not lie in property price, but in property type.

Other restrictions apply as well. Primary residences are not eligible for 1031 exchanges. The IRS automatically allows single tax filers a $250,000 tax credit — and $500,00 for married couples — on profits realized from the sale of a primary residence. That’s why the only properties eligible for 1031 title exchanges are income properties, business properties, or investment properties.

If you own a small automotive garage and decide to purchase a larger one, you can use the profits from the sale of the smaller garage to purchase a bigger garage without incurring any tax exposure. You could also do a 1031 exchange after selling a 4-unit apartment building and using the money to buy a nicer building in a more desirable area. However, you could not sell your auto garage and use a 1031 title exchange to buy a luxury yacht or even a new primary residence for yourself.

The law is written the way it is to encourage business owners and investors to keep recycling their money in the market as opposed to just dumping it in a savings account.

You face no limit to the amount of 1031 exchanges you can do. As long as you conduct the exchange within the confines of the rules established by the tax code (and the time allotted for the exchange), you can roll profits over through 1031 exchanges indefinitely. That’s why savvy investors have been using 1031 title exchanges to grow their portfolios for decades.

Advantages of a 1031 Exchange

There are several key advantages to utilizing a 1031 exchange for investors, such as:

• Deferment of Capital Gains Taxes: One major benefit is the ability to defer the payment of capital gains taxes, which can result in substantial savings and increased cash flow for the investor. By reinvesting the full amount of the proceeds into a new property, the investor can defer taxes on both the initial investment and any appreciation in value, allowing for the continued growth of their real estate portfolio.
• Flexibility and Diversification: Additionally, a 1031 exchange provides investors with greater flexibility and potential for diversification. Instead of being limited by the tax implications of selling a property, investors can strategically reallocate their funds into different types of properties or markets to better align with their investment goals. This can help enhance the overall performance and stability of their real estate holdings.
• More Capital: A 1031 title exchange gives property owners more capital to buy another property. If you earn $500,000 in wages, you would be subject to the maximum federal tax rate of 37%, which would leave you with around $350,000 to make your new purchase. On the other hand, if you sold a property at a $500,000 profit, a 1031 title exchange would allow you to use some, or all, of your $500,000 profit to buy a similar property. That additional $150,000 gives you a lot of extra buying power.

Drawbacks of a 1031 Exchange

A properly executed 1031 title exchange is a great way to build wealth or upgrade like-for-like investment properties. However, it’s not as easy as 1-2-3. There are some drawbacks to this strategy.

• Prepayment Penalties: First of all, if you’re exchanging a commercial property that is being financed, you need to take a look at your loan documents. Most commercial real estate loans have significant prepayment penalties. If you’re trying to exchange your financed property to buy another, these prepayment penalties could eat up a significant chunk of your profits. This situation could very well leave you without enough money to do the exchange.
• Time Constraints: You have 45 days from the original sale to designate the property you’re buying to complete your exchange, and the entire exchange must be completed within 180 days. If your exchange doesn’t conform to these timelines, you’ll be fully responsible for the capital gains taxes due. That means you must be quick about finding an exchange partner.
• Need for a Middleman: One of the requirements of a 1031 title exchange is that the capital gains cannot be “realized” by the person doing the exchange. What that means in layman’s terms is that you can’t hold the money in your bank account, even while you’re waiting to close the new deal. Attorneys can hold the capital gains for you in a special escrow account, but of course, that costs money.

1031 Exchange Tips

1031 title exchanges are a great way to move up the real estate ladder, but they require careful planning. You can’t just put your property on the market and assume that you’ll find a suitable exchange property after it sells. Remember, you’ve only got 45 days (6 weeks) to designate the property you’re going to use to complete the exchange.

If you miss that deadline, the ballgame is over. That’s why it’s a good idea to have an exchange partner (or property) before you begin the process of making a 1031 title exchange. Otherwise, you could end up overbidding on properties you don’t like just to get in under the deadline.

You will also need professional assistance in filing your taxes. An accounting professional will need to review your exchange and complete the proper forms before you can fully benefit from the tax advantages of a 1031 exchange. What’s more, your accountant, the attorney holding your exchange money, and your real estate agent all need to be on the same page in order for your exchange to be successful. If you try to complete this process on your own, you could easily make a costly error.

Benzinga’s Best Real Estate Investment Platforms

Although 1031 exchanges are a great way to build wealth or upgrade properties, you have to manage a lot of moving parts. If it all sounds like Greek to you, maybe it’s best to take a look at this list of Benzinga’s best real estate investment platforms and find a more passive way to earn money in real estate.

Best For

Tax-Deferred Real Estate Investments

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Tax-Deferred Real Estate Investments

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1031 Crowdfunding is a premier real estate investment platform focused on 1031 exchanges and alternative investment vehicles specifically designed for tax deferral. With over 100 offerings at any given time, including Delaware Statutory Trusts (DSTs), the platform caters to investors seeking to defer capital gains taxes through real estate investments. The platform is powered by a highly experienced management team with a history of executing over $3.4 billion in real estate transactions and $2.1 billion in securities sales. Though industry-standard fees apply, 1031 Crowdfunding offers a unique combination of a large inventory, expert guidance, and proprietary tools to help investors tailor their portfolios to their needs.

Best For

• Investors seeking tax-deferred real estate investments
• Individuals involved in 1031 exchanges Investors interested in senior housing DSTs
• Experienced investors looking for a diverse selection of real estate offerings

Pros

• Extensive inventory of 1031 exchange-eligible properties
• Proprietary tools for portfolio customization
• Expert guidance from a seasoned management team
• High customer service ratings with personalized support

Cons

• Limited access for non-accredited investors 

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Investors Seeking a 1031 Exchange for Tax Deferral & Access DST Opportunities

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Investors Seeking a 1031 Exchange for Tax Deferral & Access DST Opportunities

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Real estate remains the most popular alternative investment market valued for its potential for portfolio diversification, reducing volatility and amplifying returns via tax advantages, income and capital appreciation. The asset class may perform well even in an inflationary or volatile economic environment because investment properties derive value from a rent-based multiple. As rent rises because of inflation, the overall property value may increase. The best part is there are multiple ways you can passively invest in real estate without the hassle of buying or managing properties, dealing with tenant-landlord laws or covering out of pocket ongoing upkeep expenses.

Besides real estate investment trusts (REITs) and crowdfunding platforms, another excellent option is the Delaware Statutory Trust (DST) 1031 Exchange — a legal entity created for holding title to investment real estate. As a form of passive real estate ownership, DSTs lets you diversify your portfolio by allowing investments into multiple properties instead of just one. The IRS considers well-structured DSTs as like-kind 1031 exchange-qualified replacement property, meaning you can use them to defer capital gains taxes. If you’re seeking DST properties or offerings for your 1031 Exchange, 1033 Exchange or direct cash investment, Kay Properties & Investments could be a fantastic platform to access these Delaware Statutory Trust investments.

This best-in-class 1031 Exchange platform specializes in DST investments from over 25 different DST sponsor companies. Kay Properties & Investments leverages its team of experts with a combined 200 years of experience to guide investors on the potential benefits and risks of DST investments, helping them decide if the available DST options in the market are ideal for their real estate investment and 1031 exchange needs. By providing investors access to the marketplace of DSTs across various asset classes (think multifamily apartments, industrial warehouses, medical facilities, self storage properties and long-term triple net leased DSTs), geographic locations (the platform has DST investments across the United States in many different cities and states, various leverage scenarios ranging from 0% debt free DST offerings to 30-85% loan to value DST offerings (1031 exchange investors need varying degrees of leverage to complete their 1031 exchanges with a full tax deferral) and lastly numerous DST sponsor companies (these are the asset managers that put together these Delaware Statutory Trust investments), the www.kpi1031.com marketplace platform enables tax-smart investing, tax deferral utilizing the 1031 exchange and DST combination and numerous options for investors from over 25 different DST sponsor companies. Read on for a comprehensive review of Kay Properties & Investments, including its core service offerings and pros and cons.

Best For

• Investors aiming to diversify their portfolios by spreading investments across various real estate properties and locations seeking suitable options through the platform’s diverse DST offerings
• Investors who value expertise and guidance in navigating the complexities of DST investments and who wish to benefit from Kay Properties & Investment’s team of professionals with a combined 200 years of experience
• Accredited 1031 exchange investors seeking to defer capital gains taxes by reinvesting in like-kind properties through DSTs and subsequently keeping their entire equity amount invested and producing income potential. Passive real estate investors or those looking for a hands-off approach to real estate ownership who could benefit from the passive nature of DST investments offered by Kay Properties & Investments
• Investors that are looking for advice and guidance regarding the 1031 exchange Delaware Statutory Trust industry as the Kay Properties team has helped thousands of investors nationwide complete these transaction.
• Tax-conscious investors or those prioritizing tax efficiency, given the platform’s focus on tax-smart investing and the potential tax benefits associated with DSTs, especially in the context of 1031 and 1033 exchanges

Pros

• Access to over 25 different DST sponsor companies
• Robust DST inventory – About 20 to 40 DST investment offerings available at any given time
• DST Expertise – Participated in excess of $30 billion in total DST 1031 offerings
• Overseen by experts with over 200 years of combined real estate investment experience
• Excellent and professional customer support and guidance from the Kay Properties team members
• Excellent educational resources to facilitate clients’ understanding of DST 1031 exchange investing
• Hassle-free registration and account setup
• Ownership has been investing in DSTs personally since 2008 with over 50 different DST investments from multiple DST sponsor companies. This hands on experience has benefitted the Kay Properties clientele immensely over the years.
• The Kay Properties marketplace has many DST offerings including leveraged DST offerings (typically 30-60% loan to value) as well as the industry’s largest selection of debt free DST offerings (debt free DST offerings are ideal for investors that do not want the risk of losing their entire investment principal to a lender foreclosure)

Cons

• Available only for accredited investors 
• Involves buy-and-hold long-term strategy – DST offerings typically are held for 3-5 years but could go for even longer
• Investors have limited control over the investment 
• No guarantees –  All real estate and Delaware Statutory Trust properties contain no guarantees for income or appreciation

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Index Like Real Estate Funds

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Index Like Real Estate Funds

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Cityfunds are the first ever index-like fund for a single city’s residential real estate market. By investing in fractions of homeowner equity in top cities, Cityfunds has made it possible for everyone to own real estate in high-demand markets like Austin, Dallas, Miami, and Tampa.

Best For

Pros

• Allows for investing alongside homeowners
• Discounts of 10-15% to market value
• Buy and share trades right from the app
• High projected growth rate

Cons

• Only available to U.S. residents
• May not be the right investment for those seeking monthly passive income through rental returns

Best For

Beginner Real Estate Investors

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Beginner Real Estate Investors

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Fundrise is an online real estate investment platform that allows individuals to invest in a diversified portfolio of commercial real estate properties. The platform pools investor funds and uses them to acquire, manage, and sell various types of real estate assets, such as apartment buildings, office spaces, and retail centers.

One of the key advantages of Fundrise is its accessibility to individual investors who may not have the capital or expertise to invest directly in real estate. By pooling funds together with other investors, Fundrise allows individuals to access a diversified portfolio of real estate assets without having to purchase properties on their own.

Fundrise also offers transparency to its investors. The platform provides regular updates on the performance of the portfolio, allowing investors to track their investments in real time. Additionally, Fundrise offers a user-friendly interface that makes it easy for individuals to invest and manage their portfolios online.

Best For

• New real estate investors looking to get their feet wet
• Non-accredited investors
• Real estate investors who want a “set-it and forget it”-oriented option
• Investors looking for low-to-moderate cost buy-ins

Pros

• Multiple offerings available to non-accredited investors
• Simple menu of investment options
• Can use for IRA contributions
• Incredibly affordable buy-ins
• Low, easy-to-understand investor fee schedule

Cons

• Extended hold periods
• Limited secondary market

Is a 1031 Exchange Right for You?

Every real estate investor is different, and money-making in real estate comes in many flavors. The effective use of 1031 exchanges is a well-established method of improving a portfolio and upgrading properties while minimizing tax exposure. However, risks accompany this approach, just as with other investments.

If you plan properly and avail yourself of the assistance of savvy real estate professionals, the 1031 exchange can be an invaluable tool. But you need to understand the risks before proceeding. If you’d like to learn more about 1031 exchanges or real estate investing in general, Benzinga is the right resource for you.

Frequently Asked Questions

The post What is a 1031 Exchange? by Eric McConnell appeared first on Benzinga. Visit Benzinga to get more great content like this.

Investing $1,000 in real estate might sound challenging, given the large sums typically associated with property ownership. However, today’s investment landscape offers a variety of entry points that make real estate accessible to almost anyone, even those with a modest starting amount.

With just $1,000, you can explore options like REITs, crowdfunding, and fractional real estate investing. Each approach provides exposure to the real estate market, allowing you to potentially grow your wealth without the complexities of property management.

This guide will walk you through some of the best ways to make the most of your $1,000 in real estate.

13 Ways to Invest $1,000 in Real Estate

This is the rub, isn’t it? You can’t buy much property (if any) anywhere for $1,000 unless your favorite uncle quits claiming a house to you for peanuts. But again, it’s a brave new world and there are now lots of ways to invest in real estate without actually buying property. Let’s take a look at some of those ways here.

1. Real Estate Investment Trusts (REITs)

REITs are managed funds that buy, sell, manage, and trade real estate all over the country. REITs have diverse property portfolios, and their diversity is their strength. Better still, REITs are managed by experienced professionals, which means you don’t have to deal with tenants, toilets, and complaints like you would if you were managing income property yourself.

2. Real Estate Crowdfunding

Real estate crowdfunding is a new real estate investing trend that uses the business model established by sites like GoFundMe to buy real estate. The neat thing about crowdfunding is that it’s opened up real estate investing to an entirely new class of investors who may have been frozen out by the cost in years past. Many crowdfunding sites also offer you a level of investor control by allowing you to pick and choose which properties you invest in.

3. Fractional Ownership

Fractional ownership offers a unique opportunity for individuals looking to invest in real estate with a limited budget. This concept allows multiple investors to collectively own a share of a property, enabling them to reap the benefits of real estate investing without the substantial financial commitment required to purchase a property outright.

By pooling resources with other investors, individuals can gain access to higher-value properties that may offer better returns compared to traditional investment options.

4. Rental Arbitrage

Rental arbitrage is a popular real estate investment strategy that involves leasing a property from a landlord and then re-renting it out to tenants at a higher rate, thereby profiting from the price difference. This method is particularly appealing to investors with limited capital, as it requires low upfront investment costs compared to traditional real estate investments.

By investing $1,000 in rental arbitrage, individuals can potentially generate a steady stream of passive income without the need to purchase a property outright.

5. Turnkey Rental Real Estate

Investing in turnkey rental real estate can be a great way to start building wealth with as little as $1,000. Turnkey properties are fully renovated and managed by a professional property management company, making them a hassle-free option for investors looking to generate passive income.

With a low initial investment, individuals can purchase a share of a turnkey rental property and start earning rental income without the need for hands-on involvement in property management.

6. Partnerships

Partnering with friends and family enables you to pool your funds until you have enough money to put a down payment on an investment property.

7. Wholesaling

Wholesaling is when you can find a property below the market, put in a bid for it, and get it under contract. Then you can assign the purchase contract to an investor at a profit. You may only need $1,000 in earnest money to enter into a contract on a property for sale and then flip the contract to someone else. Keep your eyes peeled for these opportunities.

8. Renting your Old House

You can rent out your old house that’s just sitting around generating a tax bill for you. Take $1,000 to spiff it up and make it rent-ready. Then you can put it on the market and begin earning some residual monthly income. Even if the renovations run slightly more than $1,000, it makes no sense to have a perfectly usable property that you’re not making money off. Otherwise, you’re paying taxes and insurance to maintain it, which makes it a money pit.

9. House Hacking

Are you using the basement in your home? Have you got a garage or a bedroom you’re not using? Why not add some appliances to the basement and rent it out? You could do long-term leasing or a short-term contract with Airbnb (NASDAQ: ABNB), which works especially well if you live in an area that has an active tourist season.

You could also slap a fresh coat of paint on the door of that garage you’re not using and rent it to someone. There is almost certainly someone in your neighborhood who needs extra parking or storage space and would be happy to pay for it.

10. Private Notes

Private notes are a valuable investment opportunity for individuals looking to invest $1,000 in real estate. They are essentially loans made to real estate developers or investors in exchange for a fixed interest rate. By investing in private notes, individuals can earn passive income by receiving regular interest payments throughout the term of the loan.

Private notes offer a lower barrier to entry compared to traditional real estate investing, making it an attractive option for those with limited capital. Investing in private notes for real estate can be a lucrative and relatively low-risk way to grow your wealth and generate passive income.

11. Hard Money Loans

Hard money loans provide a viable option for individuals looking to invest $1,000 in real estate. These loans are typically short-term, asset-based loans that are secured by the property being purchased. Unlike traditional mortgages, hard money loans are funded by private investors or companies and are often quicker to obtain, making them ideal for those seeking fast investment opportunities.

Investing $1,000 in real estate through hard money loans allows investors to leverage their capital and potentially generate higher returns. By securing a property with the loan, investors can use their $1,000 as a down payment and borrow the rest of the purchase price. This strategy enables investors to diversify their portfolios and participate in real estate investments with a relatively small initial investment.

12. Tax Liens

Tax liens are a unique and potentially lucrative investment opportunity for individuals looking to enter the real estate market with a modest sum of $1,000. When a property owner fails to pay their property taxes, the government places a lien on the property. Investors can then purchase these liens at tax auctions, typically for the amount of unpaid taxes plus any fees or interests accrued.

Investing $1,000 in tax liens allows individuals to potentially earn a high rate of return, often ranging from 8% to 36% or more annually. While there is a risk involved, as there is no guarantee that the property owner will redeem the lien, the potential rewards can outweigh the risks. Investors can choose to either earn interest on the lien or acquire the property if the owner does not redeem it within a specified period.

13. Peer-to-Peer Microloans

This innovative form of lending connects individual investors with borrowers seeking small loans, often at more favorable terms than traditional financial institutions. By funding real estate projects through peer-to-peer microloans, investors can take part in the lucrative real estate market without the burdensome requirements typically associated with traditional real estate investment.

Investing $1,000 in real estate through peer-to-peer microloans can provide investors with exposure to different types of real estate projects, ranging from residential to commercial properties. This diversity helps spread risk and can generate attractive returns, making it an appealing option for those looking to grow their investment portfolio.

Why Invest in Real Estate?

The simple answer to this question is, “You should invest in real estate because it works.” Historically, real estate investments have offered steady growth with a lot less volatility than other types of investments, such as stocks or bonds. In fact, just the simple act of purchasing a family home has proven to be one of the best investments you can make in America.

The miracle of appreciation means that almost any property you buy will be worth considerably more by the time the mortgage is paid off. This increase in value is usually slow and steady, but can also be explosive for investors who buy properties in emerging markets before they take a huge upswing in value. The other advantage of this slow and steady growth is that it requires relatively little from the property owner outside of routine maintenance and on-time debt service.

Every day, you hear stories of companies going belly up or stocks taking major dives on some horrible day of trading that becomes forever remembered as Black Monday or something like that. By contrast, you rarely hear about homeowners and landlords just going belly-up overnight.

Even when real estate investments lose value, they almost always bounce back. That’s why real estate investing has such a strong track record of building wealth with minimal risk. That’s also why you should consider investing in real estate — even if you only have $1,000 to spend.

Compare Real Estate Investing Platforms

If you’ve got $1,000 that you want to invest in real estate but you’re simply not sure how to do it, there is a place you can go for investment ideas. Benzinga is a great resource for would-be investors.

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Diverse Range of Alternative Investments

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Diverse Range of Alternative Investments

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Yieldstreet is an alternative investment platform that provides access to asset classes typically reserved for institutional investors. Founded in 2015, it offers opportunities in real estate, art, marine finance, legal finance, and more. By focusing on income-generating investments with varying risk levels, Yieldstreet aims to help individual investors diversify their portfolios and potentially achieve higher returns. This review explores Yieldstreet’s offerings, fees, returns, and overall suitability for different types of investors.

Best For

• Accredited investors looking to diversify
• Alternative investments to stocks and bonds
• Investors looking for passive income

Pros

• Easy-to-use platform
• Carefully selected offerings
• Excellent mobile app
• Full spectrum of alternative offerings
• Options for non-accredited investors

Cons

• Majority of investments only open to accredited investors

Best For

$100 Minimum Investment

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$100 Minimum Investment

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Arrived is a real estate investment platform that allows individuals to invest in rental properties with low capital. Founded in 2019 and backed by notable investors, Arrived enables fractional ownership of single-family rental homes, making real estate investing more accessible. With a fully managed approach, investors earn passive income without the responsibilities of property management. This review explores Arrived’s investment process, returns, fees, and overall suitability for different types of investors.

Best For

• Small- to medium-sized investors
• Investors interested in rental income
• Investors looking to diversify

Pros

• Buy-ins as low as $100
• Open to non-accredited investors
• Offers ownership shares in real property (and all the tax benefits)
• Multiple ways to earn dividends (rental income and property appreciation)
• Great way to diversify portfolio
• Open to self-directed individual retirement accounts (IRAs)
• Detailed analytics and data to help investors make informed decisions and maximize their returns

Cons

• Long hold periods
• No secondary market to liquidate shares

Best For

Low Fees and $100 Minimum Investment

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Low Fees and $100 Minimum Investment

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Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investments. As of February 2025, more than 260,000 investors had invested over $1.63 billion in Groundfloor.

Groundfloor updated its experience in October 2024 to offer more fractionalization and automation to offer a set-it-and-forget-in approach for all investors. Individuals with small portfolios will also like the low $100 minimum, automatic diversification and nominal investor fees. Most loans are lent to real estate entrepreneurs looking to flip homes or build new ones on vacant land. While there is a risk of borrowers defaulting on their loans, Groundfloor puts itself into a first lien position to mitigate as much risk as possible. Even if a borrower defaults on a Groundfloor loan, it doesn’t necessarily mean you lose your investment. More often than not, you still get a return, albeit not as high as the original estimate. The average return rate for defaulted loans from Groundfloor is 6%, which is still higher than money markets.

Best For

• Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
• Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
• Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.

Pros

• Charges the lowest minimums in the industry ($100)
• 10% historical annualized returns
• Open to non-accredited investors
• Mobile app that allows automatic investing and diversification
• Offers shares in its own notes as well as shares in convertible debt notes

Cons

• Offers no bankruptcy protection
• High rate of an uncured default

Best For

Beginner Real Estate Investors

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Beginner Real Estate Investors

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Fundrise is an online real estate investment platform that allows individuals to invest in a diversified portfolio of commercial real estate properties. The platform pools investor funds and uses them to acquire, manage, and sell various types of real estate assets, such as apartment buildings, office spaces, and retail centers.

One of the key advantages of Fundrise is its accessibility to individual investors who may not have the capital or expertise to invest directly in real estate. By pooling funds together with other investors, Fundrise allows individuals to access a diversified portfolio of real estate assets without having to purchase properties on their own.

Fundrise also offers transparency to its investors. The platform provides regular updates on the performance of the portfolio, allowing investors to track their investments in real time. Additionally, Fundrise offers a user-friendly interface that makes it easy for individuals to invest and manage their portfolios online.

Best For

• New real estate investors looking to get their feet wet
• Non-accredited investors
• Real estate investors who want a “set-it and forget it”-oriented option
• Investors looking for low-to-moderate cost buy-ins

Pros

• Multiple offerings available to non-accredited investors
• Simple menu of investment options
• Can use for IRA contributions
• Incredibly affordable buy-ins
• Low, easy-to-understand investor fee schedule

Cons

• Extended hold periods
• Limited secondary market

Tips for Earning Passive Income in Real Estate With $1,000

While you won’t double your money in a couple of years through passive real estate investments, it is an opportunity to build stable, long-term wealth. Here’s what you need to know:

• Focus on High-Yield Strategies: Look for real estate opportunities that offer higher yields, such as rental properties in areas with strong rental demand. Research potential rental income and expenses carefully to ensure the investment generates positive cash flow. Networking with local real estate agents and other professionals can help understand micro-markets and locate discounted properties or off-market opportunities. For REITs or crowdfunding, look at the managers’ or trust’s historical performance to locate opportunities with strong historical returns and high dividends to create positive cash flow.
• Prioritize Low Fees: Be mindful of any fees associated with your chosen investment platform or strategy. High fees can eat into your returns, particularly when you’re working with a smaller investment amount.
• Diversify While your initial investment is small, consider diversifying your investments over time as you accumulate more funds. Diversification helps spread risk and can provide a more stable income stream. Likewise, diversify across asset classes, real estate types, and investment opportunities.
• Long-Term Perspective: Real estate is often a long-term investment, and your $1,000 investment may not generate substantial income immediately. Be patient and focus on building your investment portfolio over time. Generally, real estate investors look for at least 5% to 10% in annual returns, but that can be lower when a property appreciates with a buy-and-hold strategy. Try to keep saving and building your diversified investment portfolio.
• Monitor and Reinvest: Regularly monitor your investments, and as your passive income grows, consider reinvesting your earnings to increase your ownership and potential income stream. Consider keeping the $1,000 in a high-yield savings account and continuing to save until you have enough for a downpayment on a rental property or other real estate investment opportunity.

Mistakes to Avoid when Investing in Passive Income Real Estate

Investing in passive income real estate can be an excellent way to build wealth and generate a steady stream of income. However, like any investment, there are certain mistakes that you need to avoid in order to ensure success and maximize returns. Here are a few common mistakes to steer clear of when investing in passive income real estate.

• Failing to Conduct Thorough Research: Failing to conduct thorough research is a common mistake that many investors make. It is crucial to thoroughly research the location, market conditions, and potential rental income of a property before making a purchase. This includes analyzing factors such as vacancy rates, rental demand, economic growth, and neighborhood amenities. Without this essential groundwork, investors run the risk of investing in properties that do not generate the anticipated returns.
• Underestimating the Costs Involved: Another mistake to avoid is underestimating the costs involved in maintaining and managing the property. Investors often focus solely on the potential rental income and fail to account for expenses such as property taxes, insurance, repairs, and property management fees. It is important to create a comprehensive budget that takes into consideration all potential costs to have a clear understanding of the true return on investment.
• Having Unrealistic Expectations: A common mistake is having unrealistic expectations about the time it takes to generate significant income. While passive income real estate can be a lucrative investment, it is important to have a realistic timeline for return on investment. It may take time to find the right property, secure tenants, and start generating substantial income. Patience and a long-term mindset are key when it comes to investing in passive income real estate.

The Bottom Line on How to Invest in Real Estate with $1,000

Contrary to popular belief, you don’t have to be rich to invest in real estate. If you’ve got $1,000 to invest, but you don’t like the unpredictability of the stock market, there are a number of ways you can put that money into real estate.

The rise of REITs and real estate crowdfunding has made it possible for you to become a real estate investor without being a real estate owner yourself. All you have to do is expand your thinking and open yourself up to the possibilities.

Frequently Asked Questions

The post How to Invest $1,000 in Real Estate by Eric McConnell appeared first on Benzinga. Visit Benzinga to get more great content like this.

DiversyFund and Groundfloor are two popular real estate investment platforms, each catering to different investor needs and preferences. While DiversyFund focuses on long-term growth through multifamily real estate investments via a managed REIT, Groundfloor offers short-term opportunities by funding real estate loans for flippers and developers.

Both platforms are accessible to non-accredited investors and provide unique ways to diversify your portfolio. Understanding their differences in focus, risk, liquidity, and returns can help you determine which platform aligns best with your financial goals.

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What is DiversyFund?

DiversyFund Inc. is a private REIT that has been set up to allow investors to buy shares for as little as $500. In addition to the low buy-in, DiversyFund doesn’t have a minimum net worth requirement for its clients, which many REITs do. This allows small investors to participate in the real estate market in such a way that has historically only been available to high net worth individuals. 

DiversyFund still buys and sells real estate like a traditional REIT, but with an added focus on being user-friendly for small investors. In addition to the low buy-in, DiversyFund offers a number of user-friendly additional benefits, including:

• Webinars where investors can learn about REITs and how DiversyFund works
• Huge FAQ page that answers many questions potential investors may have
• Transparency — DiversyFund is publicly traded and subject to federal and state regulations regarding investment vehicles 

In addition, DiversyFund actually is easy to contact through email and encourages its investors (or potential investors) to reach out with questions. This is a marked departure from many investment firms, where the person you want to talk to or ask questions is usually unavailable.

While DiversyFund used to offer monthly dividends, the company no longer does. Instead, shareholders cannot sell their shares until DiversyFund closes the fund and begins selling the assets. The firm aims to allow investors to begin selling their shares in five years.

What is Groundfloor?

Groundfloor is a unique real estate investing option that is built on crowdfunding and offers a higher level of investor control. Unlike a REIT, where you invest in a particular property portfolio that’s been pre-selected by a fund manager, Groundfloor operates as a lender for a wide range of real estate investments around the country and provides the capital for that lending through investor funding. Then, Groundfloor allows individual investors like you to pick and choose which property (or properties) you want to invest in. 

Groundfloor offers a menu of options for investors to choose from and a buy-in as low as $100. Each individual investment opportunity on Groundfloor features its own profile and an individual prospectus with its own interest rate, loan term, and loan to after-repaired-value (ARV) ratio. This puts the power completely in your hands. This makes Groundfloor a great source of funding for home flippers or people who like to recondition distressed assets for profit. 

Additionally, Groundfloor offers individual retirement accounts (IRA) to investors and even offers opportunities to become brokers.

DiversyFund vs. Groundfloor

Here’s a side-by-side comparison of DiversyFund and Groundfloor to help you evaluate which platform fits your investment goals:

1. Investment Focus

• DiversyFund: Focuses exclusively on multifamily real estate. Investors contribute to a managed real estate investment trust (REIT) that acquires, renovates, and holds properties for long-term growth.
• Groundfloor: Specializes in short-term loans to real estate flippers and developers. You invest in individual loans, earning interest when borrowers repay.

2. Minimum Investment

• DiversyFund: $500 minimum investment.
• Groundfloor: As low as $10 per loan, offering much more flexibility for small-scale investors.

3. Investment Duration

• DiversyFund: Long-term (5+ years), as funds are locked until the properties are sold.
• Groundfloor: Short-term (6–12 months), depending on the loan term.

4. Payouts

• DiversyFund: No immediate payouts; profits come from property sales and appreciation at the end of the investment term.
• Groundfloor: Regular interest payments once loans are repaid, providing quicker returns.

5. Liquidity

• DiversyFund: Highly illiquid, with no option for early withdrawal.
• Groundfloor: More liquidity since loans have shorter durations, but there’s no secondary market for selling loans.

6. Fees

• DiversyFund: No management fees; profits are reinvested into properties during the growth phase.
• Groundfloor: Borrowers, not investors, pay platform fees.

7. Risk

• DiversyFund: Risk is tied to the overall performance of the REIT and real estate market trends.
• Groundfloor: Risk is tied to the borrower’s ability to repay loans, though the loans are secured by real estate as collateral.

8. Accreditation Requirements

• DiversyFund: Open to both accredited and non-accredited investors.
• Groundfloor: Also open to all investors, making it highly accessible.

9. Transparency

• DiversyFund: Investments are pooled, so you don’t pick individual properties.
• Groundfloor: High transparency, as you can select individual loans to fund and see detailed project information.

10. Who It’s Best For

• DiversyFund: Ideal for long-term investors seeking passive, hands-off exposure to multifamily real estate.
• Groundfloor: Great for those who want more control over their investments, prefer shorter-term commitments, or have smaller amounts to invest.

Compare Real Estate Investments Platforms

DiversyFund and Groundfloor are just two of many real estate investment options available for investors. If you want to know more about the best real estate investment platforms to invest in, check out our partners below.

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Accredited Investors

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Accredited Investors

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One of the key benefits of investing in commercial real estate is the potential for attractive returns. This asset class often provides steady cash flow through dividends, adding diversity to your investment portfolio with tangible assets. By diversifying into commercial real estate, investors can access a market that is the third-largest after equities and bonds.

Making the transition from single-family real estate to commercial properties may seem daunting at first. Investing in commercial real estate through platforms like CrowdStreet can provide investors with access to a wide range of opportunities across different property types and markets.

CrowdStreet offers a platform where investors can browse and select specific commercial real estate projects to invest in, allowing for greater control over their investment decisions.

Best For

• Accredited investors
• Long-term investors
• Investors looking to diversify from stocks

Pros

• User-friendly interface
• Diverse investment offerings
• Great investor resources
• Proven performance history
• Many offerings eligible for inclusion in self-directed IRA

Cons

• Accredited investors only
• Most offerings require a $25,000 minimum investment

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$100 Minimum Investment

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$100 Minimum Investment

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Arrived is a real estate investment platform that allows individuals to invest in rental properties with low capital. Founded in 2019 and backed by notable investors, Arrived enables fractional ownership of single-family rental homes, making real estate investing more accessible. With a fully managed approach, investors earn passive income without the responsibilities of property management. This review explores Arrived’s investment process, returns, fees, and overall suitability for different types of investors.

Best For

• Small- to medium-sized investors
• Investors interested in rental income
• Investors looking to diversify

Pros

• Buy-ins as low as $100
• Open to non-accredited investors
• Offers ownership shares in real property (and all the tax benefits)
• Multiple ways to earn dividends (rental income and property appreciation)
• Great way to diversify portfolio
• Open to self-directed individual retirement accounts (IRAs)
• Detailed analytics and data to help investors make informed decisions and maximize their returns

Cons

• Long hold periods
• No secondary market to liquidate shares

Best For

Low Fees and $100 Minimum Investment

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Low Fees and $100 Minimum Investment

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Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investments. As of February 2025, more than 260,000 investors had invested over $1.63 billion in Groundfloor.

Groundfloor updated its experience in October 2024 to offer more fractionalization and automation to offer a set-it-and-forget-in approach for all investors. Individuals with small portfolios will also like the low $100 minimum, automatic diversification and nominal investor fees. Most loans are lent to real estate entrepreneurs looking to flip homes or build new ones on vacant land. While there is a risk of borrowers defaulting on their loans, Groundfloor puts itself into a first lien position to mitigate as much risk as possible. Even if a borrower defaults on a Groundfloor loan, it doesn’t necessarily mean you lose your investment. More often than not, you still get a return, albeit not as high as the original estimate. The average return rate for defaulted loans from Groundfloor is 6%, which is still higher than money markets.

Best For

• Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
• Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
• Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.

Pros

• Charges the lowest minimums in the industry ($100)
• 10% historical annualized returns
• Open to non-accredited investors
• Mobile app that allows automatic investing and diversification
• Offers shares in its own notes as well as shares in convertible debt notes

Cons

• Offers no bankruptcy protection
• High rate of an uncured default

Best For

Diverse Range of Alternative Investments

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Diverse Range of Alternative Investments

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Yieldstreet is an alternative investment platform that provides access to asset classes typically reserved for institutional investors. Founded in 2015, it offers opportunities in real estate, art, marine finance, legal finance, and more. By focusing on income-generating investments with varying risk levels, Yieldstreet aims to help individual investors diversify their portfolios and potentially achieve higher returns. This review explores Yieldstreet’s offerings, fees, returns, and overall suitability for different types of investors.

Best For

• Accredited investors looking to diversify
• Alternative investments to stocks and bonds
• Investors looking for passive income

Pros

• Easy-to-use platform
• Carefully selected offerings
• Excellent mobile app
• Full spectrum of alternative offerings
• Options for non-accredited investors

Cons

• Majority of investments only open to accredited investors

Which Real Estate Investing Platform is Right for you?

As with all investments, beauty lies in the eye of the beholder. If you’re someone who likes to dig into the details of what you’re investing in, or have a higher level of control over where your money goes, Groundfloor may be the best option. On the other hand, if you prefer to leave the investment decisions to a seasoned fund manager, DiversyFund or another REIT might be the way to go. But perhaps the best part about DiversyFund and Groundfloor is that the buy-ins are so low, you can invest in both.

Frequently Asked Questions

The post DiversyFund vs. Groundfloor by Eric McConnell appeared first on Benzinga. Visit Benzinga to get more great content like this.

Traditional investments like stocks and bonds have long been the foundation of most portfolios. Still, in today’s volatile market, investors increasingly turn to alternative investments to enhance returns and reduce risk. Alternative investments include real estate, private equity, hedge funds, commodities, cryptocurrencies, and collectibles, offering opportunities beyond traditional asset classes.

Diversifying into alternative investments can provide higher potential returns, inflation protection, and portfolio stability, as these assets often have a low correlation with stock market fluctuations. However, they also come with unique risks, such as lower liquidity, higher fees, and complex valuation processes.

This guide explores the strategies for incorporating alternative investments into your portfolio to achieve long-term financial growth and resilience.

What is an Alternative Investment?

Investments are broken down into two separate categories. The first category is known as traditional investments. Historically, stocks, bonds, and cash are considered traditional investments. An alternative investment is considered anything besides that. Examples of alternative investments would include:

• Real estate
• Precious metals
• Cryptocurrency
• Collectibles
• Venture capital
• Private equity
• Hedge funds
• Commodities
• Wine
• Non-fungible tokens (NFTs)

>> Learn more about the types of alternative investments

Why Should You Have Alternative Investments?

Alternative investments offer unique advantages that can enhance your portfolio’s performance and resilience. Here’s why you should consider them:

1. Diversification and Risk Reduction: Alternative assets have a low correlation with traditional stocks and bonds, helping to stabilize your portfolio during market downturns.
2. Higher Return Potential: Many alternative investments, such as private equity and real estate, have the potential for higher long-term returns compared to traditional investments.
3. Inflation Protection: Assets like real estate, commodities, and gold tend to retain or increase in value during inflationary periods, preserving your purchasing power.
4. Income Generation: Real estate, private credit, and certain hedge fund strategies can provide consistent passive income streams.
5. Wealth Preservation: Hard assets like gold, fine art, and farmland maintain intrinsic value over time, making them a hedge against economic instability.

How Much of Your Portfolio Should You Diversify Into Alternative Investments?

This is a question that doesn’t have a single, set answer. If you’re talking about alternative investments to diversify your traditional investment portfolio, most investment advisors recommend that no more than 15% to 30% of your portfolio be devoted to alternative investments. This practice will leave enough alternative assets in your portfolio to profit off them while not over-exposing you to a downturn in your chosen alternative investments.

Some people have built entire portfolios of alternative assets. If you have professional experience or specific knowledge of an alternative investing field, you may take an inverse approach and concentrate 70% to 85% of your portfolio on your preferred alternative investments. Then, you would diversify the other 15% to 30% in traditional investments.

Which Alternative Investment is Right for You?

Picking which alternative investment is right for you is a personal choice. The alternative investments you feel most comfortable with will vary based on your risk tolerance, investment goals, and the amount of capital you have to invest. The good news is that you can access a wide variety of alternative offerings and new ways to participate in them.

Where Can You Find Alternative Investments?

If you’re considering real estate, you can start by looking for opportunities in your area. However, if you live in an overheated real estate market with high prices, it may be too expensive to purchase. In this case, online real estate crowdfunding platforms like CrowdStreet and Arrived, where you can buy equity in real estate investments at affordable prices, may work.

If the idea of venture capital or buying into startups excites you, you can use platforms like StartEngine, WeFunder, and Seed Invest. You can browse these platforms and find thousands of new startups in a variety of fields to invest in.

In the case of real estate and venture capital/startup funding, if you don’t feel comfortable picking investments yourself, you don’t have to. The alternative investing world features numerous real estate investment trusts (REITs) and even venture capital funds you can buy into. In those offerings, you invest the capital and the fund manager grows your wealth.

Invest With Our Partnering Alternative Investment Platforms

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$100 Minimum Investment

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$100 Minimum Investment

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Arrived is a real estate investment platform that allows individuals to invest in rental properties with low capital. Founded in 2019 and backed by notable investors, Arrived enables fractional ownership of single-family rental homes, making real estate investing more accessible. With a fully managed approach, investors earn passive income without the responsibilities of property management. This review explores Arrived’s investment process, returns, fees, and overall suitability for different types of investors.

Best For

• Small- to medium-sized investors
• Investors interested in rental income
• Investors looking to diversify

Pros

• Buy-ins as low as $100
• Open to non-accredited investors
• Offers ownership shares in real property (and all the tax benefits)
• Multiple ways to earn dividends (rental income and property appreciation)
• Great way to diversify portfolio
• Open to self-directed individual retirement accounts (IRAs)
• Detailed analytics and data to help investors make informed decisions and maximize their returns

Cons

• Long hold periods
• No secondary market to liquidate shares

Best For

Gold IRAs with On Going Promotions

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Gold IRAs with On Going Promotions

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American Hartford Gold is a family-owned business based in Los Angeles, California. The organization is a market leader in precious metal investing. American Hartford Gold specializes in selling gold, silver, platinum, and palladium coins and bars and in helping its clients to set up Individual Retirement Accounts (IRAs) invested in precious metals.

Precious metals are popular investments during times of high inflation as investors look for a hedge against inflation. Gold and silver investments may not follow the same trends as stocks, making precious metal investing a potential safe haven.

American Hartford Gold offers investors the following services:

• Gold, platinum, palladium and silver investments
• Gold IRAs

Investors need an amount of $10,000 or more to start their retirement investment journey with American Hartford Gold. The company also assists investors looking to roll their current IRAs into gold IRAs. There are no taxes or penalties on either the trustee-to-trustee or 60-day rollover IRA options it offers. American Hartford Gold will buy back the precious metals when investors want to cash out.

Best For

• Investors looking for a hedge against inflation
• Retirement savers looking for tax benefits

Pros

• Quick & easy 3-step tax-free, penalty-free Gold IRA setup
• Same day IRA – fastest in the industry
• Ranked #1 Gold Company on the Inc 5000 List and A+ Rated on BBB
• Up to $15,000 in FREE silver on qualified accounts
• Lowest price guarantee, best ongoing promotions, no buy-back fees
• Wide range of investment-grade gold and silver products, including popular coins like American Gold Eagles and Canadian Silver Maple Leafs
• The company provides a wealth of information on investing in precious metals, including guides on the benefits of gold and silver investments

Cons

• Online catalog doesn’t show pricing
• No international shipping available outside of the U.S.

Best For

Beginner Real Estate Investors

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Disclosure: This is a testimonial in partnership with Fundrise. We earn a commission from partner links on Benzinga.com. All opinions are our own.

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Beginner Real Estate Investors

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Fundrise is an online real estate investment platform that allows individuals to invest in a diversified portfolio of commercial real estate properties. The platform pools investor funds and uses them to acquire, manage, and sell various types of real estate assets, such as apartment buildings, office spaces, and retail centers.

One of the key advantages of Fundrise is its accessibility to individual investors who may not have the capital or expertise to invest directly in real estate. By pooling funds together with other investors, Fundrise allows individuals to access a diversified portfolio of real estate assets without having to purchase properties on their own.

Fundrise also offers transparency to its investors. The platform provides regular updates on the performance of the portfolio, allowing investors to track their investments in real time. Additionally, Fundrise offers a user-friendly interface that makes it easy for individuals to invest and manage their portfolios online.

Best For

• New real estate investors looking to get their feet wet
• Non-accredited investors
• Real estate investors who want a “set-it and forget it”-oriented option
• Investors looking for low-to-moderate cost buy-ins

Pros

• Multiple offerings available to non-accredited investors
• Simple menu of investment options
• Can use for IRA contributions
• Incredibly affordable buy-ins
• Low, easy-to-understand investor fee schedule

Cons

• Extended hold periods
• Limited secondary market

Best For

Art Investing

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Art Investing

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Masterworks provides an opportunity for investors to invest in blue-chip artworks by renowned artists, such as Basquiat, Warhol, and Koons, without having to buy the entire artwork themselves. Instead, investors can purchase shares in a specific artwork, allowing them to own a fractional interest in that piece.

By investing in art through Masterworks, individuals can access an asset class that has historically demonstrated strong long-term returns and low correlation to traditional financial markets. This can help investors spread their risk and potentially achieve higher returns over time. Moreover, Masterworks leverages its expertise in the art market to carefully select and acquire artworks that have the potential for significant value appreciation, offering investors the chance to profit from the art market without the hassle of managing an art collection.

In this article, we review Masterworks’ offerings, usability, customer support, returns, fees and educational support to help you decide whether you should use this art investing platform.

Best For

• You want to diversify your portfolio with alternative investments
• Those interested in investing in art

Pros

• A dedicated representative from RIA-affiliate Masterworks Advisers available upon request who will determine if art investing is a fit for you, help you invest, and answer questions
• Clean, attractive, easy to use platform design for desktop and mobile
• Track record: 9 – 39% net annualized returns
• Masterworks manages the entire process of sourcing, purchasing, and storing artwork

Cons

• Requires a phone call before you can invest
• Hedge fund like fees can be confusing for new investors
• Offerings sell out quickly due to demand

Best For

Diverse Range of Alternative Investments

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Diverse Range of Alternative Investments

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Yieldstreet is an alternative investment platform that provides access to asset classes typically reserved for institutional investors. Founded in 2015, it offers opportunities in real estate, art, marine finance, legal finance, and more. By focusing on income-generating investments with varying risk levels, Yieldstreet aims to help individual investors diversify their portfolios and potentially achieve higher returns. This review explores Yieldstreet’s offerings, fees, returns, and overall suitability for different types of investors.

Best For

• Accredited investors looking to diversify
• Alternative investments to stocks and bonds
• Investors looking for passive income

Pros

• Easy-to-use platform
• Carefully selected offerings
• Excellent mobile app
• Full spectrum of alternative offerings
• Options for non-accredited investors

Cons

• Majority of investments only open to accredited investors

It’s Never too Late to Join the Alternative Investment Party

If you’ve been sitting on the sidelines waiting for an opportunity to get into alternative investments, there has never been a better time to get into the game. The rise of online investing platforms has created a diverse marketplace of investment offerings in almost every alternative investment sector. The only thing left for you to do is figure out what you want to get into and how you’re going to do it.

Remember, even though you’re making alternative investments, the fundamentals of investing still remain the same. You always face the risk of loss, which means you need to conduct due diligence and make sure you are as familiar with the downsides as the upsides of your chosen investment. If you do that, you’ll be well on your way to adding quality alternative investments to your traditional investment portfolio.

Frequently Asked Questions

The post How Much of Your Portfolio Should You Diversify Into Alternative Investments? by Eric McConnell appeared first on Benzinga. Visit Benzinga to get more great content like this.

Real estate investment trusts (REITs) have gained popularity among investors looking to diversify their portfolios with real estate assets. One key aspect that sets REITs apart from other investment vehicles is their unique tax treatment.

REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends. These dividends are subject to ordinary income tax rates, which can be higher than the tax rates on long-term capital gains. Additionally, a portion of REIT dividends may be classified as non-taxable return of capital, which can reduce the immediate tax burden for investors. However, this tax deferral can have implications for capital gains taxes when shares are eventually sold.

What is a REIT?

A REIT is a managed fund that invests in real estate or something related to real estate. The goal of every REIT is to maximize profit and minimize risk for investors by building a large portfolio across a wide geographic area. Buying into REITs allows investors to get a slice of a diversified real estate pie without having to buy property outright.

The investments offered by REITs are carefully chosen to offer investors safe, steady returns. This doesn’t mean there is no risk of loss with REITS, however, well-managed REITs consistently meet the goals laid out in their investment prospectus.

How are REIT Dividends Taxed?

REITs can generate many different types of income, even for the same investor. The distinction between the income types is important because the type of income generated determines the tax rate the investor pays on the income. Every investor who holds a stake in a REIT receives a form known as a 1099-DIV tax form, which breaks down the profits or losses from their investment. This form is distributed once per year, just like the W-4 or 1099 from your job.

Under most circumstances, the income generated by equity REITs is treated like miscellaneous income and taxed at the marginal tax rate. This means that most equity REIT income is taxed according to whatever tax bracket those earnings place the investor in. So, for example, a $1 million return on an equity REIT would be taxed at the highest marginal tax rate of 37%.

A notable exception to this is capital gains. If part of the dividends paid to an investor were earned through a profit made by the REIT on the sale of a building, the investor dividend will be taxed at the standard capital gains rate of 0% (for a loss or a 1031 exchange), 15% or 20%. The determining factor in the individual investor’s tax rate is their income level. Investors in the top income brackets are taxed at the maximum capital gains rate of 20% while investors in lower income brackets are taxed at 15%.

There is also something known as nontaxable income. Investors can earn nontaxable income when the REIT’s dividends and expenses total more money than the REIT earns in a given year. The most common cause for this is the REIT taking writing off large losses to depreciation on one, or several of its holdings in the same calendar year. In cases where this happens, the dividends paid out to investors will be classified as nontaxable income on their 1099-DIV form.

The Tax Cuts and JOBS Act

The Tax Cuts and Jobs Act of 2017 also had an impact on REIT taxation. Specifically, the act contained a provision that created a 20% tax break for qualifying “pass-through income.” Certain REIT dividends are covered under this provision. However, that tax relief may not be permanent because the provision allowing this particular tax break expires in 2025.

Are REITs a Safe Investment?

This is a trick question because all investments carry risk and there is no such thing as a “safe” investment. In spite of having the best fund managers armed with the best information, some REITs will lose money for their investors. With that said, most REITs are run by very seasoned professionals with highly successful track records of earning money for their investors. That’s why putting your money into REITs is probably a better, more reliable wealth-building option than buying properties to flip or manage yourself as a landlord.

If you’re worried about tax exposure, there are other investment options, such as bonds, exchange-traded funds (ETFs) and IRAs, all of which will offer you better tax advantages than many REITs. But which type of investment is right for you depends on what you’re more concerned with — tax exposure or profit potential.

Your individual risk tolerance is also an issue here. It’s unlikely that a REIT’s value will explode several hundred percent in one day the way you might see with a hot stocky. It’s also equally unlikely that a REIT will lose most (or all) of its value in one day’s trading.

Types of REITs

Here are the different types of REITs.

Equity REITs

Although there are many different types of REITs, the most common type is known as an equity REIT. Equity REITs own and operate large portfolios of commercial real estate, sometimes across several states (or even the entire country). The properties in equity REITs are chosen by the fund manager, who is usually a seasoned real estate professional.

REITs make money by taking a percentage of all building-related revenue (e.g., rent, late fees, parking charges) or selling properties in the portfolio at a profit. This happens when market conditions dictate (e.g., the fund manager believes the building has reached its peak market value) or the REIT wants to raise funds to purchase new properties. In either case, equity REITs pool existing funds with contributions from new investors to grow the portfolio and maximize annual returns.

Mortgage REITs

The second type of REIT is known as a mortgage REIT, which operates differently from equity REITs in several respects. Instead of buying and selling property, mortgage REITs combine investor contributions with money borrowed at low interest rates to buy mortgages, mortgage-backed securities, and other debt-related financial products. Mortgage REITs turn a profit when the interest rates on the loans they purchased exceed the interest rate on the money the REIT originally borrowed.

Mortgage REITs have several potential benefits for investors. The first one is that the loans mortgage REITs buy are secured by the properties being financed. It’s also probably easier for mortgage REITs to sell off a bundle of mortgages than it is for equity REITs to sell buildings when the market goes south. That’s because mortgages offer fixed returns for fixed periods of time and buildings do not. With that said, mortgage REITs are very sensitive to fluctuations in interest rates.

Hybrid REITs

The third type of REIT is known as a hybrid REIT. Hybrid REITs invest in both equity (buildings) and mortgages. The idea behind a hybrid REIT is pretty simple; it offers investors the best of all worlds. By investing in both equity and mortgages, hybrid REITs make themselves a “one-stop shop” for real estate investing. Investors can choose among a number of different offerings and diversify their real estate holdings, while still having all of their money managed by the same outfit.

REITs, Taxes, and What it Means for You

REITs can be wonderful tools for wealth building. Equity REITs allow you to reap the benefits of property ownership without going through the trouble of financing and managing your own property. Mortgage REITs let you buy into mortgage-backed securities and leveraged debt in a way that would be impossible unless you had millions of dollars in cash to lend. Hybrid REITs bring you the best of both worlds.

Regardless of what type of REIT you choose to invest in, if it pays a dividend, you’re going to have tax exposure. While Benzinga can lay out the broad strokes of this exposure for you, it’s always best to seek the advice of a tax professional if you have questions about how to handle investment income.

Frequently Asked Questions

The post Understanding REIT Taxation by Eric McConnell appeared first on Benzinga. Visit Benzinga to get more great content like this.

Vacation rentals have become an increasingly popular investment option, offering the potential for high rental income, property appreciation, and personal use benefits. With platforms like Airbnb and Vrbo making short-term rentals more accessible, many investors see them as a lucrative alternative to traditional long-term rentals.

However, vacation rental investing comes with challenges, such as seasonal demand fluctuations, management responsibilities, local regulations, and higher upfront costs. Understanding the risks and rewards is essential to determining whether a vacation rental aligns with your financial goals.

In this guide, we’ll explore the pros, cons, and key factors to consider before investing in a vacation rental property.

What Are Vacation Rentals?

A vacation rental is a privately owned property that is rented out to travelers on a short-term basis, typically through platforms like Airbnb, Vrbo, and Booking.com. These properties can range from apartments, condos, and beach houses to luxury villas and cabins.

Unlike hotels, vacation rentals offer more space, home-like amenities, and flexibility, making them popular among families, groups, and extended stays. They can be managed by the owner or a property management company and serve as an investment opportunity for generating rental income.

Advantages of Vacation Rentals

There are several advantages of vacation rentals, some of which are discussed below:

• High-Profit Potential: Short-term rentals often generate higher revenue than traditional long-term rentals. An example of this is luxury vacation rentals in popular destinations that can earn $20,000+ per month. Peak-season income of these rental properties can cover an entire year’s mortgage and still yield profit.
• Expanding Market Opportunities: Demand is rising in non-traditional vacation markets like Nashville, Tennessee, and Branson, Missouri, and properties near national parks, beaches, and cultural attractions are attracting strong bookings. Additionally, platforms like Airbnb and Vrbo have made it easier to reach a global audience.
• Personal Use & Flexibility: Owners can use the property for vacations when it’s not rented, and unlike long-term rentals, you can adjust pricing and availability as needed.
• Tax Benefits & Deductions: Setting up a vacation rental as an LLC can provide significant tax advantages. Under the 2017 Tax Cuts and Jobs Act, owners can claim a 20% tax deduction on pass-through income.
• Appreciation & Long-Term Investment Value: Vacation properties in desirable locations tend to increase in value over time. Investors can sell for a profit or convert the property into a long-term rental if market conditions change.

Drawbacks of Vacation Rentals

While vacation rentals offer unique and often cost-effective accommodations for travelers, there are some potential drawbacks to be aware of.

• High Operating Costs: Expenses for cleaning, maintenance, and utilities are higher than traditional rentals. Moreover, management fees (if hiring a property manager) can range from 20% to 40% of rental income.
• Seasonal & Market Fluctuations: Revenue depends on tourism demand, leading to off-season slowdowns. Further, unexpected events like pandemics and economic downturns can reduce bookings.
• Strict Local Regulations & Taxes: Many cities impose zoning laws, permit requirements, and occupancy limits. Additionally, short-term rentals may be subject to hotel taxes or special licensing fees.
• Higher Initial Investment: Popular vacation rental markets have higher property prices., and furnishing and equipping the property for short-term stays adds to upfront costs.
• Liability & Insurance Risks: Guest damage, accidents, or legal disputes can lead to unexpected expenses. Also, the cost of short-term rental insurance coverage is high.

Key Factors to Consider Before Investing in Vacation Rental Properties

Before diving into vacation rental investments, it’s essential to evaluate several key factors to ensure the opportunity aligns with your financial goals, risk tolerance, and long-term vision.

Location

The location of your vacation rental is crucial to its profitability. High-demand tourist areas, such as popular beach towns, ski resorts, or cities with major attractions, tend to generate higher rental income. It’s important to research the area’s tourism trends, market competition, and seasonal demand before making an investment. A property in a prime location can ensure consistent bookings, especially during peak seasons.

Local Regulations

Before investing, ensure you understand the local regulations around short-term rentals. Some cities impose strict zoning laws or require specific permits for vacation rentals, and non-compliance can lead to fines or legal issues. Additionally, certain areas may have hotel or occupancy taxes that can affect your rental income. Researching these regulations will help you avoid unforeseen costs and challenges down the road.

Initial Costs & Financing

Investing in vacation rentals often requires a larger upfront investment compared to traditional rental properties. Not only will you need to purchase the property, but there are additional costs for furnishing, decorating, and maintaining the home to meet guest expectations. Financing options may differ from regular real estate purchases, so it’s essential to understand the full financial commitment and determine whether the investment aligns with your budget and expected return.

Management & Maintenance

Decide whether you will self-manage your vacation rental or hire a property management company. Self-management gives you full control but requires time and effort for guest communications, cleaning, and maintaining the property. If you hire a management company, expect to pay around 20%-40% of your rental income in management fees. Consider these factors to ensure your rental remains in good condition and operates smoothly.

Occupancy Rates & Seasonality

Understanding the occupancy rates and the seasonality of the area is key to estimating potential revenue. Vacation rentals often experience fluctuating demand throughout the year, with peak seasons yielding much higher rental rates. Research historical occupancy data for the area and adjust your pricing accordingly to maximize income during busy times while maintaining competitive rates during slower seasons.

Taxes & Deductions

Owning a vacation rental comes with tax implications. You will need to pay income taxes on the rental revenue, and depending on the location, property taxes could be higher than traditional rentals. However, owning a vacation rental can offer certain tax benefits. For example, you may be able to write off expenses such as mortgage interest, maintenance, repairs, insurance, and utilities if the property is used primarily for rental purposes.

A Better Way to Invest in Vacation Rentals

As you can see, vacation rentals can be profitable, but there is still no such thing as a free lunch. There are a lot of potential pitfalls that go along with being an owner or operator of a vacation rental. The good news is that you’ve got more than one option for profiting from vacation rentals. Instead of owning and operating your own vacation rental, you can invest in real estate platforms that specialize in vacation rentals.

Best For

$100 Minimum Investment

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$100 Minimum Investment

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Arrived is a real estate investment platform that allows individuals to invest in rental properties with low capital. Founded in 2019 and backed by notable investors, Arrived enables fractional ownership of single-family rental homes, making real estate investing more accessible. With a fully managed approach, investors earn passive income without the responsibilities of property management. This review explores Arrived’s investment process, returns, fees, and overall suitability for different types of investors.

Best For

• Small- to medium-sized investors
• Investors interested in rental income
• Investors looking to diversify

Pros

• Buy-ins as low as $100
• Open to non-accredited investors
• Offers ownership shares in real property (and all the tax benefits)
• Multiple ways to earn dividends (rental income and property appreciation)
• Great way to diversify portfolio
• Open to self-directed individual retirement accounts (IRAs)
• Detailed analytics and data to help investors make informed decisions and maximize their returns

Cons

• Long hold periods
• No secondary market to liquidate shares

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Yieldstreet is an alternative investment platform that provides access to asset classes typically reserved for institutional investors. Founded in 2015, it offers opportunities in real estate, art, marine finance, legal finance, and more. By focusing on income-generating investments with varying risk levels, Yieldstreet aims to help individual investors diversify their portfolios and potentially achieve higher returns. This review explores Yieldstreet’s offerings, fees, returns, and overall suitability for different types of investors.

Best For

• Accredited investors looking to diversify
• Alternative investments to stocks and bonds
• Investors looking for passive income

Pros

• Easy-to-use platform
• Carefully selected offerings
• Excellent mobile app
• Full spectrum of alternative offerings
• Options for non-accredited investors

Cons

• Majority of investments only open to accredited investors

Best For

Beginner Real Estate Investors

Overall Rating

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get started securely through Fundrise’s website

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Disclosure: This is a testimonial in partnership with Fundrise. We earn a commission from partner links on Benzinga.com. All opinions are our own.

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Fundrise is an online real estate investment platform that allows individuals to invest in a diversified portfolio of commercial real estate properties. The platform pools investor funds and uses them to acquire, manage, and sell various types of real estate assets, such as apartment buildings, office spaces, and retail centers.

One of the key advantages of Fundrise is its accessibility to individual investors who may not have the capital or expertise to invest directly in real estate. By pooling funds together with other investors, Fundrise allows individuals to access a diversified portfolio of real estate assets without having to purchase properties on their own.

Fundrise also offers transparency to its investors. The platform provides regular updates on the performance of the portfolio, allowing investors to track their investments in real time. Additionally, Fundrise offers a user-friendly interface that makes it easy for individuals to invest and manage their portfolios online.

Best For

• New real estate investors looking to get their feet wet
• Non-accredited investors
• Real estate investors who want a “set-it and forget it”-oriented option
• Investors looking for low-to-moderate cost buy-ins

Pros

• Multiple offerings available to non-accredited investors
• Simple menu of investment options
• Can use for IRA contributions
• Incredibly affordable buy-ins
• Low, easy-to-understand investor fee schedule

Cons

• Extended hold periods
• Limited secondary market

The reality is, unless you have specific property management experience, a lot of patience, and live within easy driving distance of your vacation rental, investing in vacation rentals through a platform might be the most efficient way to go. Yes, there is always a risk of loss, but at least you’ll be investing in properties that have undergone due diligence from an experienced group of investors who know how to make them profitable.

Frequently Asked Questions

The post Are Vacation Rentals a Good Investment? by Eric McConnell appeared first on Benzinga. Visit Benzinga to get more great content like this.

Real estate investing comes with its set of expenses beyond the initial purchase price, and one crucial aspect to consider is capital expenditures (CapEx). CapEx reserves are funds set aside by property owners to cover future expenses related to maintenance, repairs, and upgrades. Calculating the appropriate amount for CapEx reserves is essential for ensuring the long-term financial health of an investment property.

A Real Estate CapEx Reserves Calculator can be a valuable tool for property owners and investors. This tool helps in estimating the amount of money that should be allocated for CapEx reserves based on factors such as property type, age, size, and location.

What are Capital Expenditures?

A capital expenditure is any repair, installation or upgrade that will extend the life of a given property. The main difference between a capital expenditure and routine maintenance is that routine maintenance only restores a broken or malfunctioning system to its original working condition. For example, replacing the valve on a leaky faucet is a routine repair, whereas upgrading the plumbing for the entire building from galvanized lead pipe to copper pipe is a capital expenditure.

This is because fixing the leaky faucet only returns the sink to its normal function, but upgrading to copper pipes will result in better water flow, more consistent water temperature and improved water service for the entire building. Common examples of other capital expenses include the following:

• Roof replacement
• Replacing existing electrical wiring with new insulated conduit
• Replacing single-pane windows with energy-efficient double-paned glass
• Adding solar panels to the roof
• Converting toilets and shower heads to low-flow models
• Installing new flooring
• Installing a new sprinkler system
• Installing new appliances
• Furnishing rental apartments
• Installing a new security system

Why are Capital Expenditures Important?

Capital expenditures are important because of the long-term improvements they make to the investment property. These improvements make properties more user-friendly and desirable to potential renters, which translates to higher rents and net operating income (NOI).

Additionally, capital expenditures, such as installing solar roof panels or upgrading to copper piping, can drastically lower the owners’ outlay for utilities and/or qualify them for rebates from local utility companies. Again, this will increase the property’s NOI and reduce the amount of money real estate investors must budget annually for maintenance in their operating budgets.

The cost of capital expenditures can be very high, but capital expenditures are unavoidable. An aging, badly leaking roof on a 10,000-square-foot building must be replaced because if the owner doesn’t do it, the vacant space won’t be rented, which means there is no money to be made off the building.

Worse still, if the roof isn’t repaired, the building could be declared uninhabitable by the local government. This means that the owner can’t collect rent or must refund rent paid and allow tenants to break their leases without penalty. These are all disaster scenarios for any commercial landlord.

The high cost of most capital expenditures necessitates that commercial property owners set aside money from their buildings’ NOI for CapEx reserves. Think of it as a rainy day fund. No matter how many consecutive days of sunshine you may have, it’s going to rain one day, and if you have no money in your rainy day fund, you could well find yourself in the position of having to divert monthly rental income meant for other expenses such as insurance or property management to a major repair.

Worse still, many capital expenditures cost so much money that it’s impossible to rob Peter to pay Paul in order to cover them. After mortgage and expenses are taken out of a property’s gross monthly income, there may well not be enough money available to cover a large capital expenditure such as replacing the roof on that 10,000-square-foot building. This could force the property owner to take out a loan on the building, which increases debt service and eats into the owner’s cash flow after expenses.

On top of that, there are many capital expenditures that owners are required to make. Lenders such as Fannie Mae and Freddie Mac can require owners to upgrade existing fixtures to their requirements in order to stay in compliance with their loan terms.

Capital Expenditures Cover Depreciation

All cars depreciate over time because of constant use and a flow of newer, more modern inventory coming on the market. Believe it or not, real estate is the same way, and that’s why capital expenditures are necessary. They cover the cost of depreciation.

Every major system that makes an investment property viable — plumbing, electrical and roof — will eventually fail or need replacement at some point during the property’s lifetime. That’s why it’s essential for property owners to set aside money for capital expenditures. Because if they don’t have money set aside for these eventualities, the high cost of capital expenditures could force them into a premature sale.

Real Estate CapEx Calculator

Can a Normal Business Have Capital Expenditures?

The short answer to that question is yes, absolutely! When Verizon upgrades its entire cell phone network from 4G to 5G, that’s a classic example of a capital expense. Another example of capital expenditure for a normal business would be Target upgrading all its point of sales (POS) systems at the checkout terminals.

Additionally, in cases where you own a business that’s operating on a triple-net lease, you need to have a CapEx reserve because you will be responsible for a share of any capital expenditures that become necessary during your lease term. Lastly, if you should buy the building where your business is located, you’ll definitely need CapEx reserves as the property owner.

Who Saves CapEx Money?

You as a principal owner, your partners or anyone else with an equity share in your property must tuck away money for CapEx reserves. Remember, all the money collected from rent is not profit. Before you can realize any net cash flow from an income property, it is absolutely critical to set aside a CapEx reserve fund and contribute to it regularly.

The same goes for a non-real estate-related business. The failure to establish and maintain CapEx reserves by any property owner or business eventually will threaten the livelihood of the business itself. It’s not a question of if, but when a major capital expense will need to be paid.

What Do you Do With CapEx Money?

CapEx reserves should be maintained in a separate account with a firewall between them and any operating funds so that it is only available for CapEx-related projects. If you do make the decision to invest CapEx funds, they should be put into something as safe and low-risk as possible.

Obviously, lower-risk investments have lower returns, but if you are properly adding to your CapEx reserves regularly, you are growing them already. So, you really only want a safe investment to raise the reserves by a small amount. The idea is to grow CapEx reserves by saving them — not investing a small amount of money to grow them by playing the market.

How Much CapEx Money Do You Need?

A good rule of thumb is to maintain a CapEx reserve equivalent to 10% of a property or business’s annual income. So, a property or business making $1 million per year should have a CapEx reserve of at least $100,000. However, every business is different so it’s a good idea to research what other similar businesses are setting aside and use that as a guide.

How to Manage CapEx Projects?

Property and business owners can take several proactive steps to help manage CapEx projects. These include:

• Only hire reputable, licensed contractors after reviewing multiple bids.
• Work closely with the contractor on the budget for the project.
• Maintain a complete, up-to-date ledger for all CapEx spending and review it regularly.
• Stick to the established budget for CapEx reserve projects to the greatest extent possible.
• Establish a review and approval process to ensure you and your partners approve all CapEx expenses.
• Review CapEx reserve budgets on an annual basis to account for depreciation and new projects.
• Do not commingle CapEx reserve funds with the operating budget or divert CapEx funds for any other purpose.

Featured Offerings for Real Estate Investing

Best For

$100 Minimum Investment

Overall Rating

Read Review

Get Started securely through Arrived’s website

More Details

Best For

$100 Minimum Investment

N/A

1 Minute Review

Arrived is a real estate investment platform that allows individuals to invest in rental properties with low capital. Founded in 2019 and backed by notable investors, Arrived enables fractional ownership of single-family rental homes, making real estate investing more accessible. With a fully managed approach, investors earn passive income without the responsibilities of property management. This review explores Arrived’s investment process, returns, fees, and overall suitability for different types of investors.

Best For

• Small- to medium-sized investors
• Investors interested in rental income
• Investors looking to diversify

Pros

• Buy-ins as low as $100
• Open to non-accredited investors
• Offers ownership shares in real property (and all the tax benefits)
• Multiple ways to earn dividends (rental income and property appreciation)
• Great way to diversify portfolio
• Open to self-directed individual retirement accounts (IRAs)
• Detailed analytics and data to help investors make informed decisions and maximize their returns

Cons

• Long hold periods
• No secondary market to liquidate shares

Best For

Diverse Range of Alternative Investments

Overall Rating

Read Review

Get started securely through Yieldstreet’s website

More Details

Best For

Diverse Range of Alternative Investments

N/A

1 Minute Review

Yieldstreet is an alternative investment platform that provides access to asset classes typically reserved for institutional investors. Founded in 2015, it offers opportunities in real estate, art, marine finance, legal finance, and more. By focusing on income-generating investments with varying risk levels, Yieldstreet aims to help individual investors diversify their portfolios and potentially achieve higher returns. This review explores Yieldstreet’s offerings, fees, returns, and overall suitability for different types of investors.

Best For

• Accredited investors looking to diversify
• Alternative investments to stocks and bonds
• Investors looking for passive income

Pros

• Easy-to-use platform
• Carefully selected offerings
• Excellent mobile app
• Full spectrum of alternative offerings
• Options for non-accredited investors

Cons

• Majority of investments only open to accredited investors

Best For

Beginner Real Estate Investors

Overall Rating

Read Review

get started securely through Fundrise’s website

More Details

Disclosure: This is a testimonial in partnership with Fundrise. We earn a commission from partner links on Benzinga.com. All opinions are our own.

Best For

Beginner Real Estate Investors

N/A

1 Minute Review

Fundrise is an online real estate investment platform that allows individuals to invest in a diversified portfolio of commercial real estate properties. The platform pools investor funds and uses them to acquire, manage, and sell various types of real estate assets, such as apartment buildings, office spaces, and retail centers.

One of the key advantages of Fundrise is its accessibility to individual investors who may not have the capital or expertise to invest directly in real estate. By pooling funds together with other investors, Fundrise allows individuals to access a diversified portfolio of real estate assets without having to purchase properties on their own.

Fundrise also offers transparency to its investors. The platform provides regular updates on the performance of the portfolio, allowing investors to track their investments in real time. Additionally, Fundrise offers a user-friendly interface that makes it easy for individuals to invest and manage their portfolios online.

Best For

• New real estate investors looking to get their feet wet
• Non-accredited investors
• Real estate investors who want a “set-it and forget it”-oriented option
• Investors looking for low-to-moderate cost buy-ins

Pros

• Multiple offerings available to non-accredited investors
• Simple menu of investment options
• Can use for IRA contributions
• Incredibly affordable buy-ins
• Low, easy-to-understand investor fee schedule

Cons

• Extended hold periods
• Limited secondary market

Investing in Commercial Real Estate

Capital expenditures are a cost of doing business for everyone. This is as true for brick-and-mortar business owners as it is for real estate investors. That means maintaining CapEx reserves is a fundamental building block of any successful business.

If you have any questions about what the proper CapEx reserves should be for your particular investment, or what is and what isn’t a Capital expenditure, Benzinga provides a wealth of information that can give you some clarity. But the key thing to remember about capital expenditures is that it’s not a question of if, but when you will have them. So, it’s always better to prepare in advance.

Frequently Asked Questions

The post Real Estate CapEx Reserves Calculator and Guide by Eric McConnell appeared first on Benzinga. Visit Benzinga to get more great content like this.