Why Crowdfunding Real Estate Is Better Than REIT?

Making a property investment is a major commitment for most people. Responding to that a few years ago some smart financial people came up with what was known as a Real Estate Investment Trust or REIT.

REIT is conceptually very similar to mutual funds. You are busy and do not need to have the expertise or knowledge to make good investment decisions. And the amount of money you have is not enough to get the best offer.

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So, you give your money to a fund manager who collects money from a number of small investors like you and then invests in many properties.

The idea behind investing in many properties is that you get diversified and gain access to growth and cash flow for a number of premium properties, which you will never be able to get access to yourself.

And most REITs can also be traded. Just like Equity or Bonds, you can sell units that you hold to several other investors who are willing to buy giving you enough liquidity.

So the theory must be that the property market suffered a terrible crash and has been teetering since then and property manager experts are innocent.

The real estate crowdfunding platform lets you choose and choose specific properties and many places you want to invest and still invest only in small amounts. In this way, you do not have to pay the fund manager unnecessary fees and are burdened with white elephants.