Making an investment in real estate has always sounded like something very exclusive for which a lot of money is required, but it is no longer the case, thanks to new technologies one can invest in real estate with little money and very easily, here we show you 4 ways to invest in real estate with little money and without having to leave your home.
Real estate equity crowd funding
In an equity-type real estate crowd funding, what is done is that between multiple investors an apartment is bought which is expected to increase in value in a certain time, in other words, many people put some money and together they buy a pre-sale apartment to sell it in the near future.
In Canada there are multiple platforms that provide access to this type of investment:
M2CROWD: Equity type investments in M2CROWD are among the best out there because they have very high returns, very low amounts, and a lot of security.
Intersport: Investing in Inverspot is a bit complicated since the minimum amounts are high and it is not known exactly how much will be earned or how long the investment will last.
PM2: Investments in real estate with PM2 are from very low amounts from $ 200 is incredible, but they have very few opportunities so it cannot be diversified, the disadvantage of this platform at the moment is that it was not submitted to fintech law for which means that it is not regulated by anyone.
When making this type of investment it is very important to review the following factors:
Taxes: Not all platforms withhold taxes the same, so it is important to know the following, how much they withhold and ask if they give a receipt or an invoice about said withholding, usually the tax withholding has been 20% of the yield, but you always have to make sure of this.
Developer: Review the history of the company behind the property in which you are going to invest, check if it has had lawsuits, has been involved in fraud, or something like that, to do this the only thing left is to put the name of the developer in Google and check if anything negative comes out.
This type of investment has a very attractive yield which can exceed 20% per year, but in turn, there are certain associated risks such as that the department is not sold on time and your annualized yield falls or that it is not sold at the expected price.
Real estate crowd funding Debt
In this type of investment what is done is that a loan is financed which is guaranteed by real estate, this type of investment is very safe since the guarantees usually have 3 times the value of the money lent, therefore the risk that they do not pay is minimal. There is more than one crowd funding platform that allows you to access this kind of investment:
Briq: In briq the minimum investment amounts are very low and most of their offers have quarterly payments but when investing in briq you are charged an annual commission of 1% on the investment amount.
M2CROWD: The debt investments in this real estate crowd funding are very good, they have low amounts, quarterly payments and they do not charge you any commission.
Expansive: Offers have bi-monthly payments and low amounts, but offers take a long time to fill.
I have personally invested in the 3 platforms and they have always fulfilled me in a timely manner, the worst that has happened to me is that the payment has been delayed for 2 days; this kind of investment in debt is divided into 2 modalities:
Periodic interest payments: In this modality, they give you interest payments every so many months, the most common is that they are bi-monthly or quarterly payments on the interest, the capital is returned to you once the period is concluded, I like this modality because which allows me to have a constant cash flow.
Payment at the end of the period: In this modality, they will return your capital with the interest generated once the period ends; usually this type of investment gives you a higher return.
Buy part of a property
Imagine that you and your friends bought an apartment between everyone and divided the income according to what they invested, because in Canada there are platforms that allow you to do something very similar, what you do is that you buy a percentage of a real estate and one receive monthly income according to your investment, there are two platforms that allow you to do this:
100 Bricks: This platform shows multiple commercial and residential properties of which one can buy a small percentage, these properties are managed by professionals which help to have tenants who will be around for a long time and who will not cause problems, The yield in this type of investment is around 15% per year once you add the rents and the capital gain, it is a great opportunity if what you are looking for is to have a constant income without having to worry, also the minimum investment amounts are around the $ 25,000So you can diversify between many types of real estate and something unique is that they have investment opportunities which are listed and rented in dollars so you can also diversify between currencies.
Retna: This platform allows you to buy a part of a residential real estate which was designed to obtain the greatest amount of money in rents per square meter since it has very innovative projects such as co-living buildings, a disadvantage of this platform is that it has the highest minimum amounts since they are above $ 400,000 pesos, but also the security can be said that it is greater because they are a company which has spent years making investments in real estate to obtain performance-based on rent and not capital gains which make capital flows more predictable and since most of its developments are located in high demand areas in CDMX, the rents are very high compared to other parts of the country.
Invest in FIBERS
The real estate fibers are an excellent opportunity to invest in real estate with very little money and you can do it from $ 8 pesos, a fiber is a trust which is in charge of investing in real estate, usually, they buy a property and are responsible for rent it and give the income to investors, but there are also fibers that are responsible for developing the property, there are more than 10 different Fibers, all of them have characteristics that make them unique and different from the others for this reason before investing in a fiber Specifically, it is very important to find out about the strengths and weaknesses of this fiber.
Fibers, unlike other investments, are extremely liquid which means that you can buy and sell them whenever you want, another advantage of fibers is that by investing in them you are investing in a set of real estate and not just in one good because by making such a diversification the risk that something will go wrong is mitigated in an important way.
The FIBERS that I consider the best are the following:
FIBRA Education: As its name indicates, it focuses on real estate related to education such as large universities also have office buildings in their portfolio.
FIBRA Monterrey: This Fibra is diversified into three sectors: office, industrial, and very little commercial, it has rented in two currencies and its portfolio has properties
FIBRA HD: It is the only FIBRA that has monthly dividend payments, which makes it an alternative to different fixed income options.