Between the growing influence of investor demand and stock benchmarks indicating the approach of the first bear market in nearly a decade — it’s safe to say that high volatility in the stock market is the norm, for now.
Those who see the writing on the wall are turning to alternative investment sources to grow their portfolios and ensure the health of their retirement funds.
One of the most popular alternative asset types today?
Let’s talk about why and how modern investors are approaching real estate investment, six modern tools that will help you add this new asset type to your portfolio, and a single platform for managing every asset in one place — no matter how traditional or alternative.
Why Real Estate?
Real estate is a powerful portfolio addition namely because of its low correlation to the stock market. That means it doesn’t move in tandem with the stock market. So if the stock market takes a big downturn, it doesn’t necessarily mean the value of real estate assets will tank in the same way.
This is the guiding principle behind portfolio diversification, which has been shown to help portfolios generate higher annual returns and experience fewer annual losses over time.
In addition, real estate value tends to increase with inflation.So when inflation and stocks create a downward spiral of volatility, you can make sure your portfolio is not only protected but productive with real estate assets.
Crowdfunding and REITs: The New Approach to Real Estate Investing
Perhaps the best news when it comes to real estate investing is that you don’t have to become a landlord or a real estate owner in the traditional sense in order to take advantage of the benefits!
Today, there are platforms that facilitate real estate crowdfunding. This is the practice of bringing together a group of people (aka the “crowd” in “crowdfunding”) to pool resources to purchase property — typically commercial real estate. Most often, these purchases are made through a vehicle known as a real estate investment trust, or REIT.
The REIT purchases, leases, and manages the property. All investors have to do is buy shares in the REIT. Collected rent makes up the bulk of the dividends that get distributed back to investors. So not only are real estate assets diverse, they also offer passive income in a way that many traditional investments don’t.
Now, let’s talk about six modern platforms that investors can use to become real estate (and beyond) investors in minutes.
Yieldstreet vs. Fundrise
First up, we’re going to compare two of the most robust alternative asset crowdfunding platforms on the market right now: Yieldstreet vs. Fundrise.
Yieldstreet Review: Access Alternative Assets Previously Limited to Accredited Investors
“Yieldstreet offers a curated selection of alternative investment opportunities that were previously only available to institutions and the ultra-wealthy.”
That current tagline from Yieldstreet’s website gives a pretty great overview of what they want you to know about the platform.
In addition to real estate, Yieldstreet is big on offering “fractional ownership” (we like that term!) in a variety of asset classes, many of which have only been accessible by accredited investors until now. The main asset types they mention online include:
- Art equity
- Legal finance
- Private equity
- Venture capital
Yieldstreet boasts a simple yet thoughtful process that helps DIY investors start investing in diverse assets. First, originator partners are vigorously screened, then any investment opportunities that come from these partners are reviewed by Yieldstreet’s own team. After that due diligence is done, Yieldstreet’s users get to choose which deals to invest in. Yieldstreet’s team will then monitor and report on performance, but users can also view some basic metrics within the platform. Payouts are made to the Yieldstreet Wallet, where money can be cashed out or reinvested.
As far as we can tell when it comes to the fee structure, Yieldstreet collects an annual management fee, and different investments may come with their own flat fees as well. Investment minimums are typically in the thousands, for example you can get into their Growth & Income REIT for $5,000, but some offerings like their Prism Fund can be accessed for $500.
Fundrise Review: Invest in Real Estate Assets for Less Than The Cost of a House
Fundrise is a real estate crowdfunding platform that aims to provide affordable yet institutional-quality real estate investments to more DIY investors than ever before.
They achieve this goal by investing in REITs (which they call “eREITs”) using a "value investing" strategy. This investment strategy revolves around acquiring real estate assets for less than their intrinsic value, then putting in hands-on work to grow their value.
Within Fundrise, users can choose their own portfolio strategy, receive updates on the actual real estate properties in which they’ve invested (this is unique), and view investment performance.
Fundrise is also unique for its low minimum investment. Their solution to the “high advisory fees, hidden management fees, and return-limiting performance fees” that they see in the industry is lowering their costs, shrinking investor feels, and increasing accessibility through approachable minimums. Fundrise pricing is broken into “account levels.” Investors can get started for as little as $10, though the most popular account level requires a $5,000 initial investment.
Other Real Estate Investing Platforms to Consider
So that was a breakdown of a few of the biggest platforms in the alternative investment space, with a special focus on real estate. But if you’re still on the hunt for the perfect solution, keep reading for our quick thoughts on some other great real estate investing tools to consider.
CrowdStreet: Award Winning Real Estate Crowdfunding
Investopedia named CrowdStreet the best overall real estate crowdfunding site of 2022 — an impressive feat.
With CrowdStreet, investors can go for individual deals, invest easily in managed funds, or take advantage of the platform’s advisory services to build a personalized real estate portfolio. The majority of CrowdStreet’s investment offerings require a minimum investment of at least $25,000, including their own REIT — CrowdStreet REIT I, Inc. (C-REIT).
DiversyFund: A Truly Accessible Investment Minimum
DiversyFund has a mission that’s starting to sound familiar — getting everyday investors access to real estate assets that used to be limited to the extremely wealthy.
The platform invites investors to buy shares in high-growth multifamily real estate assets (think apartment buildings, etc.) in order to increase their net worth and win financial freedom. Investors can get started with just $500, which we find to be quite a reasonable minimum investment.
RealtyMogul: Commercial Real Estate Focus
RealtyMogul empowers commercial real estate investment across several categories:
- Office buildings
- Residential real estate
With RealtyMogul, both accredited and nonaccredited investors can access private real estate offerings as well as two types of REITs — one focused on growth and one focused on income. The minimum for individual investments starts at $25,000. For REITs, it’s $5,000.
Roofstock: Remote Real Estate Investing and Management
Looking for more investment options? Roofstock takes an all-in-one approach. In addition to being a resource for buying rental properties as well as pre-made portfolios and REIT shares, individual and institutional investors can sell and even manage their properties via Roofstock.
Similar to many REITs (their REIT is called Roofstock One), the minimum cost to get into Roofstock’s REIT is $5,000. But unlike most, this REIT is only available to accredited investors. Otherwise there are no hard-and-fast investment minimums of which we’re aware.
Track Real Estate and Other Alternative Investments Under One Roof with Kubera
If this whole time you’ve been thinking “Real estate sounds great, but how am I going to keep track of yet another asset?!” — you aren’t alone in that.
Allow us to bring it all home. Yes, pun totally intended.
There is admittedly a downside to portfolio diversification — it leads to complex portfolios that can be quite the handful to understand and keep track of.
We saw that problem ourselves all the time as beginner investors. In fact, solving asset management issues like this is exactly why we created Kubera.
Just add all your asset details to Kubera’s spreadsheet-like interface — from NFTs to vehicles, crypto accounts, collectibles, real estate, bank accounts, and any other assets and debts. View some of the global financial accounts with which Kubera integrates here.
In addition to our automatically-updating dashboard, stock market and cryptocurrency tickers as well as integrations with asset valuation tools (like Zillow for real estate!) ensure you always understand the worth of your entire portfolio.
But Kubera isn’t just about tracking your real estate and other investments — it’s also helpful for understanding their return and how that’s impacting your wealth.
All you need to do is make sure the current value, purchase amount, and cash flow associated with each of your real estate assets is up to date. Kubera will add in holding time and automatically find IRR for your investments (internal rate of return is ROI + holding time + value changes).
In addition to showing you IRR in your preferred currency, Kubera will also simultaneously display the current performance of common indices and tickers (the S&P 500, Tesla, etc.). This is yet another tool to help you determine whether you're happy with investment performance — and prepare you to make an informed shift if not.
See an example of how we applied Kubera’s IRR calculator in an investment property scenario here.
Beyond our modern interface and cutting-edge IRR calculator, Kubera has yet another overview capability to ensure you’re managing your entire portfolio.
Check out our recap screen, where Kubera crunches all the data you’ve provided to create a granular view of asset and portfolio performance. You can zoom in on daily or month changes, or grab a quick year-in-review glance. Whatever you need, Kubera is finally here to make understanding your portfolio possible.
Get a handle on your real estate assets, as well as any other alternative and traditional assets you’re holding, with Kubera.
And be sure to share Kubera with any financial advisors or wealth managers with whom you work. They can white-label our solution as part of their client portal, creating a modern interface their more tech-savvy clientele will love.