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3 Reasons Why Investing in Real Estate Is Easier Than Ever
1. Start conservatively.
The first and most important aspect to remember when __investing__ is preserving money. “Market growth is slowing down,” explains Schoffler. “When you’ve worked hard to save money you can finally invest, you need to be careful to not just invest it anywhere. I recommend starting out by investing with a more conservative approach because I’ve done it the other way and lost.” “If you adopt the investment concept of compounding – the process of increasing your return based on reinvested earnings – you might be surprised what you could earn over time. But you need to be comfortable playing the long, rather than short game. Make sure your investments will perform well in both an up and down economy.”
2. Don't worry about diversification – just start.
A lot of people (including myself) are so worried about investing intelligently and maintaining diversification that they never begin investing. Schoffler suggests, however, “If the minimum buy-in is $5,000 for an investment you understand and really want to get into, don’t wait until you have $100,000 built up to participate. If you are fairly conservative with your early investments, you can earn while you learn.”
3. Technology is changing the game and inviting new players.
Before the passage of the JOBS Act in 2012, it was illegal for unaccredited investors to invest in non-traded REIT offerings. The only options were the stock market and possibly a fixer upper if you were willing to endure the hassle of being a landlord.
“However,” explains Schoffler, “since this legislation went into effect, and with the proliferation of fintech [financial technology] that enabled investment firms to serve more investors at lower costs, there are more opportunities to invest in professionally run, institutional quality real estate. And as a result, now large established investment firms such as BlackRock, Carlisle Group and others are launching online investment platforms, some with extremely low minimums.”
“Compared to traditional private offerings, they are also required to file a great deal more information, sharing it publicly through the SEC’s Electronic Data Gathering, Analysis, and Retrieval . This can help investors in their due diligence, process. The additional annual filings requirements also allow investors to keep better track of their investments, which gives investors way more information about these non-traded REITs.” Information, technology and transparency are removing the intimidating shroud that has historically covered the real estate investment market – making that leap from saver to investor that much easier for the future generations of millionaires.