Real Estate Investing
Real estate is the most popular alternative investment for a reason — it generates passive income, appreciates over time, and hedges against inflation. Here's everything you need to know to get started.
What is real estate investing?
Real estate investing means putting money into property — either directly by owning physical buildings, or indirectly through financial instruments that give you exposure to real estate markets without the hassle of being a landlord.
For retail investors, the most practical options are REITs (Real Estate Investment Trusts), real estate crowdfunding platforms, and real estate ETFs. These let you invest in real estate with as little as $10, earn passive income, and diversify across dozens or hundreds of properties.
Real estate has historically delivered strong risk-adjusted returns, low correlation to the stock market, and a natural hedge against inflation — making it a cornerstone of many diversified portfolios.
The Landscape
Types of Real Estate Investing
REITs
BeginnerReal Estate Investment Trusts
Publicly traded companies that own income-producing real estate. The most liquid form of real estate investing — buy and sell like a stock. Required by law to distribute 90% of taxable income as dividends.
Real Estate Crowdfunding
BeginnerFractional ownership via platforms
Platforms like Fundrise and Arrived pool money from many investors to buy properties. You own a fractional share and earn proportional rental income and appreciation.
Commercial Real Estate
IntermediateOffice, retail, industrial, multifamily
Investing in income-producing commercial properties. Higher minimums but stronger yields. Accessible through platforms like CrowdStreet for accredited investors.
Private Real Estate Funds
AdvancedPooled private equity structures
Institutional-style funds that acquire, develop, or reposition real estate assets. Typically require accreditation, higher minimums, and long lock-up periods of 5–10 years.
Balanced View
Pros & Cons
Advantages
- Tangible, physical asset with intrinsic value
- Passive income through rental distributions
- Hedge against inflation — rents and values rise with prices
- Portfolio diversification away from stocks and bonds
- Tax advantages including depreciation deductions
- Accessible entry points from $10 via crowdfunding
Risks to Consider
- Illiquid — most investments lock up capital for years
- Platform and operator risk on crowdfunding deals
- Real estate markets can decline in downturns
- Management fees reduce net returns
- Best deals often require accredited investor status
- Due diligence is complex and time-consuming
Where to Invest
Top Real Estate Platforms
A quick comparison of the most popular platforms for retail investors.
Step by Step
How to Get Started
Determine your investor status
Check whether you qualify as an accredited investor ($200K+ annual income or $1M+ net worth). This unlocks more platforms and deal types. If not, you still have excellent options.
Decide on your investment type
Beginners should start with a diversified REIT fund (like Fundrise's eREIT) or fractional rental properties (like Arrived). These require minimal due diligence and offer broad exposure.
Choose a platform and open an account
Sign up on your chosen platform, complete identity verification (KYC), and link your bank account. Most platforms take 5–10 minutes to set up.
Start small and diversify
Invest a small amount first to understand how the platform works. Spread across multiple properties or funds rather than concentrating in one deal.
Reinvest distributions
Many platforms offer automatic dividend reinvestment (DRIP). Reinvesting your rental income distributions compounds your returns significantly over time.
Common Questions
Frequently Asked Questions
How much money do I need to start investing in real estate?
As little as $10 with platforms like Fundrise. Traditional direct property investment requires 20–25% down on a mortgage, but crowdfunding has made fractional real estate accessible to almost anyone.
Do I need to be an accredited investor?
Not for most beginner platforms. Fundrise, Arrived, and RealtyMogul all accept non-accredited investors. Higher-yield institutional deals on CrowdStreet and similar platforms do require accreditation ($200K+ income or $1M+ net worth).
How is real estate crowdfunding different from buying a REIT?
REITs trade on public stock exchanges and are highly liquid — you can sell in seconds. Crowdfunding platforms invest in private real estate deals with lock-up periods of 1–7 years, but often offer higher yields and more direct exposure to specific properties.
What returns can I realistically expect?
Beginner platforms like Fundrise have historically returned 8–12% annually. Commercial real estate deals on accredited platforms target 12–18%. These are not guaranteed — past performance does not predict future results.
How do I get my money out?
Liquidity varies widely. Public REITs are fully liquid. Fundrise offers quarterly redemption windows with some restrictions. Private deals on CrowdStreet or similar platforms are illiquid until the deal exits, typically 3–7 years.
Ready to explore real estate platforms?
Compare the top real estate investment platforms side by side — minimums, returns, fees, and more.
Educational Content Only: This page is for informational purposes and does not constitute financial, investment, or legal advice. All investments carry risk, including the possible loss of principal. Past performance does not guarantee future results. Always consult a qualified financial advisor before investing.