Real estate investments require a lot of money, skills and even more professional knowledge to stay in the business and make some money. For those who are always looking for ways to make investing and working in realty easier, crowd funding and REIT have been a new opening. They allow average investors to make big money.
Real Estate Investment Trust
A real estate investment fund or REIT is a very basic concept where more than two people come together to invest in real estate. Vancouver is a great place to look into this fund, honestly a lot of the owners of coal harbour real estate uses this. This sector, unlike other sectors can require thousands of dollars of investment. You may have all the expertise required for real estate deals but may not have enough capital. Or on the other end of the spectrum, you may have the financial support that is required for an investment as huge as real estate but do not have enough industry knowledge to make any decisions yourself.
So one person takes responsibility of your and other partner’s funds and decides to invest it in properties that seem to be appreciating quickly. This way you are investing in and getting benefits of premium properties that you would not have been able to access without monetary support from other members. This means more money for you in a lesser time.
Most people believe that REIT seems flawless on the fore but as you dig deeper, you realize it has its shortcomings. First of all the fund, managers who invest your money in the establishments of their choice ask for a huge fee. It does not matter if your investment does well or not, they will still charge you.
The second shortfall is the fact that you as an investor have very little control over where your money will be used. You cannot choose the property that you want to put your money in.
Experts say it is better to either stick to the investments you can make with the knowledge you have or participate in crowd funding. Crowd funding is being hailed as a new concept where a lot of people raise small amounts of money individually to invest in a larger venture.
It is considered better than REIT as there are no fund managers here charging exorbitant fee. Also everyone’s money is equally at stake. Crowd funding also allows you to choose the properties you want to invest in.
Like every other business today, crowd funding too utilizes social media for reaching out.