Everybody knows investing in real estate is a great way to make some serious money. Yeah, sure, if you’ve already got tons of money to bankroll your budding empire. But now you can invest like the 1% does, and all you need to get started is $500.
A company called DiversyFund will invest your money in commercial real estate — specifically, in apartment complexes that it owns across the country.
It’s true that this kind of thing used to be exclusively for the rich, and here’s their secret: Owning and developing real estate can potentially earn you way more money than the stock market.
No wonder the rich get richer. But now you can get in on some of the action, too.
Why Real Estate?
Let’s face it: The stock market is a volatile place. Stock prices shoot up and down like a roller coaster ride, and who knows when the whole shebang might crash and take all your savings with it?
If you put some money in real estate, you’re diversifying your investments. You’re spreading your money around to reduce your risk. It’s the age-old principle of not keeping all your eggs in one basket. Financial advisers say this is a key strategy for building long-term wealth.
Another cool thing about DiversyFund is that it won’t charge you any asset management fees. Unlike its competitors, the company buys all its properties and does all its research in-house. It searches for, analyzes, purchases and manages its own apartment buildings, doing without the usual layers of middlemen and management fees.
The company’s two co-founders have nearly 40 years of real estate investment experience between them. In their view, the smartest and safest investments are multi-family housing complexes.
DiversyFund buys properties that are located in economically growing areas and are already making money across the US.
It also looks for properties that it can upgrade so it can charge higher rents. That way, it can turn a nice profit when it sells the property..
That’s how DiversyFund operates its real estate investment trust, or REIT. Typically, to buy into a private equity real estate fund, you’d need to be an “accredited investor” with a six-figure income and a million-dollar net worth.
In other words, you’d need to be a moneybags, already rich.
But this one is open to non-wealthy types like you and me.
Long-Term Financial Health, Not a Get-Rich-Quick Scheme
It’s important to note that real estate is more of a long-term investment, and DiversyFund is no exception. You may get great returns, but you can’t expect to make quick cash here.
For example, income from apartment rents is automatically reinvested in the fund. It doesn’t get distributed to investors like you on a month-by-month basis.
The fund makes money — and you make money — when it sells its properties. That’s one way that rich investors build their wealth over time.
So you don’t need a fortune to invest in real estate. With only $500, you can play with the big boys.
Mike Brassfield ([email protected]) is a senior writer at Codetic.