Real estate investment has long been a popular choice for those looking for a stable and potentially lucrative investment. But beyond the traditional purchase of residential or commercial properties, the real estate sector offers a wealth of alternative investment opportunities that can bring diversification and creativity to a portfolio. These alternative property investments range from land and property fund investments to innovative niche markets such as co-living spaces and green buildings. In addition, digitalisation offers new opportunities, such as real estate crowdfunding and investments in digital infrastructure. Each of these alternatives brings its own unique set of opportunities and challenges, allowing investors to develop tailored strategies that fit their financial goals and risk tolerance. In this introduction, we will explore some of these alternative real estate investments and outline how they can contribute to a robust and dynamic investment portfolio.
1. Crowdfunding for real estate: crowdfunding is a popular way to make money by offering loans or investments in projects ranging from short-term flips to longer-term development projects. This type of investment can help you generate returns based on interest, dividend payout and/or increase in value as the property is renovated or developed. In this list, you get an overview of the real estate crowdfunding players in Europe.
2. Real estate funds: Owners can diversify their wallets by participating in real estate funds, meaning they get access to different types of commercial properties with one investment. These funds also offer professional management company that monitors and manages their portfolio, which means owners need to spend less time managing it and can focus more on other goals like wealth accumulation and so on.
3. REITs (real estate investment trusts): REITs are publicly listed companies that invest in commercial real estate such as shopping malls, hotels, apartment buildings and so on. As with any other public company, paying investors pay dividends based on the company's performance and also potentially benefit from buyback programmes whereby their share price increases as more income is generated from investments in commercial real estate .
4. Mortgage loans: There are many online platforms that allow people to invest in commercial real estate by offering fixed-rate loans or investments. These platforms often offer more flexibility and lower minimum investment requirements than traditional financial institutions, making them ideal for novice investors. A provider of fixed-rate mortgage loans as an investment is e.g. Briqwise.
5. Group purchase of property : Group purchase of real estate is an emerging trend where several investors join forces to buy a property together. This form of investment, often organised by cooperatives or investment groups, allows individuals to participate in the property market with relatively small capital. The group shares both the costs and returns of the property, including rental income and capital appreciation. By spreading risk and costs, participants can benefit from the property market without bearing the full financial burden associated with individual ownership. Moreover, this approach provides access to larger or better located properties that would potentially be beyond the reach of individual investors. However, it requires careful management and clear agreements between all parties involved to avoid conflicts and ensure smooth operations. Through our co-invest formula allows you to co-invest in real estate.
