2021 Investment Guide • Benzinga

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Want to jump straight to the best? Diversyfund is definitely the best real estate investing platform for most people.

Among some of the riskier REITs are Hotel REITs. Although they carry a large risk, they are also one that can carry the most above-average rewards. As with any REIT, hotels offer a varying degree of risk, depending on the type of property.

What are Hotel REITs?

Hotel REITs own and manage specific types of hotels. The space is then rented to tenants. The main types of Hotel REITs are:

  • Luxury Hotels
  • Resorts
  • Business Travel Hotels

The level of services and amenities in each hotel will have a deciding factor in how they are classified. They can range from budget friendly hotels in small towns to 5 star resorts in popular tourist spots.

Benefits of Hotel REITs

●     The Economy. Although this can also be a major risk, it can be a major benefit. When the economy is doing really well, people are traveling and going on vacations. They are splurging on fancy hotels and all the amenities. When businesses are booming, there are more business trips and travel. This can make for astronomical returns and healthy gains.

Risks of Hotel REITs

●     The Economy. It goes hand in hand that the ups are good and the downs are bad. Hotel REITs can be greatly affected by the economy both ways. When it’s bad, there are more vacancies. Vacations and business trips are cut out due to financial struggles. This will in turn, make the hotels struggle too. Oversupply will occur as well, since hotels are generally built during economic booms. On the downturn, you end up with many vacancies and low, competitive prices.

●     Competition. The rise of offerings suchs as Airbnbs and VRBO are a risk factor to hotels. These accommodations have taken a decent chunk of people away from traditional hotels. With the comforts of home, incomparable amenities, and better prices, Airbnbs have proven to be a go-to option for many travelers.

●     Lease Structure. Unlike many other commercial properties, Hotel REITs do not have a several year lease agreement. They have daily rentals to manage. Their rates also fluctuate wildly on the time of year and economy. This makes their cash flow somewhat unpredictable and risky.

Although there do seem to be many risks associated with Hotel REITs, understanding the ebb and flow of the hotel industry is a must. Soaring returns are possible if you’re in it for the long hall. Plan to invest for at least 5 years to really get your highest profits. Short term investing just won’t return the same kind of money for Hotel REITs.

Best Hotel REITs

REIT Alternatives

REITs provide a low-cost and simple way to invest in real estate. However, they aren’t the only option available to generate passive income through real estate with a low minimum investment.

Real estate crowdfunding offers investors the ability to decide which properties they want to invest while still enjoying passive income at a fraction of the cost of traditional methods of investing in real estate. Here are some of our favorite real estate crowdfunding platforms:

1 Minute Review

Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with more than 10 investments. 

Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. However, most of the loans are given to house flippers, and there is a risk of borrowers defaulting on their loans. 

Best For

  • Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
  • Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
  • Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.
Pros

  • Charges the lowest minimums in the industry
  • 0 investor fees
  • Open to non-accredited investors
Cons

  • Offers no bankruptcy protection
  • High rate of an uncured default
  • Many loans are for judicial-only states

1 Minute Review

DiversyFund isn’t your average crowdfunding platform. You’ll find that the company puts a twist on the traditional everyday crowdfunding platform, beyond anything you can find online with a simple Google search. You only have to look under DiversyFund’s skin one layer to surmise that DiversyFund is a conscientious developer and sponsor and helps hedge risk through improved vetting.

DiversyFund offers a multifamily real estate investment trust, the DiversyFund Growth REIT, and its main goals are to increase cash flow and resale value. It’ll automatically give you access to multi-million dollar real estate assets.

Best For

  • Those looking for an alternative investment beyond stocks and bonds
  • Individuals who aren’t sure they want to be landlords in the traditional sense
  • Investors who aren’t accredited
Pros

  • Only need to pony up $500 to get started
  • Open to investors all over the world
  • No expensive broker fees
Cons

  • You’ll only be able to access “blind pool” investments, which means that you can’t opt out of specific properties
  • There’s only one real investment option, the DiversyFund Growth REIT

Minimum Investment

$1,000

Fees

0.85% asset management fee per year

Minimum Investment

$1,000

Fees

0.85% asset management fee per year

1 Minute Review

Fundrise makes real estate investing affordable to investors. The easy-to-use crowdfunding platform gives you a fixed rate of return on top real estate properties in the U.S. 

Here’s why investing your money through Fundrise can improve your portfolio and earn you a reliable source of income.  

Best For

  • Investors with a limited financial budget
  • Investors looking to instantly diversify their portfolio
  • Long-term investors with at least 5 years of commitment
  • Investors looking to earn fixed returns higher than 8%
  • Passive investors who do not want to monitor the market regularly
  • Investors looking for a transparent investment process
Pros

  • Low minimum balance to sign-up for an account
  • Plenty of low-cost real estate investments
  • Many listed properties project a lower risk rate
  • Wide range of real estate investments in prime locations
  • Open to non-accredited investors
  • Regulated by the SEC
  • Consistent track record of high returns
Cons

  • Charges a fee on early withdrawals from investments
  • Customer support does not feature live chat
  • Liquidity issues as eREITs and eFunds are not exchange traded

Minimum Investment

$10,000

Minimum Investment

$10,000

1 Minute Review

CrowdStreet is a commercial real estate investing platform where people can invest directly in commercial projects. Unlike a brokerage firm, CrowdStreet isn’t a middleman. Instead, the platform acts as a marketplace where investors can pick and choose the best deals for their time horizon and strategy.

Available investments range from family living spaces to office buildings to storage facilities and investors can sign up for a free membership. Your investment options are limited to what’s live on the Marketplace and you’ll need capital to build a diverse real estate portfolio. Only accredited investors can access deals through CrowdStreet.

Best For

  • Investors looking for diversification away from stocks
  • Real estate investors interested in new opportunities
  • Accredited investors with lots of capital at their disposal
Pros

  • Unique opportunities available
  • Makes real estate accessible and understandable
  • Investors can devote capital to both debt and equity offerings
  • Offers quality education materials and answers to FAQs
Cons

  • Real estate is highly illiquid
  • Most properties require a minimum $25,000 investment
  • You’re limited to what’s on the CrowdStreet Marketplace

Minimum Investment

$1,000

Minimum Investment

$1,000

1 Minute Review

Yieldstreet is an alternative investment platform that allows you to access unique, diversified and expert-reviewed investments. From real estate offerings to works of art, Yieldstreet offers investments that have low correlations with the general markets, meaning they can act as a new source of portfolio diversity.

Yieldstreet’s platform is easy to initiate and use — open an account in just a few minutes and begin browsing available investments before your account is fully verified. Due diligence information is easy to find and clearly laid out, and most investments include additional resources to learn more about the investment’s industry or category. Although the majority of investments are only open to accredited investors, anyone can invest in Yieldstreet’s Prism Fund.

Best For

  • Passive income generation
  • Accredited investors
  • New investors looking for an intuitive platform
Pros

  • Wide range of expert-reviewed alternative investments
  • Investments that are pre-funded by Yieldstreet
  • Prism Fund open to non-accredited investors
Cons

  • Majority of investments only open to accredited investors

DiversyFund accelerates your wealth creation by reinvesting cash flows from the properties — the DiversyFund Growth REIT is a public non-traded REIT designed to build wealth by investing in multifamily real estate and intends to build wealth over an approximate 5-year timeline. You don’t have to be an accredited investor to invest in Diversyfund. Open a Diversyfund account today.

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