This isn’t to say you should never buy a home or think of it as an investment. Other real estate investments, like REITs, have seen average annual returns as high as 11.28%, according to Nareit-even a vanilla S&P 500 ETF has provided average annual returns of about 10% long term. While there are areas of the country where home appreciation is much higher, on average the house you live in is unlikely to dramatically grow in value, especially once you figure in costs like maintenance and repairs, insurance, property taxes and the interest you pay on your mortgage. From 1994 to 2019, homes only increased in value about 3.9% annually, according to a report from industry analyst Black Knight. While investing in your own home can help you build wealth over the long term, average annual returns are less than you might expect. With luck and strong demand in your local market, you can cash in on the equity when you sell your home. You take out a mortgage, make your monthly payments and gradually build ownership in your home. Primary residences are the most common way most people invest in real estate. Some require you to be an accredited investor-meaning that you own $1 million in assets other than your primary residence or you make more than $200,000 a year.įundrise and Crowdstreet are two popular platforms that offer a range of different options from real estate funds to individual real estate projects. Most require minimum investments, ranging from $500 to $25,000 or more. Keep in mind that you may not be eligible to participate in all online real estate platforms. Be sure to look out for any fees or additional management costs, which can diminish your returns. You may be able to access some of your money before then, but it’ll be up to the platform’s discretion and you may face early withdrawal penalties. They generally require investors to commit to real estate investments for longer periods of time, five years or more in many cases. Real estate crowdfunding platforms pool money from multiple investors to fund development projects. Many of these online platforms let you invest in specific real estate development projects, rather than large, generic portfolios of properties. Investors who’d prefer to take a more hands-on approach should check out crowdfunding real estate investing platforms. New investors without a lot of money can invest in fractional shares of REIT ETFs via investing apps like Stash, M1 Finance and Robinhood. In addition, you can buy shares of exchange traded funds ( ETFs) that own shares of many REITs. This makes REITs about the most liquid real estate investment available.

You can buy and sell shares of REIT stock in the market via a brokerage account, like any other public company.

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