A diversified investment portfolio is always a sensible option as it will increase your chances of getting a good return and protect you against market fluctuations. Interested in investing in real estate but not sure how much of your funds you should be putting into property? Here’s everything you need to know about how much you should look to invest in real estate.
For hundreds of years, the wealthiest people in the world have been putting their money into real estate for a few good reasons:
If you’re fortunate enough to be able to invest in a number of different assets, you may be wondering how much of your money should be invested into real estate? The answer will vary depending on your circumstances, the attitude of the advisor you speak to and how comfortable you are with risk.
Most information out there is aimed at investors with a high net worth, which will suggest that property should comprise around 25-40% of their investments. For example, someone with a net worth of $4 million could hold between $1 million - $1.6 million in property (including their home), leaving them with funds to invest elsewhere and to support their lifestyle.
For the average investor, the answer is a little different. There’s no hard and fast rule about how much you should invest in property. Those with a modest income may count their home as their sole asset and the only significant contributor to their net worth. While these investors will likely have a lot more than 40% of their net worth in property, the percentage is less important. What matters more is for these people is that they have at least some liquid cash reserves, rather than having every cent tied up in an asset.
The most important factor to consider is whether there is a way for someone with smaller cash reserves can invest in property. After all, it costs at least tens of thousands, if not hundreds of thousands, of dollars to enjoy the rewards of property, right? Wrong, actually.
Thankfully, there is a way to add real estate to your portfolio for less: by crowdfunding a property through Bricksave. Rather than purchasing an entire property and putting your entire life’s savings into one single asset, you can invest from as little as $1,000. It’s also ideal for investors who don’t have enough to buy a property outright, but would still like to get into real estate investing.
At Bricksave, we welcome investors with a little as $1,000 USD to invest. But to maximise your returns and give yourself the best possible chance of earning an impressive amount on your investment, we’d advise you to invest at least $5,000 if you can.
In previous years, our investors have generated a typical return of 9% on their investment (though this is not a guarantee of future performance). You would still gain an impressive amount on an investment of just $1,000, particularly compared to the poor interest rates offered by savings accounts. However, you could bump your first-year returns up from $90 to $450 by raising your investment amount to $5,000. And over four years, you could expect to earn between $360 and $1,800 in returns, for $1,000 and $5,000 respectively.
Real estate is an incredibly attractive investment class, and Bricksave can help you minimise the obstacles and maximise your potential returns. We’ll manage the property and ensure it’s occupied by tenants, allowing you to earn your share of rental returns as well as any appreciation once the property is sold.
Explore our intuitive digital investment platform and begin investing in real estate today.
Real Estate Crowdfunding - steady, reliable yields for growing wealth
Steady, reliable yields – the key to growing wealth over time Why do we invest? The answer is simple – to make money. You might be saving for your children’s …
What are rental returns, and how do you calculate them?
Rental returns and real estate Rental returns are the returns delivered on a property. Rents offer a long-term, steady source of income and are important for investors looking to diversify …
Why invest in Philadelphia?
Rising rent in the US isn’t exactly a shocking revelation. In fact, we’ve been seeing a year-on-year increase since 1980. And now, with prices again hitting record levels, real estate …