Investing in real estate has always been considered one of the reliable and promising ways to invest. In our rapidly changing world, new and unique ways to access this market are emerging.
Today we will look at the three main ways to invest in real estate: traditional purchase, tokenized real estate and shares of real estate companies. The purpose of this article is to explain what minimum financial resources are required to get started in each of these avenues.
Traditional real estate investment
Buying real estate is a classic and well-known investment method. However, what is the minimum starting capital to enter this market?
- Initial capital. The minimum amount depends on the market, type of real estate and a number of other factors. For example, in Eastern Europe, Turkey and Southeast Asia you can buy an apartment within $50,000, while in America and Western Europe prices start from $200k.
- Additional costs. Don't forget about additional costs such as agent commissions, taxes, insurance and legal fees. These factors can increase the starting amount by 5-15%.
- Pros and cons. The main advantage is full ownership of the real estate object and stability. But low liquidity is a disadvantage.
In the following sections, we'll look at alternative ways to invest in real estate that may be suitable for those looking for more affordable or flexible options.
Tokenized real estate
Tokenized real estate represents a new and exciting way to invest. Instead of buying a physical property, investors purchase digital tokens representing a stake in the property.
- Minimum amount to invest. Tokenized real estate can lower the entry threshold, making investment available starting from $100-1000 per share in the property.
- Benefits and risks. This approach offers flexibility and liquidity, but also involves unique risks such as regulatory uncertainty in many countries.
Tokenized properties are more liquid and affordable than conventional real estate. For example, Home Key offers yields of up to 73% per annum.
Shares of real estate companies
Investing in real estate stocks provides another opportunity to participate in this market. It is as if you are buying not just one house, but micro shares in thousands or millions of houses at once.
- Minimal investments. You can start with the purchase of one share, the price of which can start from a few dollars. Thus, you can determine a comfortable amount of investment for yourself.
- Benefits and risks. Investing in stocks provides diversification and growth potential, but also involves market risks. The shares of companies on the stock market are quite volatile. Also, if the company collapses, you risk losing your funds.
Tokenized real estate and shares in real estate companies offer interesting and affordable paths into real estate. They may be particularly attractive to those looking for alternatives to traditional real estate purchases with a lower entry threshold.
Useful resources
Real Estate Search Platforms:
- Zillow (USA),
- Realtor.com (USA),
- Rightmove (UK),
- Century 21 (international),
- RE/MAX (international).
Platforms for tokenized real estate:
Exchanges to buy shares and examples of real estate companies:
- NASDAQ: Simon Property Group (SPG), CBRE Group (CBRE), Equity Residential (EQR).
- NYSE: AvalonBay Communities (AVB), Vornado Realty Trust (VNO), Public Storage (PSA).
- London Stock Exchange: British Land Company (BLND), Land Securities (LAND), SEGRO (SGRO).