Real Estate Investing: Crowdfunding Versus Buying Property Outright

Feb 26, 2014

Crowdfunding is one of the most popular practices to hit the real estate investment market in years. A practice similar to investing in a Real Estate Investment Trust (REIT), crowdfunding involves a group of investors who pool their resources and co-invest in commercial properties. However, unlike investing in a REIT, crowdfunding lets investors to choose the properties in which they invest. When investing in a REIT, investors trust brokers to make investments.

Crowdfunding has become a popular option for investors who want more transparency and choice than investing in a REIT offers but don’t want to risk buying commercial properties outright. While the financial risk of buying your own properties is certainly greater than co-investing in properties, it also involves less reward. Depending on your investment goals, crowdfunding may be one of the longest routes to achieving the financial security you desire.



If you enjoy the speculative side of real estate investing, crowdfunding is a good way to make an investment in real estate without losing your hat if something goes wrong. However, for investors who are targeting investments that yield high monthly returns over an extended period of time, nothing beats investing in secure triple net lease properties that have a long lease period, and are occupied by a creditworthy tenant, such as Walgreens or McDonalds.

Buying a secure triple net lease property has a higher financial entry point than the average crowdfunding investment, but it also yields considerably higher and more consistent earnings. In addition to rent and utilities, the tenant pays property taxes, building insurance, and maintenance expenses. There is also the fact that a well established tenant typically prefers to renew the lease when it ends, as the location it occupies is typically one that’s good for business.


Crowfunding investments have their place, but they aren’t ideal for investors who want the high return one receives from being the owner of a valuable triple net lease property. Buying such a property may require you to take out a LOAN, but don’t let the prospect of incurring debt overshadow the security you get from owning a property whose financial history predicts an excellent ROI. In many cases, triple net investments perform better than the expected ROI.

If you are wavering between making a crowfunding investment in real estate and buying a triple net lease property outright, let the experienced real estate brokers at Westwood Net Lease Advisors review your investment goals. If buying a triple net property is the best option, we’ll use our industry connections and proprietary database that contains thousands of on-market and off-market commercial properties to find the right property for your investment needs.

Note: Before moving forward with any commercial real estate investment, we recommend hiring a real estate attorney and a CPA to oversee the legal and financial aspects of the deal. Having these professionals on your side will help you complete the transaction in an accurate, timely manner while avoiding potential risks.

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