How to invest in real estate when you don't have a lot of money


Take a cue from the Property Brothers: Real estate can be a money-maker. But you don't necessarily need to buy a home to get started. In fact, investing in real estate is a fairly common way for investors to diversify their portfolios, and it can be easier than you think.

"Among all the private investment opportunities, real estate typically outperforms other asset classes and is usually less volatile," Brian Dally, CEO and cofounder of Groundfloor, a firm that lends investor money to house-flippers and other developers, told CNBC last year. "People are familiar with the idea of homeownership," he said, "so real estate investing isn't overly complicated to comprehend."

Here are a couple of ways you can invest in the real estate market without a lot of money:


"Real estate investment trusts," or REITs, are probably the easiest way to invest in real estate for most people. REITs are pooled investor assets, so when you purchase one, you're investing in commercial properties like apartment buildings or hotels.

They typically offer investors higher dividends than stocks or bonds, and you can buy or sell them on the stock exchanges, like stocks or ETFs.

One example, STAG Industrial, is a REIT that invests in industrial properties around the county, like warehouses and distribution centers. STAG and other REITs are generally listed on the New York Stock Exchange and you can buy shares the same way you would other stocks.

What is an ETF and should you invest in one?

Crowdfund real estate projects

Several different online platforms let investors without a lot of money invest in commercial real estate, like office buildings and apartment complexes. For example, investors can buy shares of a single project, like a commercial office building, for $100 each. Once the project is completed, investors can see a return as their shares appreciate and the building's tenants pay rent, which is divvied up and paid out like a dividend.

Crowdfunding has become increasingly common in recent years and is used to fund a variety of projects, including film productions. Some of the more popular real estate crowdfunding platforms include CrowdStreet and Fundrise.

There's no guarantee that a project will be completed and ultimately provide investors with a return, though. It isn't always easy to get your money out on short notice and some platforms charge investors large fees.

Understand the risks

Investing in property, especially commercial property, can be a good way to diversify your portfolio and potentially lead to high returns, but it comes with unique risks.

Real estate can be volatile, though it is generally less volatile, on a day-to-day basis, than stocks. For commercial real estate investors, there's also cash flow to worry about: If the economy goes into recession, there's a chance that businesses could shutter, causing properties to lose tenants, revenue, and value.

So doing your research, especially on individual projects or investments, is incredibly important. Still, investing in real estate is a relatively easy route for the average investor looking to diversify their holdings.

"Global real estate is an enormous part of the global economy," Daniel Kern, a certified financial planner and chief investment strategist at Boston-based TFC Financial Management, told CNBC in 2016. "It should have a role in an investor's portfolio."

More from Grow:

acorns+cnbcacorns cnbc

Join Acorns


About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2021 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.