How You Can Benefit From Marketplace Lending Investments
1. Diversifying Your Portfolio
Real estate investments are becoming increasingly important as individuals look for ways to diversify their current portfolios. Diversification is a method that most investment strategists recommend because allocating funds to different markets mitigates risk while increasing gain probability. In the past, investors may not have had the assets to add real estate projects to their current holdings. However, marketplace lending allows accredited investors to buy real estate in shares, creating the means for an attainable minimum buy-in. Individuals are not required to invest hundreds of thousands of dollars in order to earn returns. We at Sharestates for example, offer shares at $1,000.
2. Avoid Dipping Into Retirement Funds
Retirees need to find ways of bringing in a stable income without dipping into the savings they have gathered over the years. With marketplace lending, one is able to enter an investment arena that may have been previously closed off. Retirees with IRAs will also find marketplace lending a viable investment option. If you have an account with a self-directed IRA custodian, you will be permitted to use the IRA funds for traditional investments and investments through marketplace lending (MPL).
3. Tax Benefits
Real estate is often a preferred investment strategy over stocks because of the numerous tax advantages. This rule applies to marketplace lending deals as well. MPL investors are able to reap the benefit of the deductions taken on the property. Depreciation and expense deductions offer built-in results to investors by being placed in a tax shelter. These shelters also allow for tax-free use of any distributed cash prior to the sale of the shares or property.
4. Minimum Investments
Many investors may never have envisioned themselves as real estate moguls. Yet, the minimum investment requirement in marketplace lending makes this aspiration possible. Shares of properties with price tags of $1 million or more can be bought into with only thousands of dollars of funds on hand. In fact, some platforms offer accredited investors the chance to purchase shares for as low as $1,000. Moreover, your risk is dramatically reduced since marketplace lending platforms vet all deals before offering shares.
5. Outstanding Returns
Although minimum investments decrease your risk of financial losses, you may be leery over whether you’ll make any money on the crowdfunding opportunities real estate has to offer. The good news is that the returns of real estate investment through marketplace lending are extremely lucrative. In fact, MPL platforms for real estate may pose minimum investment returns that start at an impressive 10%.
As with all of your investment strategies, take the time to research the opportunities available and find the appropriate deals for your budget and end goals. Without a doubt, marketplace lending paves the way for more novice investors to enter the game and earn substantial rewards.