Real Estate Investment Platforms Rating Methodology
We believe in transparency and objectivity, this is why we want you to know how we rate real estate investment platforms
Real estate investment platforms (aka real estate crowdfunding sites) pair developers and other real estate firms with investors looking for real estate exposure in their portfolios. These platforms come in different forms depending on the customers they want to serve.
Some platforms require investors to be accredited, others don’t. Some have honorous minimum investment requirements while others only require $10 to get started.
We have taken into account eight important factors into consideration. Each factor is weighted depending on how essential that factor is for the proper functionality of the real estate investment platform.
- Account minimum (Weight 15%)
- Account and investment fees (Weight 15%)
- Investment selection (Weight 20%)
- Liquidity (Weight 10%)
- Features and tools (Weight 15%)
- Ease of use (Weight 5%)
- Security (Weight 5%)
- Customer support (Weight 10%)
Account Minimum (Weight 15%)
This refers to the minimum account balance required to open an account. The less amount of money required to open an account will have a higher rating, whereas a high amount of money required to open an account will have a lower rating.
Account and Investment Fees (Weight 15%)
Account and investment fees refer to the fees required to maintain your account and invest in real estate investment opportunities. In general, the higher the fees, the lower the rating for this factor will be. These fees include but are not limited to;
- Annual fees
- Asset management fees
- Advisory fees
- Origination fees
- Early redemption fees
- SDIRA fees
- Acquisition fees
- Disposition fees
- Refinance fees
- Project management fees
- Construction management fees
Investment Selection (Weight 20%)
This factor refers to the variety of investment options at the users’ disposal, as well as the level of diversification those investments offer. The more investment opportunities with wider diversification (i.e., geographical area and project type), the higher the rating for this category will be. On the contrary, if a platform only offers one option to investors and its diversification is limited due to location and project type, then it will earn the lowest rating.
Liquidity (Weight 10%)
Real estate investments can be illiquid and may require investors to lock up their funds for a number of years. This factor considers how long a lock-up period is, as well as the options and fees the platform offers to its users in case they want to sell their investment ahead of the lock-up period. The higher rating will be awarded to the platform that offers a variety of redemption options (i.e., secondary market, repurchase program, etc.) with the lowest redemption fees.
Features and Tools (Weight 15%)
This factor refers to the added features and tools an investment platform makes available to its customers. The more features a real estate investment platform offers, the higher the ratings will be. Some of the features and tools we consider include:
- Range of offerings (i.e., debt, equity, preferred equity, etc.)
- Range of investments (i.e., commercial, industrial, residential, multi-family, etc.)
- Frequency of distributions
- Regions served
- Availability of a secondary market
- Investor accreditation requirements
- SDIRA options
- 1031 exchange
- Dividend reinvestment options
Ease of Use (Weight 5%)
This refers to how easy a platform is to use for beginner investors. The easier a platform is to use, the higher the rating for this factor will be. We take into consideration the following factors:
- Availability of web applications
- Availability of mobile applications (iOS and Android apps)
- Overall usability and ease of use of user interface of all portals
Security (Weight 5%)
When it comes to security, we take into consideration a number of factors. The real estate investment platform that offers the following security features will have the highest ratings:
- Provider transparency (i.e., properly disclosing risks involved for each investment opportunity, disclosing how deals are vetted, disclosing how investors earn returns, properly disclosing all fees, etc.)
- Protection of customer data
- Encryption for web and mobile platforms
- Two-factor authentication for web and mobile platforms
- Biometric login for mobile apps
Cryptocurrency platforms reviews are performed annually; however, our team of writers and editors will make updates to the content throughout the year and as necessary to keep our reviews up to date. We also maintain contact with service and product providers to keep the information as current as possible.
Our editorial team oversees all product reviews and follows strict editorial guidelines to ensure we remain objective with our reviews. You can learn more about our editorial team on our about us page and learn how we make money because we like being transparent with our readers.
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