(crowdfund insider) -- Real estate crowdfunding platform RealCrowd reports that HNW investors are looking to increase their portfolio of real estate investments during 2019.
According to a survey by the Fintech platform, 53% of surveyed HNW individuals expect to make “two-to-four direct real estate investments in 2019.”
Specific details on the survey process were not revealed.
This is a big improvement over the year prior when just 33% said they made between two and four such investments in 2018, demonstrating a 20% rise year-over-year.
The survey also stated that 47% of respondents’ desire to allocate more than 25% of their investment portfolio to commercial real estate.
RealCrowd says the asset classes they are most attracted to are multifamily, industrial, funds, office, hospitality, and retail.
Property crowdfunding platforms have made the once difficult to access asset class far more manageable. Investors may now go online and visit a variety of real estate marketplaces targeting a diverse range of the investment sector.
Adam Hooper, co-founder and CEO of RealCrowd, said the survey results are indicative of substantially increased interest by HNW investors seeking to diversify their portfolio holdings:
“A healthy number of investors are including real estate as part of their wealth management strategy, and many are increasing their allocations to this industry, which really speaks to its strength. This also shows that their comfort level with investments is still high in the face of a long period of economic expansion.”
RealCrowd’s survey also revealed that 46% of respondents are looking for real estate investments with hold periods of five-to-seven years, while 15% of respondents are looking for investments with hold periods of 10 years or more.
Hooper said this is evidence of a trend for a long term buy and hold strategy:
“The latest Opportunity Zone legislation supports this strategy as well, providing sizable tax benefits on capital gains for holding a real estate asset in an opportunity zone for seven years or longer.”
A majority of respondents (79%) said they invest in real estate assets online through direct investing. 43% said they purchase their own real estate assets and 36% indicated that they purchase their real estate assets offline with partners.
Hooper said the trust in direct real estate investment platforms continues to grow.
Respondents also indicated that they are 3X more likely to invest in real estate when the stock market feels at the top versus at the bottom.
“While investors may not be using the stock market to guide the specifics of their real estate investments, they tend to be more bullish about these investments when there are signs that the economy is doing well, such as when stocks are strong,” stated Hooper. “This indicates that they are looking at factors outside of the stock market to help them choose their real estate investments, a sign of their confidence in the sector as a whole.”