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Is It Smart to Invest in Real Estate Through Online Platforms?

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Man learning how to Invest in real estate online
Man learning how to Invest in real estate online

Real estate investments can diversify a portfolio, but managing properties can be time-consuming. You might prefer to invest in real estate online as an alternative to owning property directly. Some of the options for online real estate investing include crowdfunding, real estate investment trusts (REIT) and real estate exchange-traded funds (ETFs). Each one can offer advantages to investors who are ready to venture into real estate. Talking to a financial advisor can help you develop an investment strategy that’s tailored to your goals.

Why Invest in Real Estate Online?

Real estate is a unique asset class, as it tends to fare well during periods of high inflation and, in some instances, recessions. When consumer prices rise, rental rates tend to follow suit. Meanwhile, certain types of property, including multi-family homes, student housing and farmland, can remain profitable during economic downturns.

Owning real estate also lends some tax advantages in the form of deductions for eligible expenses and deferral of capital gains tax. There’s a trade-off, however, since owning rental properties or investing in fix-and-flip properties typically requires investors to be hands-on to some degree.

Investing in real estate online might appeal to investors who want to forego direct property ownership. Here are some of the benefits of online real estate investing:

  • Potential for above-average returns
  • Lower points of entry
  • No need to borrow
  • Diversification and protection against inflation
  • Ability to spread funds over multiple property investments
  • Access to a broad range of property types

Online real estate investing still involves risk and it may not be suitable for every investor. However, there are some good reasons to consider investing in real estate online as an alternative to purchasing a rental property or becoming a house flipper. If you’re interested in online real estate investing, the next step is deciding how you’d like to do it.

Online Investing With Real Estate Crowdfunding

Man investing in real estate onlineMan investing in real estate online
Man investing in real estate online

Real estate crowdfunding platforms allow multiple investors to pool their money together to fund property investments. There are numerous crowdfunding platforms that offer access to real estate. Some of the most recognizable names include CrowdStreet, RealtyMogul and Fundrise.

Each platform has its own rules and requirements for who can invest and what types of property investments you can make. Some crowdfunding platforms limit access to accredited investors only, while others allow anyone to invest. To qualify as an accredited investor, you must:

  • Have a net worth exceeding $1 million, excluding your primary residence OR
  • Have more than $200,000 in earned income for the past two calendar years ($300,000 for married couples) with the expectation of the same earnings in future years

Financial professionals can also be categorized as accredited investors if they hold a Series 7, 65 or 82 license.

In terms of the kinds of real estate investments offered, it depends on the platform you’re using. Some crowdfunding platforms specialize in a particular niche, such as self-storage properties or apartment buildings. Others might offer access to a varied mix of investments that can include office buildings, multi-family homes and retail space.

There’s typically a minimum investment requirement which may range anywhere from $1,000 to $100,000 or more. Lower minimums can make crowdfunding attractive to investors who don’t have thousands of tens of thousands of dollars to sink into a single deal.

When comparing crowdfunding platforms, it’s helpful to consider the range of investments offered, the minimum investment for each one and the projected return. It’s also important to weigh up the fees that you’ll pay and the holding period of each investment, as real estate crowdfunding can be fairly illiquid.

Use REITs to Invest in Real Estate Online

Real estate investment trusts (REITs) are another option for investing in real estate online. REITs are legal entities that own income-producing properties, such as warehouses, retail space or multi-family housing. Publicly traded REITs are available to any investor, while private REITs are accessible to accredited investors.

What’s the benefit of investing in REITs? Passive income is the answer. REITs are required to pay out 90% of taxable profits to their shareholders as dividends. Investors get the income benefits of real estate without the headaches that go along with owning property.

The criteria for choosing REITs to invest in are similar to choosing a real estate crowdfunding platform. It’s helpful to look at what the REIT invests in, how much of a dividend it typically pays out to shareholders and any fees you might pay to invest. You may also want to consider how easily you’ll be able to sell your shares should you decide to move on from a REIT investment, as some are more liquid than others.

Consider Real Estate ETFs

Exchange-traded funds are mutual funds that trade on an exchange like a stock. ETFs can offer access to a basket of investments, including real estate, allowing for easier diversification. You can “own” multiple property types through a single ETF versus having to tie money up into individual properties.

Investing in real estate with ETFs has some advantages, as they tend to be more tax-efficient than other types of mutual funds. You may pay lower expense ratios as well, depending on which fund you’re investing in.

When comparing real estate ETFs, it’s a good idea to start with the investments themselves. Specifically, consider the type of properties you’ll have access to, what kind of returns those properties are likely to generate and the associated risks of each one. You’ll also want to look at the minimum investment required and the fund’s fees.

What’s the Best Way to Invest in Real Estate Online?

Looking for real estate to invest in onlineLooking for real estate to invest in online
Looking for real estate to invest in online

The best approach for online real estate investing can depend on several factors, including the types of properties you’re interested in, the amount you have available to invest, your risk tolerance and your preferred timeline for making an exit from property investments.

Real estate crowdfunding is notable for making deals that would ordinarily be the domain of higher-net-worth investors available to a broader audience. As mentioned, it’s possible to find investments with relatively low entry points. The trade-off, however, is that crowdfunding tends to require a longer holding period, which may last anywhere from three to 10 years.

REITs, on the other hand, might be suited to investors who are looking to collect steady income from dividends. Again, liquidity is a key concern as some REITs may be easier to sell than others. Real estate ETFs, meanwhile, may offer the highest level of liquidity with the lowest overall cost, though it’s important to consider the kind of returns you might be able to generate.

Bottom Line

Investing in real estate can help you to balance risk in your portfolio while creating an inflationary hedge. Should you decide to invest in real estate online, there are several possibilities for doing so. Considering your goals and risk tolerance can help you to decide which one might be right for you.

Mortgage Tips

  • Consider talking to your financial advisor about the benefits of real estate investments and how you might use them to diversify your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • If you’re considering adding real estate to your portfolio, your financial advisor can help you decide on the right asset allocation. While real estate investments, either online or offline, can provide some protection against inflation and recessions, they’re not entirely risk-free. Your advisor can look at your portfolio as a whole, as well as your age and risk tolerance, to help you decide how much of your holdings to allocate to real estate.

Photo credit: ©iStock.com/golero, ©iStock.com/uchar, ©iStock.com/wichayada suwanachun

 

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Investment regulator imposed $14M in enforcement penalties in latest fiscal year

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TORONTO — Canada’s investment product regulator says it imposed more than $14 million in fines and other financial enforcements in its last fiscal year.

The Canadian Investment Regulatory Organization (CIRO) says the total also includes imposed costs and the forced return of ill-gotten profits.

The regulator says it also ordered suspensions and permanent prohibitions in a significant proportion of proceedings against individuals.

Enforcement efforts included a $2 million fine against Fortrade Canada for recommending a high-risk product to unsophisticated retail clients, and a $1.7 million fine and permanent ban on securities-related business against Paul Walker for a range of misconduct including soliciting more than $1.5 million in investments for an outside business activity.

CIRO was created at the start of 2023 through a combination of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada.

The new self-regulatory organization says it is focused on harmonizing its regulatory approach to create more consistency and timeliness with enforcement action.

This report by The Canadian Press was first published July 16, 2024.

The Canadian Press

 

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Conditions on Simandou investment now satisfied

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LONDON, July 15, 2024–(BUSINESS WIRE)–All conditions have now been satisfied for Rio Tinto’s investment to develop the Simandou high-grade iron ore deposit in Guinea, including the completion of necessary Guinean and Chinese regulatory approvals. The transaction is expected to complete during the week of 15 July 2024.

Along with the recent approval by the Board of Simfer1, this allows Simfer to invest in and fund its share of co-developed rail and port infrastructure being progressed in partnership with Winning Consortium Simandou2 (WCS), Baowu and the Republic of Guinea.

More than 600 kilometres of new multi-use trans-Guinean railway together with port facilities will allow the export of up to 120 million tonnes per year of mined iron ore by Simfer and WCS from their respective Simandou mining concessions in the southeast of the country3. Together, this will be the largest greenfield integrated mine and infrastructure investment in Africa.

Rio Tinto Executive Committee lead for Guinea and Copper Chief Executive Bold Baatar said: “We thank the Government of Guinea, Chinalco, Baowu and WCS for their partnership in reaching this milestone towards developing the world class Simandou project.

“Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto’s portfolio for the decarbonisation of the steel industry, along with trans-Guinean rail and port infrastructure that can make a significant contribution to the country’s economic development.”

Under the terms of the transaction, Simfer will acquire a participation in the WCS project companies constructing rail and port infrastructure, commit to perform a portion of the construction works itself and commit to funding its share of the overall co-developed infrastructure cost, in an aggregate amount of approximately $6.5 billion (Rio Tinto share approximately $3.5 billion)4.

Chalco Iron Ore Holdings Ltd (CIOH) has now paid its share of capital expenditures incurred or required by Simfer to progress critical works up to completion. A first payment of approximately $410 million, for expenditures until the end of 2023, was made on 28 June 2024, and a second payment of approximately $575 million, for 2024 expenditures, was made on 11 July 2024. These amounts settle all expenditures incurred up to date.

The co-developed infrastructure capacity and associated cost will be shared equally between Simfer, which will develop, own and operate a 60 million tonne per year5 mine in blocks 3 and 4 of the Simandou Project, and WCS, which is developing blocks 1 and 2.

Under the co-development arrangement, Simfer and WCS will deliver separate infrastructure scopes to leverage expertise. Simfer will construct the approximately 70 kilometre Simfer spur rail line and a 60 million tonne per year transhipment vessel (TSV) port, while WCS will construct the dual track approximately 536 kilometre main rail line, the approximately 16 kilometre WCS spur rail line and a 60 million tonne per year barge port.

Once complete, all co-developed infrastructure and rolling stock will be transferred to and operated by the Compagnie du Transguinéen (CTG) joint venture, in which Simfer and WCS each hold a 42.5% equity stake and the Guinean State a 15% equity stake6.

First production from the Simfer mine is expected in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year5 (27 million tonnes Rio Tinto share). The mine will initially deliver a single fines product before transitioning to a dual fines product of blast furnace and direct reduction ready ore.

Simfer’s capital funding requirement for the Simandou project as a whole is estimated to be approximately $11.6 billion, of which Rio Tinto’s share is approximately $6.2 billion, broken down as follows.

US dollars in billions (nominal terms) Simfer

capex

  Rio Tinto
share
Mine and TSVs, owned and operated by Simfer
Development of an initial 60Mt/a mine at Simandou South (blocks 3 & 4), to be constructed by Simfer $5.1 $2.7
Co-developed infrastructure, owned and operated by CTG once complete
Simfer scope (funded 100% by Simfer during construction)

Rail: a 70 km rail-spur from Simfer mine to the mainline, including rolling stock
Port: construction of a 60Mt/a TSV port

$3.5 $1.9
WCS scope (funded 34% by Simfer during construction)

Port and rail infrastructure including an approximately 552 km trans-Guinean heavy haul rail system, comprised of a 536 km mainline and a 16 km WCS rail spur

$3.0 $1.6
Total capital expenditure (nominal terms) $11.6 $6.27

Rio Tinto’s share of expected capital investment remaining to be spent from 1 January 2024 is to be $5.7 billion. Rio Tinto’s expected funding requirements for 2024 and 2025 are included in its share of capital investment guidance for this period, with project funding expected to extend beyond this timeframe.

Further details on the Simandou project can be found in the 2023 Investor Seminar presentation at https://www.riotinto.com/en/invest/investor-seminars.

As Chinalco, Baowu, China Rail Construction Corporation and China Harbour Engineering Company are Chinese state-owned entities, and given Chinalco indirectly holds 11.2% of shares in the Rio Tinto Group, they, and WCS, may be considered to be associates of a related party of Rio Tinto for the purpose of the UK Listing Rules. Rio Tinto’s funding commitment pursuant to the infrastructure co-development arrangement (Rio Tinto share $3.5bn) is a smaller related party transaction for the purposes of Listing Rule 11.1.10R and this announcement is, therefore, made in accordance with Listing Rule 11.1.10R(2)(c).

___________________________
1 Approval has been granted by the Board of Simfer Jersey Limited, a joint venture between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings Ltd (CIOH) (47%), a Chinalco-led joint venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%)). Simfer Infraco Guinée S.A.U. will deliver Simfer Jersey’s scope of the co-developed rail and port infrastructure, and is, on the date of this notice, a wholly-owned indirect subsidiary of Simfer Jersey Limited, but will be co-owned by the Guinean State (15%) after closing of the co-development arrangements. Simfer S.A. is the holder of the mining concession covering Simandou Blocks 3 & 4, and is owned by the Guinean State (15%) and Simfer Jersey Limited (85%).
2 WCS is the holder of Simandou North Blocks 1 & 2 (with the Government of Guinea holding a 15% interest in the mining vehicle and WCS holding 85%) and associated infrastructure. WCS was originally held by WCS Holdings, a consortium of Singaporean company, Winning International Group (50%) and Weiqiao Aluminium (part of the China Hongqiao Group) (50%). On 19 June 2024, Baowu Resources completed the acquisition of a 49% share of WCS mine and infrastructure projects with WCS Holdings holding the remaining 51%. In the case of the mine, Baowu also has an option to increase to 51% during operations. After Closing, Simfer will hold 34% of the shares in the WCS infrastructure entities during construction with WCS holding the remaining 66%.
3 WCS holds the mining concession for Blocks 1 and 2, while Simfer S.A. holds the mining concession for blocks 3 and 4. Simfer and WCS will independently develop their mines.
4 A true-up mechanism will apply between Simfer and WCS to equalise most of their costs of constructing the co-developed rail and port infrastructure. The figures shown here are pre-equalisation.
5 The estimated annualised capacity of approximately 60 million dry tonnes per annum iron ore for the Simandou life of mine schedule was previously reported in a release to the Australian Securities Exchange dated 6 December 2023 titled “Simandou iron ore project update“. Rio Tinto confirms that all material assumptions underpinning that production target continue to apply and have not materially changed.
6 Ownership of the rail and port infrastructure will transfer from CTG to the Guinean State after a 35 year Operations Period, with Simfer retaining access rights on a non-discriminatory basis and at least equivalent to all Third Party Users.
7 By the end of 2023, Rio Tinto spent $0.5 billion (Rio Tinto share) to progress critical path works. Rio Tinto’s share of expected capital investment remaining to be spent from 1 January 2024 was $5.7 billion.

This announcement is authorised for release to the market by Andy Hodges, Rio Tinto’s Group Company Secretary.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240621382292/en/

Contacts

Please direct all enquiries to media.enquiries@riotinto.com

Media Relations,
United Kingdom
Matthew Klar
M +44 7796 630 637
David Outhwaite
M +44 7787 597 493

Media Relations,
Australia

Matt Chambers
M +61 433 525 739
Jesse Riseborough
M +61 436 653 412
Alyesha Anderson
M +61 434 868 118
Michelle Lee
M +61 458 609 322

Media Relations,
Americas

Simon Letendre
M +1 514 796 4973
Malika Cherry
M +1 418 592 7293
Vanessa Damha
M +1 514 715 2152

Investor Relations,
United Kingdom
David Ovington
M +44 7920 010 978
Laura Brooks
M +44 7826 942 797

Investor Relations,
Australia

Tom Gallop
M +61 439 353 948
Amar Jambaa
M +61 472 865 948

Rio Tinto plc
6 St James’s Square
London SW1Y 4AD
United Kingdom
T +44 20 7781 2000
Registered in England
No. 719885

Rio Tinto Limited
Level 43, 120 Collins Street
Melbourne 3000
Australia
T +61 3 9283 3333
Registered in Australia
ABN 96 004 458 404

riotinto.com

Category: Simandou

 

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BlackRock Pulls Ad Featuring Trump Rally Shooter Thomas Matthew Crooks

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A screengrab of Thomas Crooks from the BlackRock ad that aired in 2022.

Thomas Matthew Crooks, the 20-year-old who shot at former president Donald Trump at a rally in Pennsylvania, had briefly appeared in a 2022 advertisement for BlackRock Inc, the world’s largest money manager.

The ad, filmed at the Bethel Park High School in Pennsylvania, featured Crooks and several other unpaid students in the background, said the investment giant in a statement. Crooks graduated from the school in 2022.

BlackRock said it has pulled the ad but the video will be available to authorities. The ad, however, is being widely shared by social media users.

“The assassination attempt on former President Trump is abhorrent. We’re thankful former President Trump wasn’t seriously injured, and thinking about all the innocent bystanders and victims of this awful act, especially the person who was killed,” the company added in its statement.

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BlackRock, whose earnings figures are expected today, has faced scrutiny after shooting incidents since some of its index funds own shares in gunmakers.

Trump Assassination Attempt

Trump survived an assassination attempt on Saturday after a gunman opened fire at him at a rally in Pennsylvania ahead of the Presidential elections. The attack left him with a bloodied face as the former president said the bullet pierced his “upper part of right ear”.

Latest and Breaking News on NDTV

A bystander died in the attack while shielding his family and Crooks – a registered Republican – was shot dead by a Secret Service sniper.

Trump, whose Republican candidature will be finalised today, shared a message of unity after the attack and said Americans must not allow “evil to win”. “It was God alone who prevented the unthinkable from happening,” he said on social media.

Biden, too, appealed to the nation to “lower the political temperature” in a rare Oval Office address. “Politics must never be a literal battlefield, God forbid a killing field,” he said.

The US markets are expecting Trump trades to gain momentum after the attack. It has already been pinning hopes for the return of Republicans, especially after Biden’s poor performance in last month’s debate. Those trades are likely to take deeper hold as the attack sparks a wave of sympathy and support for Trump.

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