After the unforeseen volatility of 2020, the team at CrowdStreet decided to conduct a survey to understand how individual investors are looking at real estate investing in 2021. With 1,240, respondents, we believe this is the largest ever survey of individual real estate investors. While the macroeconomic recovery timeline is still uncertain, investors told us they are enthusiastic about making online investments in real estate in 2021.
Investor appetite for real estate in 2021
- 96% of surveyed investors plan to add commercial real estate (CRE) to their portfolios this year, beating out both stocks and bonds.
- Investors reported they’re planning to temper their exposure to the stock market–only 31% plan to invest more in stocks and only 7% plan to invest more in bonds. Of those surveyed, 48% actually plan to invest less in bonds.
- Among investors who have never invested in real estate, 95% intend to make their first CRE investment in 2021.
What do investors value in a deal?
- Diversifying their portfolio and preserving wealth or capital were the two main reasons respondents were looking to add CRE to their portfolios.
- Investors reported they also value In commercial real estate, the sponsor is an individual or company in charge of finding, acquiring and managing the real estate property on behalf of the partnership. The sponsor is usually expected to invest anywhere from 5-20% of the total required equity capital. They are then responsible for raising the remaining funds and acquiring and managing the investment property’s day-to-day... More experience over targeted The Internal Rate of Return (IRR) is the rate at which each invested dollar is projected to grow for each period it is invested. It differs from other metrics in that it accounts for the concept of the “time value of money”, or the fact that a dollar received and reinvested elsewhere today is worth more than a dollar expected... More when evaluating a potential opportunity.
What kinds of deals are investors looking for?
- The Southeast was the clear region winner in real estate investing, beating the Midwest and Mountain Region by 13 percentage points.
- The effects of the pandemic showed through in investors’ opinions on their preferred asset classes, with multifamily and industrial topping the most-favored asset classes