With an increasing number of investors turning to property as a stable asset class, reviews and analysis of property investment platforms have become invaluable resources. Stake is one of the leading property crowdfunding platforms, allowing investors to invest in fractional shares of rental properties. This article provides a comprehensive review of Stake, analyzing its key features, fees, risks and returns to serve as a guide for property investors looking to diversify their portfolios.
Stake offers fractional property investment with low minimums
One of Stake’s biggest value propositions is providing fractional property investment opportunities, allowing investors to buy shares of properties typically valued at $100k-$2 million for minimum investments between $100-$1,000. This enables smaller investors to access commercial real estate previously only available to high net worth individuals and institutions. Stake currently lists over 150 properties across major metropolitan markets, focusing on long-term rental properties like multifamily units, giving investors stable income via rental cash flow distributions.
An end-to-end digital investment platform with reasonable fees
As a fully online real estate crowdfunding platform, Stake provides a streamlined end-to-end investment process including browsing investment opportunities, executing transactions, and managing portfolios. The all-in management fee ranges from 0.75% to 1.25% depending on portfolio size, competitive among similar platforms. There are no asset management or performance fees.
Income stability but lower liquidity than public REITs
Stake investments provide stable cash flow via monthly or quarterly distributions, but have lower liquidity than publicly traded REITs given the private nature of the properties. However, Stake does facilitate private secondary sales to provide some liquidity. When profits are realized upon property sales or refinancing, investors get distribution of capital gains minus fees.
Lower risk profile but returns lag direct ownership
The risk profile of Stake investments is lower compared to owning property directly, benefitting from diversification across multiple properties and professional management. However, returns also lag direct ownership, with targeted returns around 6% – 10% for Stake investments, underperforming average total returns of private direct real estate equity around 12% – 15%.
Overall, Stake provides a solid option for passive real estate investment and income for investors wanting fractional, digital property investment exposure. Though returns are lower than direct ownership, the ease of use, fractional shares, low minimums and diversification make it worthwhile for novice investors or those with limited capital.