Real estate investing is one of the most popular options for investors who want to diversify their portfolios since it has the potential to provide consistent monthly income. However, real estate investing has traditionally required tens or even hundreds of thousands of dollars to get started.
HappyNest is among the growing cohort of investment platforms breaking that mold, allowing you to invest in real estate for very little money. This HappyNest review will show you how to start investing with this platform for as little as $10.
Start a real estate portfolio with just $10.
- Invest by rounding up everyday purchases
- Own high-quality commercial real estate
- Earn income from Fortune 100 tenants
- What is HappyNest?
- How does HappyNest work?
- HappyNest features
- HappyNest pricing
- Who can use HappyNest?
- How much can you earn with HappyNest?
- Maximizing your earnings with HappyNest
- How to stay safe with HappyNest
- FAQs about HappyNest
- How to sign up for HappyNest
- Other platforms to consider
- Bottom line
What is HappyNest?
HappyNest is a real estate investing app that allows you to invest in shares of commercial real estate for as little as $10. The company is a public non-traded real estate investment trust (REIT) of commercial real estate investments. These properties are leased to Fortune 100 companies, including CVS and FedEx.
The New York City-based company was formed in February 2017 by Jesse Prince and Leonardo Sessa. Prince founded the service, after serving in the military, to make real estate investing accessible to his fellow servicemen and women. However, the concept was later expanded to accommodate anyone who wanted to invest in real estate.
HappyNest invests in single-tenant commercial properties with long-term leases from creditworthy tenants. This helps reduce the risk for investors while providing strong, stable returns.
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How does HappyNest work?
HappyNest is relatively simple to use, in part because it only offers a single REIT in terms of investment options. To get started, you will have to download the HappyNest app for iOS or Android. Currently, you can only manage your account on the mobile app; it’s not possible to manage your account online.
The next step is to link your bank account. You can do that either by logging into your bank account via Plaid, which gives HappyNest access, or by using your routing and account numbers to allow HappyNest to verify your account. The latter option may take one to two business days.
At the moment, linking a bank account is the only way to fund your HappyNest account. Once your bank account is linked, you’re ready to start using HappyNest.
Once you make your initial investment of $10, HappyNest’s Auto-Invest feature lets you set up weekly or monthly deposits of any amount you choose, up to $10,000 per transaction. If you take advantage of this feature, HappyNest could set you up to earn a passive income from real estate. Just choose how much you want to invest automatically on a weekly or monthly basis, and you’re all set.
HappyNest’s Loose Change feature will round up your purchases to the nearest dollar and then deposit it into your HappyNest account once you’ve reached a $5 Loose Change balance. While you can only fund your HappyNest account manually or with Auto-Invest using ACH bank transfers, Loose Change lets you add funds with a linked credit card.
You can set an investment goal (called a Nest Egg), which will help the app guide you in using some of its other features. For instance, you can say you’d like to save $50 per month for 10 years. The app will then calculate your projected returns in that time based on your investment of $50 per month over 10 years.
HappyNest charges no platform fees or brokerage commissions, but investments are subject to the following fees:
- Management fee of 0.0417% per month, or about 0.50% per year
- 3% acquisition fee for new real estate properties
HappyNest is owned and licensed by HappyNest Holdings LLC, which is defined as its Sponsor. As a result, the Sponsor is entitled to charge an administrative fee of $1 per month to its shareholders. However, no sponsor fees have been collected thus far.
In general, management fees do not appear as separate fees, and you likely won’t see them in your account activity. Instead, they simply reduce the amount paid out to each investor.
Who can use HappyNest?
Anyone who is a U.S. citizen aged 18 years or older can use HappyNest. Both accredited and non-accredited investors are welcome to use the service. The service can be used in all U.S. states and territories except for Arizona, North Dakota, and the U.S. Virgin Islands.
HappyNest could be a smart option if you are just learning how to invest in real estate and don’t want to purchase or manage properties yourself. Once you link your bank account, the only other step is to transfer money into your HappyNest account. If you turn the auto-invest or round-up features on, your investments can be fully automated, requiring little to no maintenance on your part.
How much can you earn with HappyNest?
HappyNest aims for a 6% dividend yield (the amount of money you earn by owning shares of its investments) which it pays out quarterly. It also plans to pay out dividends more frequently as the fund stabilizes depending on market conditions, recent investments or sales, and cash flow.
You can also earn a one-time referral bonus for each qualified referral you make to the service, capped at $150 per account holder. The bonus is in the form of "HappyNest Bucks," and is not redeemable for cash, other than redemption in relation to investment dividends. The qualified account must be open for a minimum of six months before the bonus is awarded to the referrer.
HappyNest displays your next projected dividend payout in the Estimated Dividend section of the app.
REITs are required by law to distribute at least 90% of their taxable income to their shareholders. HappyNest, however, has pledged to pay 100% of its annual net income in the form of quarterly dividends to its shareholders. Note that this doesn’t account for any fees the service may charge its investors.
Maximizing your earnings with HappyNest
Unlike some of its competitors, HappyNest only has one portfolio, so your options for maximizing your earnings are limited. However, there are still a couple of steps you can take to optimize your investments.
- Stay invested for at least three years. In order to encourage long-term investors, HappyNest will charge you a fee if you sell your shares before three years. The fee starts at 3% if you have had your shares for six months to a year and drops by 1% for each of the next two years. After the third year, you can sell without being charged a penalty.
- Turn on Auto-Invest and Loose Change. Strictly speaking, these features won’t allow you to earn more than you would if you had manually invested the same amounts. But it’s easy to forget to invest regularly, and automating your investments could help your portfolio continue to grow.
How to stay safe with HappyNest
HappyNest’s strategy is long-term real estate investing, targeting a 6% return. The company aims to achieve that by investing money in commercial real estate occupied by well-established companies, such as FedEx and CVS. Its current portfolio has properties with an average lease term of 10 years.
In terms of keeping your investments safe, remember that returns are not guaranteed. As with all investments, you assume a certain level of risk in exchange for the dividends you receive. Hence, it’s best not to invest too much of your money in one place. Adding other forms of investment, such as S&P; 500 index funds and bonds, for example, will allow you to diversify your portfolio.
FAQs about HappyNest
Is HappyNest safe?
HappyNest uses secure servers and never stores your bank information to prevent unnecessary data breaches. Plus, it has features such as email verification, automatic logouts, biometrics, and 256-bit encryption to help you manage your account securely.
Is HappyNest free?
HappyNest is free in that it charges no platform fees or broker commissions. However, the company pays a 0.0417% monthly asset management fee to their advisor as well as a 3% acquisition fee for each property. You are not actually charged for these fees, but they will reduce the returns on your investment.
What are the benefits of HappyNest?
The biggest benefits of HappyNest are its simplicity and its low minimum investment amount. Anyone can invest $10 into the app and potentially start earning dividends. The platform also lets you invest in real estate without having to actually own or manage any properties directly.
How to sign up for HappyNest
To get started, you will need the app, which you can download on the Apple App Store or Google Play. You create your account directly in the app, where you’ll have to provide some basic information, including your name, address, and Social Security number.
Other platforms to consider
Real estate investing platforms with low minimums are becoming more common these days, and that means there are a few alternatives to HappyNest you might also consider.
- Fundrise: Fundrise is a real estate investment platform that also has a $10 minimum investment. However, it differs in that it offers six different portfolios and invests in a combination of single-family rentals, apartment complexes, and commercial real estate. As with HappyNest, non-accredited investors can invest with Fundrise.
- RealtyMogul: RealtyMogul comes with a higher minimum investment of $1,000. It offers two different REITs: one for growth and one for income. Management fees are generally 1% to 1.25%, and the platform is also open to non-accredited investors.
- DiversyFund: DiversyFund is a real estate investing platform that allows you to invest in multifamily homes. The minimum investment is $500, and non-accredited investors are also welcome to join. However, the 2% management fee is higher than some other REIT investing platforms.
HappyNest offers a simple way for beginner real estate investors to get started with a minimum of just $10. It currently only offers one investment portfolio, which means you won’t have to think too much about how to invest your money. Plus, it has features like auto-investments and round-ups, which make it easier to invest using the platform.
While there are no platform fees, HapyNest will deduct its 0.0417% monthly asset management fee and a 3% acquisition fee from your earnings. Its management fees are lower than both those of RealtyMogul and DiversyFund. However, its acquisition fee is on par with DiversyFund, which charges between 1% to 4% and higher than RealtyMogul’s 2% acquisition fee. Plus, if you redeem your shares before three years, you’ll be charged additional fees.
Before you take the plunge, you can read our article on REIT investing.