Written by Austin Murray

Edited on February 17th, 2024

Alternative assets are a rapidly growing asset class and the consulting firm PwC estimates that this asset class will, “will more than double in size, reaching $21.1 trillion by 2025, accounting for 15% of global AuM.” The alternative asset class – which includes things like fine wine, vintage cars, and private equity – has historically been reserved for millionaires and billionaires. But, luckily for people like me and you, it has gotten much easier to invest in alternative assets over the past decade or so. That said, here’s my list of the best alternative investment apps out there:

• Masterworks: Best for investing in fine art
• Rally: Best for investing in tangible, high-value assets
• Flippa: Best for buying websites or apps
• Vanly: Best for off-the-radar real estate investing
• Vinovest: Best for fine wine and whiskey
• YieldStreet: Best for real estate, private credit, and private equity
• Royalty Exchange: Best for investing in income-producing royalties
• Heron Finance: Best for buying credit deals

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Best Alternative Investment Apps: What is Alternative Investing?

Alternative investing is when you buy less common assets in hopes that they will appreciate in value or earn a return in some way. For reference, “non-alternative” assets include things like stocks and bonds. But, alternative assets could be just about anything, from a rare pokemon card worth more than $5 million dollars, to cryptocurrency, art, luxury watches, etc.

More examples include:

• Private equity
• Real estate (OK, this one is really popular actually. But, it’s still considered an alternative asset for some reason).
• Hedge funds
• Private credit
• Rare whisky
• Art
• Watches
• Coins
• Cars
• Cryptocurrency

Imagine if you were a billionaire who had an immense art collection of Van Goghs, Da Vinci’s, and…other famous artists. You might buy a painting for $20 million and within 5 years discover that the art had surged in value for $30 million. That’s a pretty impressive 50% increase in just 5 years. Not bad! This is a return that almost anyone would take. But, the problem is that not everyone has $20 million to drop on a painting (or, you know…at all). Luckily, new platforms are starting to make alternative investing more readily available to everyday investors.

We Americans seemed to have fallen in love with investing over the past decade. Especially the younger generation. In fact, about 58% of U.S. households owned stocks in 2022. Who’s to say alternative investing isn’t going to be the next major wave of investing in America, replacing index funds? 

Alternative investing is often less conventional and can include a variety of assets. The goal of alternative investing is typically to diversify a portfolio and potentially achieve higher returns or reduce overall risk. I did my research and analyzed 8 alternative investing platforms, so you don’t have to. Let’s get into it.

Masterworks: Best for Investing in Fine Art

What is it:

Masterworks is democratizing the investment market for fine art. Traditionally, fine artwork is only available to the very wealthy. However, by buying and securitizing famous pieces, Masterworks is opening up this asset class to everyone which makes it one of the best alternative investment apps in my book.

How it works: 

1. Selection of Artwork: Masterworks acquires high-value artwork, typically by well-known artists. 
2. Securitization: Masterworks then securitizes the artwork, breaking it down into shares. Investors can then buy these shares. 
3. Returns: When the artwork is sold, investors receive a portion of the proceeds based on their ownership percentage. 
4. Secondary Market: Masterworks has introduced a secondary market where investors can sell their shares to other investors before the artwork is sold.

Potential returns:

Average of 14.1% annually 

Minimum investment:

$10,000

What else you should know: 

1. Risk Factors: Investing in fine art does not come without risk. The art market can be unpredictable, and factors such as economic conditions, art trends, and market demand can impact the performance of art assets.
2. Fees and Costs: Be aware of all fees associated with investing in Masterworks. Masterworks charges a 1.5% annual management fee, plus the company takes 20% of any profits from a sale.
3. Holding Period: Consider your investment time horizon. Masterworks typically plans to sell artworks within a certain period (3 to 10 years).

Rally: Best for Investing in Tangible, High-Value Items 

What is it:

If you loved trading baseball cards as a kid or studying cars, you are going to want to check out Rally. It is a platform that allows investors to buy and sell shares in high-value collectibles such as sports cards, luxury watches, and even the declaration of independence. Similar to Masterworks, high-end collectibles were traditionally only available to the wealthy class. Now anybody can own a piece of a Rolex or a Lambo.  

How it works: 

1. Asset Selection: Rally selects high-value assets such as classic cars, rare watches, sports memorabilia, or other collectibles. 
2. Securitization: Rally purchases the selected asset and holds it in a secure location. The asset is then securitized, meaning it is divided into shares. 
3. Ownership and Dividends: Investors become shareholders in the securitized asset. 
4. Secondary Market: Rally operates a secondary market where investors can trade their shares with other investors. 
5. Exit Opportunities: Rally aims to sell the securitized asset within a specific time frame (typically 3-10 years) or when certain conditions are met.

Potential returns:

Average of 32%

Minimum investment:

Depends on the price of the stock you are buying for a particular asset.

What else you should know: 

1. Limited Control: As a fractional owner, you have limited control over the management and decision-making regarding the underlying asset. Major decisions, including the timing of the sale, are typically determined by the platform and its management.
2. Secondary Market Risks: While Rally provides a secondary market for trading shares, the liquidity of these shares can be limited. The ability to sell your shares at a desired price may depend on market conditions and demand from other investors.
3. Long-Term Perspective: Investing in alternative assets like those on Rally often requires a long-term perspective. Be prepared to hold your investment for the planned holding period, as the potential returns may take time to materialize.

Flippa: Buy/Sell Sites, Stores & Apps

What is it:

If trendy websites that drive traffic and convert visitors into customers are your thing, then look into Flippa. It is an online marketplace that specializes in buying and selling websites, domains, and digital businesses. It provides a platform for businesses to list their online assets for sale, attracting potential buyers who are interested in acquiring established websites. The range of businesses that you can buy on Flippa is what makes it one of the best alternative investment apps.

How it works: 

1. Listing a Property: Sellers can create a listing for their digital asset, providing details such as a description of the website or domain, its niche or industry, revenue and traffic statistics, and any other relevant information. 
2. Auction or Fixed Price: Sellers can choose between an auction-style listing or a fixed-price listing. In an auction, potential buyers place bids, and the highest bidder at the end of the auction wins the item. Fixed-price listings allow sellers to set a specific price, and buyers can purchase the asset at that price without bidding.
3. Escrow Service: Flippa offers an escrow service to secure the transaction. Once a deal is agreed upon, the buyer places the payment into escrow, and the seller transfers the digital asset..
4. Transfer of Assets: After the transaction is completed, the seller transfers ownership of the digital asset to the buyer. This may involve transferring domain registration, website hosting, and any other necessary components.

Potential returns:

Determining the typical rate of return on a website involves evaluating various financial and performance metrics such as: revenue, expenses, initial investment, ROI, conversion rates and traffic. 

Minimum investment:

No Minimum

What else you should know:

1. Ask Questions: Use the communication tools on Flippa to ask the seller questions. Clarify any uncertainties you may have about the website’s operations, revenue streams, and potential challenges.
2. Review Seller Feedback: Check the seller’s feedback and reputation on Flippa. Positive feedback and a history of successful transactions can indicate a trustworthy seller.
3. Highlight Unique Selling Points: If you are selling, clearly outline the unique selling points of your website or digital asset. Showcase what makes it valuable, whether it’s a niche audience, innovative features, or a strong brand presence.

Vanly: Rent Overnight Parking Spaces for RV Travelers

What is it: 

If you’ve experienced campervan or RV living, you’re likely aware of the disparity between traveling and seeing beautiful places and the practical challenges of the lifestyle. That gap, from secure overnight parking to finding amenities, inspired the creation of Vanly. It’s a platform connecting property owners willing to offer parking and facilities for a fee with van and RV travelers seeking safe overnight parking across the US.

How it works:

1. List your spot for free 

2. Respond to and coordinate with guests

3. Get paid

Vanly is a good option for people that are interested in renting on Airbnb but don’t have their own apartment to rent. If you have access to even just a driveway, parking space, front yard, etc. then you can list it on Vanly and enjoy all the same benefits of listing on Airbnb.

Potential returns:

Vanly notes that you can earn more than $1,000 per month by sharing your parking space and amenities with campervan and RV travelers.

Minimum Investment:

Free to list with a 10% transaction fee that goes to Vanly.

What else you should know:

1. Your earnings with Vanly depend on your listing price and booking frequency. 
2. While the platform claims you can earn up to $1,000, few listings are available, and there’s no guarantee of bookings. 
3. Payments are processed through Stripe, with payouts every two weeks. 
4. Listing a space is free, but keep in mind Vanly takes a 10% transaction fee.

Vinovest: Best for Investing in Fine Wine and Whiskey

What is it:

For the wine connoisseurs out there, Vinovest is another one of the best alternative investment apps that lets invest in fine wine. The platform uses technology, data analytics and expert guidance to make investment decisions for users.  This may involve using algorithms and market data to identify promising investment opportunities in the wine market.

How it works:

1. Account Funding: Investors deposit funds into their Vinovest account. 

2. Portfolio Creation: Vinovest uses a combination of data analytics and the expertise of sommeliers to curate a diversified portfolio of fine wines for the investor. The portfolio may include wines from different regions, vintages, and producers.

3. Ownership of Fractional Shares: Investors own fractional shares of the wines in their portfolio. 

4. Storage and Insurance: Vinovest takes care of the logistics, including the storage of the physical wine bottles in professional-grade facilities. The wines are stored under optimal conditions, and insurance is provided to protect against loss or damage.

5. Returns and Dividends: Investors may earn returns through capital appreciation as the value of their wine portfolio increases over time. 

Potential returns:

10.6% annualized returns.  

Minimum investment:

$5,000 minimum 

What else you should know:

1. Costs and Fees: Investors should be aware of the costs and fees associated with using Vinovest. A 2.5% fee is charged when purchasing wine on the Vinovest Marketplace. A 1% fee applies when selling wine to another user on the exchange.
2. Long-Term Commitment: Fine wine investing is often considered a long-term commitment. The value of wine can appreciate over time, and investors may see better returns with a patient and strategic approach to holding their investment.
3. Liquidity: Fine wine is not as liquid as some other traditional investments. Investors should be prepared for potential holding periods before considering selling their wine assets.

YieldStreet: Best for Investing in Real Estate, Private Credit, and Private Equity

What is it: 

Yieldstreet is an online investment app that offers a variety of alternative investment opportunities to accredited investors. The platform focuses on providing access to asset classes that were traditionally reserved for institutional investors or high-net-worth individuals. Yieldstreet aims to democratize investment in areas such as real estate, art, commercial finance, legal finance, and more. 

How it works:

1. Accreditation: Yieldstreet typically caters to accredited investors. Accreditation status is determined based on an investor’s income, net worth, or other qualifying criteria defined by financial regulators.
2. Commitment and Funding: Investors commit to an investment and fund their chosen opportunities. 
3. Investment Management: Yieldstreet manages the investment on behalf of the investors. 
4. Returns and Distributions: Investors may receive returns in the form of interest payments, rental income, or other distributions, depending on the nature of the investment. 

Potential returns:

6.5% annual returns. 

Minimum investment:

$10,000

What else you should know:

1. Investment Horizon: Many alternative investments on YieldStreet have longer time horizons compared to traditional investments. 
2. Fee Structure: Understand the fee structure associated with each investment. The platform charges an annual management fee of 1% of assets under management. 
3. Exit Strategies: Understand the exit strategies available for each investment. Whether through scheduled distributions, sale on secondary markets, or other mechanisms, knowing how and when you can potentially exit an investment on YieldStreet is crucial.

Royalty Exchange: Best for Buying and Selling Rights to Music

What is it:

Can’t live without music? Royalty Exchange allows you to buy and sell music copyrights. For example, on Royalty Exchange, you can buy the rights to things like Empire State of Mind (Jay Z) or the music from the Shrek franchise.

How it works:

1. Listing by Rights Holders: Music rights holders, which can include songwriters, musicians, and producers, list their music royalty assets on the Royalty Exchange platform. 
2. Auction Format: Rights holders set a duration for the auction, and potential investors bid on the royalty assets. The highest bidder at the end of the auction period becomes the new owner of a portion of the future royalty income.
3. Ownership of Fractional Shares: Investors purchase fractional ownership of the music royalties through their winning bids. This allows for broader participation in the potential income generated by the royalties without having to buy the entire rights package.
4. Payment and Distribution: Royalty payments generated by the music assets are distributed to the winning investors based on their ownership percentage.

Potential returns:

Average ROI of 10%

Minimum investment:

$10,000

What else you should know:

1. Understanding Royalty Types: Royalty Exchange deals with various types of music royalties, including performance royalties, mechanical royalties, and streaming royalties. 
2. Duration of Royalty Streams: Some royalties may have a fixed term, while others may be perpetual. Consider how the duration aligns with your investment goals and time horizon.
3. Platform Fees: Be aware of the fees associated with using the Royalty Exchange platform. Buyers pay 1% of the final auction or purchase price. Sellers are also subject to fees, though an exact amount is not explicitly specified.

Heron Finance: Best for Buying Credit Deals

What is it: 

For too long, private credit investments were primarily reserved for institutions and the ultra-wealthy. That’s unfortunate, because this asset class has historically produced higher returns than stocks, with the consistent cash flows of bonds. Heron Finance was built to disrupt the status quo and help individual accredited investors access private credit deals.

How it works:

1. Accredited investors answer questions about their investment objectives and risk tolerance. Then a robo-adviser presents them with possible portfolios of private credit deals to choose from.
2. Interest payments accrue and can be automatically reinvested.
3. APY can be expected in the range of 11% to 16%.

Potential returns:

11% to 16%

Minimum investment:

$100 and you have to be an accredited investor. 

What else you should know:

1. Understanding Private Credit: If you don’t have background knowledge of private credit loans, be sure to do some research before investing. Private credit involves lending money directly to companies, often those that may not have access to traditional bank loans or capital markets. Investors, in return, receive interest payments on the loans.
2. Leverage: Some private credit funds may use leverage to enhance returns. Be aware of the use of leverage and how it may amplify both gains and losses.
3. Fees and Expenses: Understand the fee structure on Heron Finance. The only fee they charge is a 2% AUM.

I hope that you’ve found this article valuable when it comes to learning about some of the best alternative investment apps. Be sure to subscribe below if you’re interested in learning more about how you can invest your money.

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