Real estate crowdfunding: A new way to invest
Real estate has always been a popular investment, but not everyone has the money to purchase a property outright. Crowdfunding has opened up a new avenue for investors by allowing them to pool their money together to invest in real estate.
Real estate crowdfunding is a relatively new concept that has gained traction in recent years. It provides a way for investors to get involved in the real estate market without the large capital requirements typically associated with property ownership.
One of the benefits of real estate crowdfunding is the ability to diversify your investment portfolio. Investors can spread their money across multiple properties, helping to reduce risks associated with investing in a single property. This is particularly appealing since it allows investors to get involved in real estate without having to purchase an entire property on their own.
Another benefit of real estate crowdfunding is the potential for high returns. According to a study conducted by the University of Cambridge, real estate crowdfunding platforms have the potential to deliver returns of up to 20 percent per year. This is a far greater return than traditional investment opportunities, such as stocks and bonds.
Real estate crowdfunding also eliminates some of the hassles of owning a property, such as maintenance and property management. The crowdfunding platform takes care of these issues, leaving investors free to focus on making profitable real estate investments.
Investors interested in real estate crowdfunding should start by researching different platforms. There are many platforms available, each with its own unique investment opportunities. Investors should also carefully consider the platform's fees and investment minimums.
Platforms typically charge fees ranging from 0.5 to 2 percent of the total investment amount. Investment minimums can vary greatly, with some platforms requiring a minimum investment of a few thousand dollars, while others require a minimum investment of hundreds of thousands of dollars. Investors should ensure that they are comfortable with the investment minimums before committing any money.
Investors should also carefully vet the properties they are investing in. Many crowdfunding platforms provide detailed information about each property, including location, investment potential, and expected returns. Investors should carefully review this information to ensure that the property fits their investment goals and risk tolerance.
In conclusion, real estate crowdfunding is an exciting new way to invest in the real estate market. It provides investors with an opportunity to diversify their portfolio, potentially earn high returns, and eliminate the hassles of property ownership. By carefully researching platforms and properties, investors can take advantage of this new investment opportunity.
Sources:
https://www.forbes.com/sites/forbesrealestatecouncil/2019/11/07/is-crowdfunding-right-for-real-estate-investors/?sh=1dfde7523f29
https://www.investopedia.com/terms/r/real-estate-crowdfunding.asp
https://www.investorschronicle.co.uk/funds-etfs/2018/12/13/real-estate-crowdfunding-the-new-kid-on-the-block/
https://www.isaca.org/resources/isaca-journal/issues/2019/volume-6/crowdfunding-real-estate-investments-a-new-standard-for-asset-ownership-and-management