Published on July 24th, 2018 | by Sunit Nandi

Is Crowdfunding Real Estate The Way of the Future?

Real estate has always been a market reserved for those with enough money to get into it, but that looks like it may change at any time, read on to learn more.

Have you ever looked at real estate as one of the best ways to make money but despaired that you don’t have the capital to get started? You’re not alone, and real estate has long been one of the hardest industries to break into if you don’t already have money, so how can anyone else hope to get into it?

With the advent of new technology, the previously impossible tends to become possible, and nothing is different when it comes to real estate development. Crowdfunding real estate development, in particular, seems to be the way of the future, so let’s take a look at the possibilities.

What is Crowdfunding?

Before we move on to our topic for the day, we have to make sure that all our readers are following along, and the best way to do so is to ensure that everyone knows what crowdfunding is. Crowdfunding is a form of initial investment that sources smaller chunks from all of the participants.

In exchange, people who invest in the initiative receive some form of compensation, either in the form of the product itself or royalties from the sale of the product. As you would imagine when it comes to real estate, crowdfunding works more like shares of the property, but let’s look at it in greater detail.

Advantages of Crowdfunding Real Estate Development

Low Buy-in Cost

Of course, the main benefit to crowdfunding in the real estate world is that the high initial investment costs are greatly cut down, finally making real estate an accessible domain. While there are still some bumps to get over, real estate crowdfunding is looking more and more likely to succeed.

A group of investors splitting the profit between them isn’t all that different to a single landlord, though the decision process will become a little more complicated. Luckily, many real estate development crowdfunds have considered this and already have arrangements for the management of the property.

More Decentralized

Instead of having a single landlord who is the king of your domain, you can instead have a group of people who will debate matters between them, usually leading to less authoritarian decisions. As you can see, crowdfunding real estate is not only a positive for the property owners, but also for the inhabitant.

Of course, all of this is dependent on the arrangement between those who are managing the property, so if you’re looking to rent crowdfunded real estate, you should do your research. Find out how the property is run and figure out how the last tenants found the experience before making a hasty decision.

Conclusion

While crowdfunding real estate may sound like a thing of the future, it’s here today, though it may still need some time to develop further. If you’ve always wanted to invest in property, crowdfunding may be able to give you the chance you need.

Tags: crowdfunding, future, real estate

About the Author

Sunit Nandi I'm the leader of Techno FAQ. Also an engineering college student with immense interest in science and technology. Other interests include literature, coin collecting, gardening and photography. Always wish to live life like there's no tomorrow.