Crowdfunding for real estate is fast becoming one of the most popular applications of the crowdfunding revolution. Unlike other areas of the new sharing economy (e.g. donations-based crowdfunding or ride-sharing), investing via Real Estate Crowdfunding is one of the only versions of the democratized economy that allows regular people to access a previously exclusive part of the financial sector; at the same time, Real Estate Crowdfunding also provides opportunities for existing professional/institutional investors to take advantage of Real Estate Crowdfunding’s ability to maximise portfolio diversification (predominantly due to its ease of use and low investment costs).
This makes equity crowdfunding one of the most diverse iterations of crowdfunding to date, one that can be used by all investor types; while first-time investors are using Real Estate Crowdfunding to begin saving for their pension, professional investors can use it to defend against portfolio imbalances. Santander, for instance, are even partnering with a leading UK equity crowdfunding platform to provide money for social projects.
But Real Estate Crowdfunding is not only popular because it provides opportunities for new types of investors, it is also popular because of the potential it has to deliver healthy, secure returns. Crowdfunding for real estate allows investors to put money into properties in the most profitable locations across the world, while at the same time benefitting from the ability to spread the investment across multiple properties.
To demonstrate this, here are a few statistics on crowdfunding in the real estate sector:
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