Over the last few years the crowdfunding revolution has experienced an almost unprecedented rise to prominence. It started out with helping struggling musicians pool funds for album release, and has grown to see multimillion dollar projects as a commonplace feature of the sector. One report by the University of Cambridge Judge Business School tells us that the alternative finance market in the Americas tripled in size from 2014 to 2015, with an estimated total market volume going from $11.68 billion to a staggering $36.49 billion. Figures like these have led some to speculate that crowdfunding will soon become one of the economy’s most important sectors; indeed, a report issued by Massolution has even suggested that 2016 will see crowdfunding surpass traditional venture capitalism.
One of the most exciting developments of the crowdfunding revolution is the emergence of equity crowdfunding, especially as it pertains to the real estate sector. Real Estate Crowdfunding is a way for people to invest in real estate without the extortionate amounts of money that are usually required for traditional property investment. Crowdfunders pool funds to collectively buy properties, and then receive a proportional share of the subsequent returns when the property is sold, as well as a share of the rental income from the property during the ownership period.
Real estate crowdfunding is a step towards a more democratized version of investment, one which helps level the economic playing field and allows the market to be entered by non-high-net-worth individuals. This is something Bricksave are very passionate about: that real estate investment should be available to all, not just professional investors with access to high-level funding. To this end, Bricksave strive to make the entire investment process as easy as possible, as well as aiming to lower risk and increase the potential for capital gains. Unlike other platforms, Bricksave only Crowdfund established properties in high-end locations that already have existing tenants, thus avoiding risks involved with development and removing the vacancy risk that comes with non-established properties, which in turn means that rental income is guaranteed for the crowdfunders. For Bricksave it is all about stability and long term gains – the volatile fix-and-flip approach is not a part of the Bricksave philosophy.
Choosing only luxury properties situated in some of the world’s most desirable cities helps Bricksave secure the maximum potential for both rental income and capital appreciation over time. A good example of this is their Millecento apartment in Miami: a luxurious and spacious property with access to pools, fitness centre, movie theatre and spa, located in an increasingly popular city where everything from tourism to housing is on the rise. The high-end nature of this property means that an investment with Bricksave of as little as $2500 can provide you with an estimated average return of 8.23% per year, which makes for a solid and stable investment over the four year period.
Real Estate Crowdfunding with Bricksave is designed to open the doors to property investment, allowing those that may not have previously been eligible for investment to build up their very own real estate portfolio and take that first step on the property ladder.
Written by Bricksave CEO, Tom de Lucy
April 22, 2016
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