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How Real Estate Crowdfunding is Transforming Investing

Jun 28, 2017


Real Estate Crowdfunding is one of the fastest growing branches of the crowdfunding revolution. As an industry it grew by 156% between 2014 and 2015, and made even more ground in 2016 to reach an estimated worth of 3.5 billion US dollars. This rapid expansion is having a profound effect on the investment industry as a whole; many investment professionals even believe that the rise of democratised versions of investing such as Real Estate Crowdfunding will fundamentally change the face of the market as we know it.


Levelling the playing field

Real estate investment (and investment in general) is an endeavour traditionally aimed at high-net-worth individuals or professional investors, those with the required amount of capital, the right connections, or insider knowledge to make appropriate investment decisions. Real Estate Crowdfunding has changed this thanks to low investment costs, availability of market info, ease of use, and transparency of transactions. 53% of crowdfunders currently earn less than 50,000 US dollars per year, which means that crowdfunding and equity crowdfunding is starting to level the socio-economic playing field in the fund-raising market.


A new age demographic

Expansive investment portfolios are usually associated with older, more established people in the later stages of their careers. But crowdfunding is again up-ending this trend: 46.5% of crowdfunders are below the age of 35, with only 7.5% being age 55 or over. Forbes points out that millennials are now turning to services like Real Estate Crowdfunding to protect their money as distrust in the banks and financial institutions remains high.


Invest easily from anywhere

Real Estate Crowdfunding is an all-online practice, meaning that investors can now expand their portfolio and make new investments anywhere they happen to be (at home, on the bus, at work etc.) via their smartphones, all with just a few clicks. This is a real change-up from the paperwork-heavy days of investment via traditional financial intermediaries, the administration of which required multiple face-to-face meetings and often extended the processing period into the month-long realm.


New global reach

Real estate investment is traditionally a local affair, requiring the investor to be at least familiar with the area they’re investing in. Real Estate Crowdfunding platforms now provide the information and the means to invest in any country the investor is interested in, no matter where they’re investing from. To ensure prudent investing, most platforms also perform all due diligence tasks on behalf of their crowdfunders, making sure to provide any relevant information they may need to make the correct decision. This change will ultimately affect the flow of investment across the globe, encouraging more foreign investment than ever before and therefore providing more funds for new projects.


Properties Open for Investment

5-2 Wohnresidenz Zogernitz, Vienna

5-2 Wohnresidenz Zogernitz, Vienna

Vienna, Austria

Estimated Avg. Annual Return*1.8% - 3.8%

Total Invested€ 564,500

74% Funded € 564,500

Target € 760,000

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15421 Sussex Street, Detroit

15421 Sussex Street, Detroit

Detroit, United States of America

Estimated Avg. Annual Return*9.8% - 11.8%

Total InvestedUS$ 49,750

53% Funded US$ 49,750

Target US$ 94,320

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*This amount is an estimate and should not be considered a guaranteed figure. The value of your investment can go up as well as down. In most circumstances the maximum duration of an investment will be 4 years.

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