For many, investing in property in America may seem like something of a pipe dream – it seems too expensive, too competitive and too far afield to seriously consider putting money down for investment. This is just another example of the barriers that the traditional global real estate market has previously been plagued with, barriers which make the idea of investing in US property apparently impossible to any who isn’t a high net worth individual.
One of real estate crowdfunding’s main aims is to remove these barriers, and America is one market we specifically want to open up to all investors, large or small. With the JOBS Act passed in America back in 2013, the States are now open to crowdfunding for real estate, meaning that the market is primed for a new wave of property investors.
The US has some of the best and potentially most profitable real estate in the world, but the traditional real estate investment barriers make the US property market appear difficult to access. Crowdfunding provides a smarter, more streamlined way of investing in property in the States, breaking down the barriers that before were insurmountable.
The first barrier to break down is that of distance. Investing in property overseas in the traditional way is an enormously complex task, made difficult by the fact that every arrangement has to be made remotely – this is made even more problematic when you take into account the extreme competitiveness of the American real estate market. However, real estate crowdfunding means that this is no longer an issue. Collaborating with our US partners, Bricksave handle all necessary arrangements, meaning that putting money into property in America is just as easy (if not easier) as it would be at home, negating the issue of distance.
The next barrier is price. Some of the most desirable real estate in America is simply too expensive for normal investors, especially those investing from overseas who may not want the risk of a long distance investment. This is the barrier that real estate crowdfunding was created to overcome: by apportioning out the cost of a property across multiple Crowdfunders, the problem of high-priced properties is eliminated, allowing investors to reap the benefits of in-demand American housing without the huge price tag.
The timing couldn’t be better, with cities such as Miami experiencing a new surge of development – 20 000 new apartments built over the last decade, new art galleries and hotels in construction, and a massive increase in the number of visitors year-on-year. The story is similar in New York, where real estate prices per square foot in Manhattan rose an estimated 17.9% from 2014 to 2015. According to the Financial Times, New York is also seeing a surge of new condos being built on Broadway, one of the country’s most famous roads.
With interest in US property on the rise, Real Estate Crowdfunding provides a new way of entering the market without the massive capital needed to invest in the traditional manner, opening the US up to real estate investment from across the globe.
Written by Bricksave CEO, Tom de Lucy
March 21, 2016
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