Crowdfunding evolves with the passage of time. This allows it to reach areas never thought of before. Initially, it was just to finance business but now it’s more than that. Now there’s the possibility of acquiring a property through what’s called real estate crowdfunding. But do you know all the details? Today, we bring you 5 thing that you probably didn’t know about this financing method.
5 things of real estate crowdfunding that’ll surprise you
In the past, we had the opportunity to talk about real estate crowdfunding. And there we explain that it works in a similar way to crowdfunding, but aimed at real estate. Users observe projects on the purchase, sale and reform of all types of real estate. Choose the ones that best suit your needs and invest a certain amount of money. But, only this is about? Let’s see 5 things about it:
1. It has greater presence in Spain
It’s not known exactly, but it’s believed that real estate crowdfunding appeared in Spain. Or at least, it’s the country where this system has a greater presence. Spanish laws are adapted to respond to real estate crowdfunding. And like traditional crowdfunding, they regulate its operation. Therefore, it’s necessary to have the due authorization of the competent entities before creating a platform.
2. It doesn’t require investing a lot of money
When one thinks of real estate, it’s not crazy to imagine large investments of money. But in real estate crowdfunding this isn’t a reality. Namely, we’re talking about crowdfunding. The financing system that allows to offer small investments. Some platforms have a pre-established minimum amount according to the real estate system. But others are more flexible and don’t require high investments, such as Housers.
3. It’s not exactly “buy and/or sell”
It’s a common mistake to believe that in real estate crowdfunding, one is buying a property to inhabit it. People who invest in real estate do so to obtain benefits. Through the profitability that a certain property may have. Based on the money contributed, an investor can receive a very attractive return on investment. Which will be better depending on the investment and the type of property in which it’s invested.
4. It’s possible to invest at any time of the cycle
For those who don’t know, there’s a cycle in the traditional world of real estate. Which is divided in general into four phases: expansion, contraction, recession and recovery. These phases determine the stages of intensity and duration of the purchase and sale of real estate. So it creates a specific moment in which you must buy or sell. However, in real estate crowdfunding it’s possible to invest at any time.
5. You have to have basic knowledge before investing
Another danger that some often ignore are risks. In traditional crowdfunding, there are risks that can also be reflected in crowdfunding. These are especially higher considering that we’re talking about real estate. It’s necessary then that the investor has knowledge in financial matters. In order to determine the profitability of a property and how large the benefit of investing will be.
Both accredited and non-accredited investors can enjoy the use of real estate crowdfunding. This system offers the opportunity to invest in several properties and then receive an interesting return on investment. It already has some years in the market but few know it and understand it in depth. That’s why we hope that reading this info has helped you!
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