By Manuel Cornejo | Bricksave
April 23, 2024
News > Blog Article > The rise of real estate crowdfunding: …
Real estate has always been a highly sought-after asset class, well-known for its potential for generating consistent income and long-term capital growth. But for more than a decade, the introduction of real estate crowdfunding has opened the doors to a new breed of real estate investor. Today, investors have more choice when investing in real estate than ever before.
The concept of real estate crowdfunding emerged in the early 2010s, when it became possible for investors to pool their resources and invest in real estate projects, breaking down the traditional barriers of entry to an asset class that previously required huge amounts of capital before you could own property. Since then, the popularity of real estate crowdfunding has surged globally, fuelled by its ability to make real estate investment more accessible, flexible, and diversified.
But it’s the technology that has made real estate crowdfunding so popular. Investment platforms like Bricksave make it easy for people everywhere to access and invest in real estate investment opportunities anywhere in the world, allowing them to invest in markets previously out of reach due to geographical limitations or were considered too high risk given the lack of local knowledge.
Today, platforms like Bricksave provide real estate investors with all the connectivity and access to information they need while offering them the reassurance of protected online transactions and smart contracts that make investing instantly accessible and secure.
Technology has also massively improved communication and reporting between investment platforms and their users. Investors can now access real-time data on their investment portfolios – property by property – including occupancy rates, rental income, and projected returns, all from their own homes.
Real estate crowdfunding has several notable advantages over traditional real estate investment – but the most fundamental advantage is the lower amount of capital needed to invest. Traditionally, buying a single residential property outright requires upfront capital of hundreds of thousands of dollars. Such a high upfront cost has meant that before the arrival of crowdfunding, property investment was only for those investors with serious money in the bank, or the ability to borrow large sums. And that’s not the only cost to consider. Owning a property outright also involves ongoing maintenance costs, property taxes, and potential renovation expenses before the property can generate rental income or be sold for a profit.
But real estate crowdfunding platforms solve these problems. First, allowing investors to take an ownership stake in residential property projects with a much smaller initial capital outlay, starting from just a thousand dollars, significantly widening the pool of potential investors. When it comes to those follow-on costs from owning a property, crowdfunding spreads these costs across a large group of investors, reducing the financial burden on each individual investor and making it easier to diversify a real estate investment portfolio across multiple properties or projects.
Ease of management for crowdfunded real estate investments is another positive that investors love. One of the most daunting aspects of traditional real estate investment is the requirement to manage the property. This can include dealing with tenants, overseeing repairs, and navigating complex legal and regulatory frameworks. Bricksave investors get a hands-off investment experience. The day-to-day management of the property is handled by experienced professionals, freeing investors from the time-consuming responsibilities of direct property management.
As we move further through 2024, the popularity of real estate crowdfunding will continue to grow, and more investors will recognise the advantages over traditional property investment. Crowdfunding has globalised real estate investment, making it simpler and more practical for investors to explore and invest in properties worldwide. Investors can now spread their capital across multiple assets in different cities and countries, significantly mitigating risk while potentially enhancing returns.
The digital nature of crowdfunding platforms gives investors a new standard in transparency and user-friendliness. Investors have immediate access to detailed project information, financial forecasts, and updates, all within a seamless online interface – giving them all the information they need to make informed decisions without any significant delays to their investment.
Make the most out of your 2024 in real estate investment.
By lowering the barriers to entry, reducing individual risk exposure, and eliminating the hassles of property management, crowdfunding platforms like Bricksave have opened up the real estate market to a broader audience. Coupled with the advantages of technological advancements, real estate crowdfunding presents a smarter, more accessible, and more efficient way for investors to diversify their portfolios and tap into the potential of the international real estate market.
At the same time, allowing real estate investors to pool their resources has opened up more opportunities in high-value projects with promising return prospects, helping people to own diversified investment portfolios with the potential for greater financial gains. It’s no wonder that real estate is now an opportunity that new generations of investors have at their fingertips.
Investing carries risks, including loss of capital and illiquidity. Please read our Risk Warning before investing.
