Is real estate crowdfunding worth it?

By Bricksave Admin | Bricksave

December 01, 2020

News > Blog Article > Is real estate crowdfunding worth it?

Real estate crowdfunding is a relatively new form of investment. This innovative model lets people invest small amounts of capital to enjoy their share of lucrative property markets around the world. You can earn both rental income and capital growth, but that isn’t the only benefit of choosing this investment.

The worthiness of investment goes beyond the return it delivers. Its value also depends on how well it meets your investment strategy. Strategies are different for every investor. You have your own goals, time frames and risk appetite, which all play a role in determining whether an investment is worth it. 

When investing, we suggest looking at the entire picture. If you’re considering real estate crowdfunding, here’s five key points to evaluate to help you decide if this investment will deliver for you.

Real estate returns

Real estate is known to offer significant returns on investment, with markets around the world seeing growth. By 2025, in fact, the real estate market is expected to be worth approximately USD 4.3tn.

Traditionally, investors with lots of capital have enjoyed returns from this lucrative market. But thanks to real estate crowdfunding, people with as little as $1,000 to invest can now take a share. Even for small amounts, the returns on investment can be significant. At Bricksave, for example, we offer an average annual return of 9% (based on a strong currency such as USD), which is considerably higher than other asset classes such as most cash deposits and bonds. 

The benefits of small investment amounts

For those looking to invest less capital, crowdfunding is not only viable but also cost-effective. Unlike traditional property investment, it’s far less likely that you will need to take out a mortgage. That means you can invest without having to factor in the costs of loan interest. Considering that most people cannot afford to take on costly loans, investing in real estate with smaller amounts through crowdfunding is an attractive option. 

A time-saving investment

One of the benefits of real estate crowdfunding is that it helps you achieve your investment goals without taking up much of your time. Whereas traditional real estate requires property maintenance and management, crowdfunding takes these ongoing tasks off your hands. Depending on the platform you choose, the due diligence around the investment should also be taken care of for you. If you work full time or have multiple investments to manage, taking a hands-off approach with crowdfunding investments can be valuable. 

Crowdfunding may carry lower fees

As well as saving time, you may find the costs of the management work out lower with crowdfunding, too. With traditional real estate, you pay for the management of each property. However, the crowdfunding model means you pay towards one team that manages various properties, making the cost per property cheaper. Additionally, you are paying a percentage of an already small investment amount.

At Bricksave, we use technology and economies of scale to keep management fees low. We also keep our fees transparent, making it easy for you to calculate your net profit and decide whether each opportunity meets your investment goals. 

Crowdfunding is a great way to diversify

If you want to diversify your portfolio, whether with different asset classes or within the property itself, the crowdfunding model offers an excellent solution. Because you can invest small amounts, it’s easy to spread your capital over a number of different projects. You can select projects in certain markets and currencies to hedge against local market volatility, which in itself makes crowdfunding worth it.

Bricksave offers a hassle-free and simple way to make returns from the property market, no matter your budget. Take a look at projects you can help crowdfund today.