What is Real Estate Crowdfunding?

Technological advancements are giving rise to new ideas. What was once thought impossible is now becoming possible. The Internet, especially, has spawned new business ideas and opportunities. One such is crowdfunding. Crowdfunding is an act of raising funds from the ordinary citizens to fund a project, idea, business or startup. Ordinary citizens, here, are the investors. The businesses are the fundraisers. The medium of connecting them both is an online platform.

Real Estate Crowdfunding

Crowdfunding has indeed evolved over the years. Its application is now becoming so diverse. Applying it to Real Estate is a new phenomenon. On a Real estate crowdfunding website, development of projects like office/retail spaces, hotels, urban townships, homes, apartments, skyscrapers can be funded by the public.

A developer campaigns on the website seeking funds. Interested public can invest and get future returns in the form of interest or equity share. Though a recent phenomenon, with the relaxation and enactment of laws like Jobs Act, real estate crowdfunding is gaining pace.

With crowdfunding websites conducting fool-proof process by following verification task, giving investment documents and following other due diligence processes, the credibility and trust in the concept are also growing. 

Pros and Cons of Real Estate Crowdfunding

For the general public, it is an opportunity to be part of big real estate projects which is otherwise impossible. As they too are part of the projects, they are assured of good annual returns in the form of interest. 

Investors can get full idea of the project on the website. Details of property or project, estimated yearly returns, the project location, etc can be made visible. 

In case, the Real Estate market witnesses a downward trend, investors may be badly hit. 

Starting a Real Estate Crowdfunding site

Since the phenomenon is new and the chances of success are high, many entrepreneurs are showing a high level of willingness and enthusiasm to start up a website that can connect realtors and investors. 

A website can be catering only to the audience of one country or the global audience.

Creating a site from scratch needs so much of money and manpower. Building a site from scratch or using an excellent Crowdfunding software can be helpful. The advantage with a readymade software is that they come integrated with modern technologies, great features and so on. Moreover, customization of the software can also be done according to one's requirements. This way, a beautiful platform can be started up and success can be achieved.