- By VestMunity
- Posted May 17, 2016
Why Real Estate Crowdfunding Works
The lucrative real estate industry has long been associated with returning high yields. Additionally, there has long been a historical connotation of the “slow-moving behemoth that is the real estate industry,” according to WORK[etc]. Although the real estate industry has traditionally been slow to change, in the past few years, new technologies and platforms have paved the way for the industry to be completely transformed and to join the rest of the world in the 21st century.
There is no doubt that tech has arrived in real estate. An article from the University of Pennsylvania recently reported that, “The real estate crowdfunding market is only a few years old, but it has taken off.” Overall, the advancement of technology has generally made our lives better, like helping to conquer communication barriers. In addition, new platforms, products, and other technological innovations are emerging at a seemingly endless rate.
Technology is certainly impacting the real estate industry in a similar way - from allowing the reporting, utilization, and implementation of detailed analytics to optimizing the manner and speed with which deals can be made. Technology is truly changing the world of real estate and signs point to continued growth throughout the coming years.
Crowdfunding offers you an alternative to traditional real estate investing.
Crowdfunding investing has perhaps been one of the fastest growing segments within the real estate industry. And, for good reason. Investing in real estate is generally a long-term, safe strategy for establishing a diversified investment portfolio. A calculated real estate investment will also potentially create a reliable source of income.
But, there are some problems with the process of traditional real estate investing, like the lack of transparency, the inability for investors to control their own portfolios, and the barriers to entry for investors looking to establish themselves. Crowdfunding presents an attractive solution for investors to the alternative of inefficient, fragmented, and vague real estate loans by utilizing technology and data-driven processes.
How does real estate crowdfunding benefit investors?
No doubt, there are options for people when it comes to investing in real estate. However, real estate crowdfunding offers benefits that other options, like purchasing a rental property or investing in a real estate investment trust (REIT), simply cannot match.
Consider the issue of safety and security in real estate investing. Real estate crowdfunding platforms offer an enormous amount of transparency when compared to, say, gambling your life savings or your kid’s future on your friend who just went to school and now has a license. Investing on a crowdfunding platform, like VestMunity, allows platform users unprecedented access to functional data and much more. Furthermore, all returns and investment documents are regularly updated for additional peace of mind.
Another great benefit for investors in real estate crowdfunding is accessibility offered with reasonable minimum buy-ins. With VestMunity, for example, the minimum investment is currently $1,000 per investment, unless a higher or lower amount remains open for a particular investment opportunity. It is must to have a safe and trustworthy partner so investors can be assured of where and how their investments are doing in real time.
Crowdfunding also helps the community at large.
In addition to the potential financial rewards real estate crowdfunding provides, improving properties through crowdfunding will also contribute to a possible increase in the value of surrounding real estate. Consequently, investing in real estate crowdfunding will create more opportunities because others may decide to reinvest in the area as well due to the upturn in beneficial activity.
Crowdfunding real estate platforms, like VestMunity, have made it easier and safer for accredited investors to get involved in the exciting and rewarding real estate industry. Invest with VestMunity today or learn more about how you can get involved with real estate crowdfunding with VestMunity by reading the FAQ page.