Crowdfunding is no longer limited to the world of audiovisual or humanitarian aid. It now extends to real estate. Although the practice in this sector only dates back a few years, we are witnessing a real boom in the market. To learn a little more about this phenomenon, it is necessary to focus on three main points.
Real estate crowdfunding: what is it?
Real estate crowdfunding is based on the same principle as all other forms of crowdfunding. you will have an initial understanding of what this type of financing is. Simply explained, on the one hand, developers are looking for financing for projects, and on the other hand, individuals want to grow their savings. Crowdfunding then makes it possible to collect funds from the latter to enable the completion of construction projects.
The practice allows Internet users to invest in a real estate project of their choice and constitutes a real lifeline for developers who are faced with increasingly strict bank loan conditions. Investors, for their part, inject money into a project with the hope of obtaining a good return when the time comes. It is undoubtedly these advantages that explain its current boom.
Real estate crowdfunding: how does it work?
There are two main forms of real estate crowdfunding. One consists of bringing together individuals so that together they acquire a property and become co-owners. The other, which is much more widespread and less restrictive, consists of going through a platform to lend money to a developer for the realization of a specific real estate project.
There are many platforms for this purpose. The platform only offers projects from serious developers, with a certain return on investment. The investor has the choice between several projects and enjoys complete freedom in choosing the one in which he wishes to invest his money. Everything happens securely on the platform. The necessary documents are filled out directly online and once all the funds are collected, the construction work begins. Community solution allows you to control and monitor the progress of the project and to be reimbursed as soon as possible.
Real estate crowdfunding: are there any risks?
Real estate crowdfunding owes its success to the low level of existing risks. Transparency reigns throughout the project, and the return on investment is guaranteed. However, to avoid any kind of inconvenience, make sure you go through a platform known for its seriousness and which does everything possible to considerably limit the margin of risks that remain.
Indeed, since everything happens on the web, choosing a bad platform would expose you to embezzlement of the money deposited. Also, a portal that does not take the trouble to study the projects and select the promoters with viable and feasible projects exposes investors to a high risk of losing all or part of their money.
Real estate crowdfunding is a financing technique that is still in its infancy, but which is booming. As a result, many platforms offer this new concept. To avoid being lured, pay attention to those that offer you a high repayment rate and invest via a platform that has received approval.
