There is no doubt that investing in Real Estate in the US is a great alternative to trust your money on. It has attractive returns, provides a steady cash flow with periodic payments, and has intrinsic value, not only in the property itself but in its land.
However, it is not the first option that comes to our mind when looking for possible investments because of the amounts it requires…
But that has changed.
Back in 2016 the opportunity appeared, and now it is just before your eyes: Real Estate Crowdfunding.
What is Crowdfunding?
It is a way of funding a project by raising money from a large number of people, typically via the Internet. It is a practice used in many industries to get financed, for instance, startups, companies, consumer lending… and real estate.
How does it work?
There are many crowdfunding platforms that allow you to invest almost any sum of money (even small and medium- sized amounts) in any of the real estate projects’ options they offer. The idea is to finance a property by using small amounts of capital from multiple individuals.
Does that mean you own real estate?
Not exactly. If you are investing in equity, you don’t own part of the property itself, you are a shareholder, and your stake depends on the amount you have invested. But if you are investing in debt, you would be acting as a lender to the property’s owner.
How is the investment returned?
In the case of an equity investment, the return would be a monthly or annual share that comes from the property’s rental income, and when it is sold, you get your capital back.
In the case of debt investment, you would receive a fixed rate of return determined by the interest rate of the loan.
Why is it a great opportunity?
Because you would be investing in a safe, high-return option no matter how much money you have to do so. But hey, if you are thinking this option is not for you because you could afford investing in owning a whole property: think again. Crowdfunding would allow you to diversify your investment in many properties that are not generally offered to the public, and you would not need to get involved in the day to day administration or ongoing costs of owning a property.
This funding method is disrupting the real estate market, and is constant growth! It is expected to reach US$ 868,982.4 million by 2027, and you investment could be part of it.
See? Dreams do come true!