Real Estate Crowdfunding: Should You Invest?

With interest rates on savings low and no immediate sign of any improvement on the horizon, the question of where to put hard earned savings has never been trickier. Property has always been a safe investment and despite recent changes to rules and regulations remains so, but not everybody has the capital to invest in even the most minimalist of flats. So what is the alternative? One answer could be real estate crowdfunding.

What is real estate crowdfunding?

Institutional investors with millions to invest in private property have seen excellent returns, with enough risk spread to prevent capital disasters. For individual investors, however, one bad property in their portfolio could wipe out an entire investment capital. With crowdfunding becoming legally viable in both the UK and the USA, it brings real estate investment within everybody’s reach.

In simple terms, crowdfunding is when a large number of investors pool small amounts of money to raise a larger amount. Internet platforms connect multiple investors and attract their money by offering them incentives through property returns. Like any high-reward investment, crowdfunding in property can be high-risk but it has great potential providing small investors do their homework first.

How can I invest safely in real estate crowdfunding and make a profit?

As always, money that can’t afford to be lost shouldn’t be invested. It’s safer to spread investments across several platforms and monitor performances carefully and, of course, read the terms and conditions and data protection policy of every site.

The ability to make a profit is genuinely out there, so how can investors tap into this? Invest time in researching and reading everything you can find on crowdfunding especially if you’re new to property investment. Choose a platform that allows you a trial practice or cooling-off period and to mitigate your risk offers a portfolio that’s spread over multiple properties, if possible a hundred or more. Once you’re happy, start off with small amounts and reinvest your returns. Then you’ll be set for a happy and prosperous welcome to the world of real estate crowdfunding. / Sashkin