BENEFITS OF CROWDFUNDING IN REAL ESTATE SECTOR
- FOR INVESTORS: Real estate sector is one of the largest and well established sector. Investors visits online on the real estate platform and go through the property make and the location where it is situated and how much return they will expect, before they invest in the current stated scheme. Investors either make direct investment, or get equity debt, meaning hereby to say that by whatever methodology they invest it will make them to directly access to the platform to verify real estate assets.
- FOR DEVELOPERS: Borrowing of money from banks are very time consuming and entangle them in various unnecessary formalities of paperwork. Since 2008 this procedure has been made more complicated. Crowdfunding concept has brought much change in this concept. Developers who are to start new project, provide their all details online and provide opportunities to the investor to invest in the new project. Internet facility will provide to the investors to see the status of their investment for 24 hour. Whatever cost involves in this process for making the investment is less.
- REAL ESTATE SECTOR IS VAST SECTOR: This sector is vast. It is not related to properties situated in one location only. But all over the region of that particular country and you can make investment in any of the region to that country.
- HELPFUL TO RAISE MONEY: Crowdfunding platform is very helpful to raise money. All the investors belongs to highly accredited families. In this platform there is 24/7 service is available and if any doubt arise service of lawyers is always available.
- INVESTOR WILL GET REGULAR RETURNS: When investor make investment in the project, the concerned real estate group provides them monthly return on the basis of their investment. This return will get directly deposited in the bank in his account. This return is basically the profit part of the developer which he shares with all his investors.
- FINANCIAL SERVICES PROTECTION \: Crowdfunding investment do provide financial services protection if the investment fails. Developers do have schemes to mitigate the loss of the investor in the form of repayment of amount which is invested in the project.
- CONCEPT OF CROWDFUNDING IS SPREADING TO OTHER COUNTRIES ALSO: Crowdfunding concept is spreading fast. UK have already its established platform and now it is spreading to Canada and USA also.
- INVESTORS NOT TO WORRY ABOUT INVESTMENT: Investors can see the status of the company any time and as such it has more transparency.
- DIRECT CONTACT BETWEEN BORROWERS AND INVESTORS: Before the origin of this phenomenon if any investor wants to invest in the project or borrower wants to attract investors for their project, there were several intermediaries who were playing very important role. But with the advent of internet the role of intermediaries is vanished there become a direct contact between borrowers and investors.
LOOPHOLES OF CROWDFUNDING
As there are no standards followed in crowdfunding many countries restrict investors to make investment through this mode. No doubt this investment is easy to make and provide high returns, but there is no option if the bow of an arrow goes wrong.
CONCLUSION
Crowdfunding in real estate sector is very beneficial for both borrower and investors. This provide the platform where investor can invest easily through internet and will be able to see the status of his investment at any time for 24 hours and on any day. Borrowers also protect themselves from the rigid formalities of the bank for borrowing money and it is helpful in bringing borrowers and investors nearer.
I present the above ideas to empower the readers who want to invest in real estate sector. This article will be extremely helpful to them before taking any step towards this side.
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