Real Estate CrowdFunding
Real estate crowdfunding has become more popular in Singapore. Singaporean property investors are badly hit by a series of government cooling measures which include the deadly Total Debt Servicing Ratio (TDSR). In the midst of such policy implementation, many Singaporeans are forced or have started to explore other alternative investments such as real estate crowdfunding because the return of investment or the cost of owning a private property for investment purpose is really not that fantastic.
What Is Real Estate Crowdfunding?
Real estate crowdfunding is a new phenomenon which is evolved from the many possible crowd funding options. To understand real estate crowdfunding, we will need to understand what is crowdfunding first. Crowdfunding basically is the raising of funds in smaller quantum amount per lot from a larger pool of investors to finance a new business. In the context of real estate crowdfunding, this is essentially the fund raising from a pool of property investors to co-develop a specific property development project. Property investors fund in a smaller quantum amount per lot or in the multiples of such investment lot amount for a specific period of time. At the end of the agreement period, the property investors can get back both their funded capital as well as the agreed profits between the property investors and the developer. Just a word of caution to do your own due dilgence to assess the underlying risks involved and vet through such real estate crowdfunding agreement.
There are numerous platforms setup over the past couple of years to enable investors from around the world or even Singapore to invest in real estate. It may not be surprise that real estate crowdfunding are not created equal. In other real estate crowdfunding arrangement, the investors make direct investments in real estate, others buy mortgages, and others make peer to peer loans.
Crowdfunding makes use of the easy accessibility of vast networks of friends, family and colleagues through viral social media websites like Facebook, Twitter and LinkedIn to get the word out about a new property development project and attract investors with a specified profit return. From economical perspective, we think real estate crowd funding has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives and venture capitalists and there is certainly an area of potential growth in this market.
Check out the available Crowdfunding Australia opportunity