{"id":1839,"date":"2019-01-02T13:47:09","date_gmt":"2019-01-02T13:47:09","guid":{"rendered":"https:\/\/blog.ethis.co\/?p=1839"},"modified":"2022-11-15T08:19:40","modified_gmt":"2022-11-15T08:19:40","slug":"10-things-property-crowdfunding","status":"publish","type":"post","link":"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/","title":{"rendered":"10 Things You Didn&#8217;t Know About Property Crowdfunding"},"content":{"rendered":"<p>When we first think about property investments, our mind would probably picture high net-worth individuals such as billionaire investor, Warren Buffett and his mentor, Benjamin Graham.<\/p>\n<p>Today however, having deep pockets is no longer a prerequisite to becoming a property investor. This post lists down 10 points for you about how to invest in property with little money. But first, let us get a brief low-down on some property basics and get their definitions out of the way.<\/p>\n<p>Basically, property investing can be briefly described as investments involving the purchase, sale, or management of property, for the purpose of earning a profit rather than turning the property into a place of residence. Taking advantage of the ever growing Internet audience, investors and property developers alike are starting to look at online <a href=\"https:\/\/ethis.co\/blog\/islamic-crowdfunding-platforms\/\" target=\"_blank\" rel=\"noopener noreferrer\">crowdfunding platforms<\/a> as a means to pursue investment opportunities in the property market. Crowdfunding collectively gather resources, monetary or otherwise, from many individuals and institutions to fund opportunities or causes.<\/p>\n<p>Now, onto the 10 facts:<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_51_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\" role=\"button\"><label for=\"item-69eba7b855ee6\" ><span class=\"\"><span style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input aria-label=\"Toggle\" aria-label=\"item-69eba7b855ee6\"  type=\"checkbox\" id=\"item-69eba7b855ee6\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#1_YOU_TOO_can_own_a_piece_of_prime-time_property_in_downtown_New_York\" title=\"1) YOU TOO can own a piece of prime-time property in downtown New York\">1) YOU TOO can own a piece of prime-time property in downtown New York<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#2_The_crowdfunding_industry_is_projected_to_reach_a_valuation_of_more_than_300_billion_by_2025\" title=\"2) The crowdfunding industry is projected to reach a valuation of more than $300 billion by 2025\">2) The crowdfunding industry is projected to reach a valuation of more than $300 billion by 2025<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#3_Property_crowdfunding_platforms_lower_the_barriers_to_entry\" title=\"3) Property crowdfunding platforms lower the barriers to entry \">3) Property crowdfunding platforms lower the barriers to entry <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#4_The_rich_earned_their_wealth_through_property\" title=\"4) The rich earned their wealth through property\">4) The rich earned their wealth through property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#5_Property_crowdfunding_platforms_are_catering_to_niche_investment_markets\" title=\"5) Property crowdfunding platforms are catering to niche investment markets\">5) Property crowdfunding platforms are catering to niche investment markets<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#6_The_two_types_of_property_crowdfunding_investments_Equity_crowdfunding_and_Debt_crowdfunding\" title=\"6) The two types of property crowdfunding investments: Equity crowdfunding and Debt crowdfunding\">6) The two types of property crowdfunding investments: Equity crowdfunding and Debt crowdfunding<\/a><ul class='ez-toc-list-level-5'><li class='ez-toc-heading-level-5'><ul class='ez-toc-list-level-5'><li class='ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#Equity_crowdfunding\" title=\"Equity crowdfunding\">Equity crowdfunding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-5'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#P2P_crowdfunding\" title=\"P2P crowdfunding\">P2P crowdfunding<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#7_The_key_differences_between_equity_crowdfunding_and_P2P_crowdfunding\" title=\"7) The key differences between equity crowdfunding and P2P crowdfunding\">7) The key differences between equity crowdfunding and P2P crowdfunding<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#8_It_does_not_take_much_to_invest_on_a_property_crowdfunding_platform\" title=\"8) It does not take much to invest on a property crowdfunding platform\">8) It does not take much to invest on a property crowdfunding platform<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#9_Property_is_a_very_stable_investment\" title=\"9) Property is a very stable investment\">9) Property is a very stable investment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/#10_Sustainability_of_property_crowdfunding\" title=\"10) Sustainability of property crowdfunding\">10) Sustainability of property crowdfunding<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"1_YOU_TOO_can_own_a_piece_of_prime-time_property_in_downtown_New_York\"><\/span><b>1) YOU TOO can own a piece of prime-time property in downtown New York<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-1843\" src=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/Property-in-downtown-Newyork.png\" alt=\"Property in downtown Newyork\" width=\"621\" height=\"413\" srcset=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/Property-in-downtown-Newyork.png 621w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/Property-in-downtown-Newyork-300x200.png 300w\" sizes=\"(max-width: 621px) 100vw, 621px\" \/><\/p>\n<p>The archaic notion of property investing used to be confined to the rich, especially when it comes to investing in properties that are in prime and exclusive locations. However, owning prime property can be perplexing to would-be investors especially if they are located overseas. Investors have to contend with finding a good agent, seeking out for potential tenants, servicing high cost of ownership or loan, navigating and ensuring compliance to taxation laws, and the intricacies related to the sales of such properties.<\/p>\n<p>Definitely, there may be many different types of property businesses and properties that investors may dabble in, but prime property investments are no longer that discriminating anymore. property crowdfunding allows investors to make investments in major cities of the world where the demand and the typical return on property is high due to the high probability of such properties appreciating over time. Incontrovertibly, crowdfunding property paves the way toward democratising property markets. Ergo, this allows for more investors, even those not blessed with much cash, to collectively own profitable and attractive properties across the globe.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"2_The_crowdfunding_industry_is_projected_to_reach_a_valuation_of_more_than_300_billion_by_2025\"><\/span><b>2) The crowdfunding industry is projected to reach a valuation of more than $300 billion by 2025<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-1841\" src=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/crowdfunding-industry.png\" alt=\"crowdfunding industry\" width=\"620\" height=\"412\" srcset=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/crowdfunding-industry.png 620w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/crowdfunding-industry-300x199.png 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/p>\n<p>With such an explosive growth in value from USD3.5 billion in 2016 to an anticipated upwards of USD300 billion [1] bodes well for property crowdfunding. In order to accelerate such growth, property crowdfunding platforms are also making a shift \uff0d while retaining investments made by retail investors, they are increasing their pitches to institutional investors from commercial property investment groups in order to capitalise on their larger ticket sizes. Through this, the platform is able to escalate their growth by offering partnerships (in terms of resources and knowledge) with experienced property investment groups to the retail investors and institutional investors coming from backgrounds other than property.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"3_Property_crowdfunding_platforms_lower_the_barriers_to_entry\"><\/span><b>3) Property crowdfunding platforms lower the barriers to entry <\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Further to point number 1, property crowdfunding brings greater democratisation to the USD7 trillion commercial property market in the U.S. Without the typical commitments entailed to property investment trusts and its likes, crowdfunding generates consistent cash flows, albeit without its ownership. This allows for more risk-averse investors and investors with less cash to invest in the property market.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"4_The_rich_earned_their_wealth_through_property\"><\/span><b>4) The rich earned their wealth through property<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Did you know that a large number of millionaires \u2013 estimated to be 9 out of 10 to be exact \u2013 earned their wealth not through stocks or gold, but property investments? So, what are you waiting for? It\u2019s time to start on your million-dollar dream by making your first property investment.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"5_Property_crowdfunding_platforms_are_catering_to_niche_investment_markets\"><\/span><b>5) Property crowdfunding platforms are catering to niche investment markets<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The lower barriers to entry afforded by crowdfunding is creating niches within the property investment markets. With evolving property regulations unfurling across the world over the past few years, crowdfunding platforms are churning out property investment ideas that are able to cater to different types of property investment strategies. For instance, <i>Roofstock<\/i>, a crowdfunding platform, specifically focuses on investing in property rentals while <i>Small Change<\/i> focuses on redevelopment and community rejuvenation projects.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"6_The_two_types_of_property_crowdfunding_investments_Equity_crowdfunding_and_Debt_crowdfunding\"><\/span><b>6) The two types of property crowdfunding investments: Equity crowdfunding and Debt crowdfunding<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Returns can come in the form of ownership in a stake proportioned according to the investment amount made in either the property or portfolio, or, quarterly or monthly dividends from its underlying mortgage and payment receipts. This can be done through two typical types of property investments via such crowdfunding platforms: They can either be equity or P2P (debt) based investments on a property project or portfolio.<\/p>\n<p><img decoding=\"async\" class=\"aligncenter size-full wp-image-1840\" src=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/Types-of-property-crowdfunding.png\" alt=\"Types of property crowdfunding\" width=\"555\" height=\"555\" srcset=\"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/Types-of-property-crowdfunding.png 555w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/Types-of-property-crowdfunding-150x150.png 150w, https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/Types-of-property-crowdfunding-300x300.png 300w\" sizes=\"(max-width: 555px) 100vw, 555px\" \/><\/p>\n<ul>\n<li>\n<h5><span class=\"ez-toc-section\" id=\"Equity_crowdfunding\"><\/span><b>Equity crowdfunding<\/b><span class=\"ez-toc-section-end\"><\/span><\/h5>\n<p>\u2013 Dividends usually consist of rental income. Investors will own a portion of his or her share on a property or portfolio and earn profits based on its rental income as well as when a property is sold.<\/li>\n<\/ul>\n<ul>\n<li>\n<h5><span class=\"ez-toc-section\" id=\"P2P_crowdfunding\"><\/span><b>P2P crowdfunding<\/b><span class=\"ez-toc-section-end\"><\/span><\/h5>\n<p>\u2013 Dividends is paid out based on income earned off of a property or a portfolio\u2019s home financing payments. Investors do not own a proportional share of the property and may earn additional income when it is sold.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"7_The_key_differences_between_equity_crowdfunding_and_P2P_crowdfunding\"><\/span><b>7) The key differences between equity crowdfunding and P2P crowdfunding<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>When making comparison between equity crowdfunding and debt crowdfunding, it is recommended that one examine these two categories from 2 key aspects, as one normally would with bonds and stocks:<\/p>\n<ul>\n<li><b>Duration:<\/b> P2P crowdfunding tend to be for shorter durations as compared to Equity crowdfunding. Equity investments can last several years and may be dependant on a sale or a refinancing of the property for the investor to be able to realise its principle amount back.<\/li>\n<li><b>Liquidity: <\/b>As such, P2P crowdfunding is more liquid than Equity crowdfunding. On the other hand, Equity crowdfunding has the potential of having a higher rate of returns.<\/li>\n<\/ul>\n<p>Deciding on which crowdfunding strategy to go for depends on the investor\u2019s appetite toward risk and liquidity.<\/p>\n<p>However, do exercise precaution and due diligence when investing on property crowdfunding projects as only you know your risk tolerance. The risks that apply to commercial property investment channels &#8211; market risk, interest risk and liquidity risk \u2013 similarly apply to those on crowdfunding platforms.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"8_It_does_not_take_much_to_invest_on_a_property_crowdfunding_platform\"><\/span><b>8) It does not take much to invest on a property crowdfunding platform<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Investing possibly as low as $500, one could make his or her first investment on a property crowdfunding platform. The Internet has enabled the pooling of financial resources online and this lowers the barriers to entry for retail investors who may not be flushed with cash. Essentially, property crowdfunding enables small-time investors to participate in funding big projects or support large portfolio of investments.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"9_Property_is_a_very_stable_investment\"><\/span><b>9) Property is a very stable investment<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In comparison to other investment classes, property is generally regarded as a stable investment. Despite it being cyclical in nature and may bring again the same horrors engulfing the global markets in 2008 subprime mortgage crisis, property investments do bring in returns with less volatility and a greater measure of predictability when compared to investing in stocks. That aside, the regulatory landscape post-2008 crisis has evolved and it is highly unlikely that a meltdown of such scale will occur in this generation. Still, investing in property is an inherently risky venture. It is advised that you do your due diligence and suss out projects and investment portfolios that excites you after you have worked out your risk tolerance profile.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"10_Sustainability_of_property_crowdfunding\"><\/span><b>10) Sustainability of property crowdfunding<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>When it comes to property projects, many would picture mega developments in posh districts. However, the matter of the fact is that many aspiring developers have trouble raising the initial $1million to $5 million, as it is an amount that is too small for a private equity fund and too large for a single investor to undertake. Coupled with this fact is the huge growth potential for property crowdfunding; investors could see that such platforms and means of funding property properties grow to be more sustainable in due course.<\/p>\n<p>Property Crowdfunding is here to stay, and currently one of the fastest-growing verticals of the booming crowdfunding scene globally. Property crowdfunding is a nimble model that is already implemented in various types of real estate activities, and it\u2019s role and impact in the real estate industry is expected to continue to grow in years to come. Savvy investors need to be well informed and actively participating in Property crowdfunding to understand it well. Our own campaigns on <a href=\"https:\/\/www.ethiscrowd.com\" target=\"_blank\" rel=\"noopener noreferrer\">EthisCrowd.com<\/a> have given excellent returns that work out to 10 to 15% on an annualised calculation. Do browse our open campaigns!<\/p>\n<div class=\"rns\" data-title=\"10 Things You Didn&#8217;t Know About Property Crowdfunding\" data-tags=\"\" data-categories=\"Crowdfunding,Real Estate Crowdfunding\" data-comments=\"1\" data-date=\"1546436829000\" data-author=\"Solyh Ahmad\" data-single=\"\" data-url=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/\"><\/div> <!-- Check out https:\/\/reactandshare.com -->","protected":false},"excerpt":{"rendered":"<p>When we first think about property investments, our mind would probably picture high net-worth individuals such as billionaire investor, Warren Buffett and his mentor, Benjamin &hellip; <span class=\"read-more-link\"><a class=\"read-more\" href=\"https:\/\/ethis.co\/blog\/10-things-property-crowdfunding\/\">Read More &rsaquo;<\/a><\/span><\/p>\n","protected":false},"author":27,"featured_media":1842,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":""},"categories":[7,1996],"tags":[],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/ethis.co\/blog\/wp-content\/uploads\/2019\/01\/Property-crowdfunding.png","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbDwgm-tF","_links":{"self":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/1839"}],"collection":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/comments?post=1839"}],"version-history":[{"count":1,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/1839\/revisions"}],"predecessor-version":[{"id":6617,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/posts\/1839\/revisions\/6617"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/media\/1842"}],"wp:attachment":[{"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/media?parent=1839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/categories?post=1839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ethis.co\/blog\/wp-json\/wp\/v2\/tags?post=1839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}