Choosing the Right Real Estate Crowdfunding Platform

There are hundreds of real estate crowdfunding platforms available worldwide today. Even for an experienced investor, choosing the right platform can be a time-consuming and confusing process. For a new or inexperienced investor, it can be rather difficult.

On top of that, each platform has its own specific style and approach, so it can be very easy for investors to feel lost in this environment. Not every platform is conducive to an investor’s goals and expectations. Also, choosing the wrong platform can lead to a lot of problems, which in the worst-case scenario might lead to a loss of money.

Before we get started, here are some key facts about the industry to better help you grasp the major concepts…

• The industry is still rapidly developing. The first platforms emerged in the USA in 2012 with the establishment of JOBS (Jumpstart Our Business Startups)
• Real estate crowdfunding is booming. In 2016, the online property investment market was worth more than 3.4 billion EUR. By 2025, the industry is predicted to grow to 300 billion EUR. That’s a huge growth. That’s 88 times bigger within less than a decade.
• Worldwide, there are around 250 real estate crowdfunding platforms and this number is quickly increasing
• Data from more than 200 of them have already been collected and analysed by BrikkApp

Related: Article: 7 Tips on How to Invest in Properties Online

How to Choose the Correct Platform

There is no standard business model for real estate crowdfunding platforms.

Some of the main differentiators are:

• Investment types
• Property types and location
• Platform experience and history
• Fee policy

The real estate experience of the team behind each platform is very important. In order to filter all possible real estate crowdfunding opportunities and to choose the most appealing and promising ones, the staff’s experience fully influences the outcome.

For the long-term success of a platform, the mix of real estate experience and the quality of the management team is crucial. In some cases, platforms are run by purely “Silicon Valley” tech companies who only happened to enter the real estate space.

This was the case, for example, with the US platform RealtyShares, which had to close suddenly in 2018.

However, some platforms are run by experienced real estate professionals who have harnessed technology to …

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Originally published at https://www.brikkapp.com on March 20, 2020.