Came across a great read this week. Real Estate Crowdfunding: Gimmick or Game Changer? A Real Estate Crowdfunding Report which has been researched very well.
You can download it here!
Whenever new technology is adopted by some of the participants in an industry, it has the potential to disrupt the existing players and their roles, or provide immense opportunity.
The three largest global real estate markets in the world are the U.S., China and the United Kingdom. It was these countries that the report focussed on.
Some of the Key findings of the report were:
- A lot more people have been introduced to Real Estate Crowdfunding that has tapped into the unmet investor appetite from High Net Worth individuals to retail investors
- The Real Estate Crowdfunding market growth is primarily as a result of the gap in the provision of capital to parts of the real estate market and the strong appetite from investors for high yielding returns.
- Investors are drawn to the easy accessibility of real estate investments at low-threshold entry levels, the greater investment discretion offered and the attractive returns and lower fee structures.
- The market evolution has differed in the UK and the USA. In the UK non-institutional investors accounted for 75% of the funds raised on a Real Estate Crowdfunding platform and in the USA the opposite is the case. 73% if the capital processed through Real Estate Crowdfunding platforms in the USA came from Institutional Investors.
- The recent evolution of eREIT’s within the U.S. crowdfunding space, and by major corporations in China, is indicative that these evolving products are very similar to those offered by the established real-estate industry.
- This may force existing stake holders to use their brand and connections to develop more transparent products, streamlined fee structures and other innovations for this receptive marketplace.
In saying all this though time is not on the side of those being disrupted. New market entrants will ensure this is a sprint not a marathon.
Two of the most enlightening parts of this report are:
- P2P lending dwarfs all other types of crowdfunding
- Asia and the Americas are leaving Europe way behind even though the United Kingdom is acknowledged as being the leading proponent of a vibrant, successful and growing crowdfunding eco-system.
No global players were highlighted in the report but one company that is growing substantially in this space is Wealth Migrate. This is a company that enables investors to invest in properties for sometimes as little as $100. The process is to invest is remarkably easy: