how is real estate crowdfunding in Spain?
According to Wikipedia, it is “the practice of financing a project or a company by raising many small amounts of money from a large number of people, usually over the Internet.” This new investment tool is also a new business model: Everyone from different artists to innovative companies have the unusual opportunity for their ideal consumers and investors just a few clicks away
“There is good reason to think the field will continue to grow,” Bloomberg wrote. “To attract investors, crowdfunding real estate in Spain needs projects for them to invest in; to persuade property developers to post deals, crowdfunding needs investors willing to throw down dollars.”
In short, crowdfunding (also known as community funding) is simply an increasingly popular method of supporting projects based on the financial contributions of many participants through websites
Even the real estate investment market is no exception to the crowdsourcing trend. In fact, real estate crowdfunding is evolving to find and invest in new developments, thereby revitalizing an industry that has traditionally focused only on big players
“Investors like asset-backed securities in general and, in particular, property,” Bloomberg wrote
This model connects three main players: the entrepreneur (or sponsor), who proposes a real estate project or business; the funders or investors who create and support the project with their capital; and the company or platform, which brings together the participants and their transactions. One of its great advantages is accessibility: from amounts as low as 100â’¬ anyone can invest in large-scale projects from a personal computer or mobile device
All this makes crowdfunding real estate a very attractive option in Spain
“Investors used U.S. real estate crowdfunding platforms to pour $484 million into real estate projects last year,” Bloomberg wrote. “Some platforms also allow investors to buy stakes in real estate projects or borrow funds for larger commercial projects.”
- Of access important real estate investments with smaller amounts.
- Diversity of projects and investments.
- Simple investment process through online platforms.
- Same risks as other real estate investments, depending on the market.
- Lack of liquidity during the investment period.
- Select a reliable platform with experienced people.
- Opt for projects of proven developers.
- Request the maximum amount of project information and analyze it thoroughly.
- Understand the investment risks.
- Check the regulations of the country where the investment originates.
- Review the terms of entry and exit.
- Consider the term of the investment, as they often lack liquidity in the short term
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