Peer-to-peer(P2P) lending links property partners requiring capital with investors seeking a competitive return for their savings. Investors have the opportunity to enter the Real Estate market with low minimum investment amounts and without the burden of managing their property.
Real Estate projects include residential property such as apartment buildings and commercial property such as offices, shopping centres and other investments previously inaccessible to retail investors. Crowdfunding is gaining momentum rapidly due to the many benefits it gives both investors and property groups.
In today's ever-evolving marketplace, Peer-to-peer lending offers an alternative to the banks for sourcing finance for Australian Real Estate developments. In addition to flexible funding options, project sponsors will also be attracted to Real Estate Crowdfunding because:
For investors in today's market, it can be tough to find investment classes that are not exposed to the recent fluctuations in the public markets. Direct property investment in Australian real estate offers an investment class that is the base of strong fundamentals. The stability of rental cash flows makes real estate an appealing asset class, in comparison to shares. More information on cash flow investing can be found here, additional benefits of direct investment in Australian Real Estate via crowdfunding are:
The traditional barrier into the real estate market has been the high amount of capital expenditure required to purchase a single property. By uniting contributors together to finance a project, investors can overcome this barrier and participate in Australian Real Estate developments. Exposure to Real Estate projects such as apartment complexes, shopping centres, and office buildings would otherwise be out of reach for retail investors.
Contributors can leverage off the experience of developers who handle the work attached to property investments. Crowdfunding allows investors to not only enter the real estate market, but also to achieve diversification across a range of asset classes, reducing portfolio risk.
Real Estate is an important asset class which is made accessible to all investors through peer-to-peer marketplaces. Investors are involved in real estate investments with just the amount of money they prefer, independent of the scale of the development. Project owners benefit from a streamlined platform that allows them to raise the finance needed to begin development promptly.
For more information on real estate crowdfunding, property investment and FinTech, please visit the CrowdfundUP blog here.
The information in this article is general in nature. Any advice it contains is general advice only and has been prepared without taking into account the objectives, financial situation or needs of any particular person.
The article content is not intended to be a substitute for professional advice and readers are urged to seek their own appropriate advice before making decisions.
Any reference to a particular investment is not a recommendation to buy, sell or hold the investment.