The universe of investing has shifted significantly over the past few years, because of the innovative, new way to invest, known as, Crowdfunding. Private companies, in different industries from real-estate to the non-profit sector, use the crowdfunding platform (usually online) to pool capital together from numerous investors, for the purpose of funding a venture or project. This clever concept has become increasingly popular, paving the way for many private companies to become facilitators in achieving goals, while creating investment opportunities for all types of investors.
For many investors, opportunities that yield higher returns are seemingly attractive. For the past few years, the real estate industry has been using the crowdfunding platform to fund new developments, while promising investors significantly higher returns than those offered by traditional investment products available today. Not to mention, investment terms ranging from just a few months up to a few years, provide a quick return, while offering convenience for many. Investors have the opportunity to place a desired amount, for a specific period of time, without having to care about anything besides the sum of capital they have vested in the project. For some looking to reap the benefits of investing in real estate, not having to worry about property maintenance and rent collection is a plus.
Companies like our own, Jakob Pek Fund, also offer the same concept to accredited investors, as other real estate investment companies do. The main difference, is that the funds are gathered to provide private mortgages to real estate investors. Mortgages are paid off between 6 months to 3 years, securing all investments with property collateral. This program makes investing in real estate truly effortless.
Another great aspect about the concept, is that the investor feels connected to the investment. There’s satisfaction in knowing that your investment is used for a greater good, such as the development of a business, or real estate development. One of the most important factors in investing, is understanding what it is you own, or are investing your money in. Crowdfunding real estate companies have made this information transparent to its investors, which in turn creates a unified agenda between all accredited investors, the real estate investment company and the project.
Crowdfunding companies are setting the new standards for real estate investments. Investors are no longer limited to the “traditional” form of investing in real estate, which hold high requirements such as extensive knowledge of the market, accessibility to investment properties and high amounts of capital. It’s now about investing the amount desired and worrying less. As with all investments, risk is a factor, but this new concept is raising the bar on investing by offering investors an irresistible combination of low risk and higher returns.