This investment tool could be your ticket into real estate. But is it safe to invest for fast profit?
Crowdfunding has become a social phenomenon in recent years – just look at the success of sites such as Kickstarter – and it is creeping into the property space.
The innovation of crowdfunding for property purchases is providing a way for potential investors to get into the market by lowering the barriers to entry.
Some say it’s just an extension of what already happens in the market place – whether it’s a couple buying their first home or a ‘crowd’ investing together.
Others say it is a high-risk, high-return phenomenon that will shake up the investment space.
Crowdfunding a property purchase enables investors to take shares (via online platforms) in specific ventures or assets.
Effectively, it allows investors to pool money with other investors for an investment.
Property crowdfunding has taken off in the US, with $1.42 billion in investments registered.
If Australia follows after the US and Europe (where demand has exploded and more than $1 billion has been spent), crowdfunding property will take off as an investment channel… but is it all it’s cracked up to be?
Crowdfunding property is very high-risk, and as a relatively new property investing tool, it will be interesting to see how it plays out in the Australian market.
Though property prices have gone up in recent years, you don’t need to fear you’ve missed the boat and crowdfund to afford the next ‘big thing’ you see.
Property fads come and go, but tried-and-true investment fundamentals will never go out of fashion.
A good strategy is the cornerstone of sound property investing and will provide you with solid long-term returns.
Real estate is fundamentally not a get-rich-quick scheme – it’s a long game.
Whether you decide crowdfunding is your thing or not, a clearly defined strategy will serve you well in all instances.
Don’t fall folly to fad investment strategies.
Paul Wilson is an Independent Property Investing Expert who's been educating and coaching investors since 2001. Author of 7 Deadly Mistakes Property Investors Make and How to Avoid Them, he also manages Educating Property Investors, We Find Houses, and We Find Finance.
Through his books and websites, Paul provides valuable, independent guidance and support by teaching strategies on how you can invest successfully, while protecting yourself from the common mistakes that trap many investors from reaching their full potential.
Paul doesn’t promote cookie cutter strategies, instead he demonstrates how you can create wealth as a property investor regardless of your budget, location, strategy and risk profile. Paul makes his home on the Gold Coast and spends his leisure time enjoying adventures, surf and sun with his wife and five children. Protect and grow your portfolio with knowledge.