Factors To Consider While Choosing The Right Real Estate Crowdfunding Platform
There are several hundred real estate crowdfunding platforms
currently all over the world. Even for the experienced investors, selecting the
right one can be confusing and time-consuming process. So, for an inexperienced
or new investor, it is even more difficult.
Apart from that, each platform for crowdfunding for real estate has various specifics, approach, and style, so
it can be really easy for the investors to become lost in the environment.
Additionally, not every platform is right and suitable for the expectations and
goals of an investor. Also, choosing wrong platform can cause tremendous
troubles, which can result in loss of money.
There is no standardized model for Real Estate
Crowdfunding Platforms. The main differentiators are:
·
Property types and location
·
Investment types
·
Fee policy
·
Platform experience and history
Moreover, the experience of the core team behind the platform
is crucial so that it is able to filter every possible real estate crowdfunding
opportunity and to select the most promising and appealing ones. In fact,
long-term success of any platform depends on quality and real estate experience
of the management team.
How To Choose The Right Platform For Crowdfunding For Real
Estate?
Client Experiences
The feedback and personal experience of clients are important
insights for the investors while choosing the right platform One can look for
those reviews on independent review websites, checking relevant blogs,
considering opinions of people on trustworthy Facebook groups.
History of the Platform
A huge indicator while deciding where to invest is the
history of a platform. One should look for –
·
The time duration for which the platform has been
operating
·
Total number of projects taken up by the platform and knowing
how many of them were successfully finished and funded.
·
Average return performance
·
If any local regulation authority regulates it
·
If they have been fined for breaching regulations by
the local government
·
Additional documents like source of funding of the
company and its track records
Kinds of Investments
The Real Estate Crowdfunding Platforms usually focus
on particular kinds of investments and investors must know what type they
desire to invest in, prior to choosing a platform.
Platform’s Core Team
An investor should delve a little deeper to find out who is
behind the platform and the experience its team has is a strong indicator. For
example, if the platform is run by real estate professionals who have several
years of experience, it definitely adds plus points. However, it does not
necessarily mean that a platform is completely safe for investing.
Market
Many platforms are focused on the local market and do not
offer international projects. So, choosing the location of your investment
first and then searching for the suitable platform for your requirements and
goals should be your strategy.
Platform’s Origin
An investor should also pay attention to each platform’s
background and its purpose. Multiple platforms have teams of professionals,
making sure that every crowdfunding projects they provide have been thoroughly
evaluated and analyzed. On the other hand, some platforms work more like
matchmakers that connect investors with developers and sponsors without
analyzing every project in the first place.
Charges
While deciding which platform for crowdfunding for real
estate would be right, fee is a necessary factor. You must know that fees
policy of the platforms can differ significantly. Some platforms charge on the
basis of investor’s returns while others charge before investors get any
returns and fees do not reflect them. A dew few platforms do not charge any
fees from the investors but from project developers and sponsors.
Auto-Invest and Secondary Market
A very handy feature can be secondary market trading,
specifically for those investors who are take interest in long-term
investments. It lets investors buying and selling their investments with
investors, hence making the investments much more liquid.
Investors can find the Auto-invest tool an important deciding
factor as well. This tool will distribute the investor’s assets automatically
among available project deals on the platform. However, one must use
Auto-invest tool with caution.
The Bottom Line
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