Why Do Real Estate Investors Use Real Estate Crowdfunding?

Real estate crowdfunding is a way for accredited investors to find great deals on real estate investments. In the past, the best real estate deals were only available to elite insiders within the real estate industry. The rich grew richer while the rest had no access to premium deals. Old-school real estate investing is often likened to an old boys club. The new school is about becoming an equal opportunity marketplace for all — and big strides are being made to accomplish just that.

Real Estate Investing Via Crowdfunding is Accessible and Transparent

Real estate crowdfunding has not only opened new real estate investment opportunities to a wider audience, but it has also provided an alternative for those avoiding the traditional lenders who broke trust during the crash of 2008. The financial meltdown left many investors wary of financial institutions. This skepticism resulted in a demand for transparent investment methods which cut out costly middle men and offer higher, more stable returns. It is no surprise that real estate crowdfunding has become a desirable option due to its stability, tangibility, transparency, and accessibility.

Investment Diversification and Risk Management

The ability to minimize risk through maintaining a diverse portfolio has been key to the success of alternative investments such as online lending. Diversification is the cornerstone of any successful investor, thus a portfolio mix of tangible, intangible, and financial assets will yield higher returns, and lower risk.

Here is a little insight on this growing trend from CEO and Co-founder of Sharestates, Allen Shayanfekr:

“People are investing in real estate crowdfunding because it’s a new opportunity that they weren’t able to access previously. It’s giving people a chance to start investing in a new asset class that is different and tangible and physical. People that are investing in real estate crowdfunding can drive by the assets that they’re investing in; see them, touch them. And, it’s just a warmer, fuzzier feeling than you would get from investing in a public company on a public market.” – Allen Shayanfekr, Sharestates CEO

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