According to Massolution’s crowdfunding report, money raised by individuals, budding brands and even established companies through crowdfunding platforms exceeded $34.4 Billion in 2015. Analysts even predict that crowdfunding will surpass VC funding this year. These numbers, while staggering, are not surprising given current market trends. What’s more interesting is when we drill down to vertical specific crowdfunding. For example, in the real estate industry businesses are using this not-so-new funding source to disrupt their respective markets to potentially maximize their visibility and profitability.
Real estate is one of the fastest growing markets to take on the concept of crowdfunding and apply it in a new way. Whether you’re participating in the real estate market in an institutional capacity or as a solo investor, you may have been told that real estate is an investment that always appreciates. Those who invested prior to 2008 know, unfortunately, that’s not always the case. However, what is true is that a diversified portfolio should, if possible, potentially contain a real estate play. Why? Some say it’s because land is one of the most precious and scarce resources. But this argument has been falling on deaf ears, particularly amongst millennials who simply don’t feel the same pull to own things as their parents and grandparents. As a result real estate was, and is, a prime market segment poised for change, especially with the growth of real estate crowdfunding.
Here are four emerging trends in real estate crowdfunding to watch this year.