Real estate crowdfunding is a new-born concept that is playing a major role in property investment in India. It enables several investors to come together with their capital to invest in real estate projects. The structure of this model provides a substantially new way for investing in real estate by making it more accessible and less exposed to higher risk.
What is Real Estate Crowdfunding?
Real estate crowdfunding is one of the ways of funding property investments whereby a large number of investors contribute small amounts of money. Particularly, it differs from conventional real estate investments, in which an individual can directly purchase a property, but with crowdfunding, one can invest only a part of a property.
Key Features of Real Estate Crowdfunding in India
- Low Minimum Investment
Initially one can begin putting in a very small amount, sometimes it can be as little as ₹50,000 to ₹1 lakh.
- Diverse Portfolio
Crowdfunding is useful in the sense that it allows the investor to invest in several properties as opposed to investing in one property.
- Professional Management
The crowd-funded properties are normally controlled by experienced real estate experts to enhance property maintenance and rental revenue stream.
Benefits of Real Estate Crowdfunding
- Accessibility
Real estate crowdfunding in India has opened an era for retail investors. Anyone who has some amount of money can invest in real estate because it is not so expensive to get involved in starter projects anymore.
- Risk Mitigation
Investors have an opportunity to diversify investments; that’s an effective way of minimizing the risks that are associated with property investments.
- Higher Returns
These platforms tend to target the property that has the potential of getting good returns as compared to other forms of investments.
How to Get Started with Real Estate Crowdfunding in India
Getting started with real estate crowdfunding in India is simple:
- Choose a Platform
Conduct research and choose a trustworthy real estate crowdfunding platform. Make sure that the platforms are SEBI (Securities and Exchange Board of India) certified.
- Review Investment Options
Review the assets that are available for investment. Some of the things that may influence a person in this decision include location, kind of property, and or expected profit
- Invest
Start with a small capital until you get familiar with the type of stock to invest in. Gradually you can scale up your investment as you want to when you are comfortable.
Things to Consider Before Investing
- Platform Reputation
Make sure the platform on which you are going to implement crowdfunding has a proven track record.
- Property Due Diligence
Search for the properties that you are interested in and study them well.
- Exit Strategy
There is a need to have adequate knowledge of the available exit strategies. Real estate is not a short-term investment, so one should understand how and when one can get out.
The Future of Real Estate Crowdfunding in India
The real estate crowdfunding in India is predicted to have quite a high growth rate. Simply put, if the concept of this type of investment promotion becomes known to an increasing number of people, the opportunities will increase. This trend favors younger people intending to invest in real estate, but unable to afford large sums of money commonly required in real estate business.
Conclusion
Real estate crowdfunding in India has done enormous shifts in real estate investment. Due to the low competitiveness, easy entry into the market, and the possibility of receiving high revenues, it is suitable for beginners and professionals. Begin the business at a small scale, study the market, and the legal restraints, and live the dream of being an active participant in the growth of the real estate industry in India.
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