How to Take Advantage of Real Estate Crowdfunding Trends in 2017
Forbes just released the top 3 real estate crowdfunding trends in 2017.
- Institutional Capital
- Non-Accredited Investors & eREIT
According to Forbes, “Real estate crowdfunding continues to be a dynamic and ever-evolving industry, growing to an estimated $3.5 billion in 2016. By 2025, the crowdfunding industry as a whole is anticipated to be valued at more than $300 billion and online real estate marketplaces are primed to capitalize on that explosive growth.”
With massive growth projected in the next 10 years, how can you take advantage of the real estate crowdfunding trends that lie in the year ahead?
Invest in real estate crowdfunding platforms before they take on institutional capital.
Many veteran platforms will begin sourcing from large institutions to back up their smaller investments. This may limit the opportunity for individual investors to invest in future projects. Find platforms that still cater to individual investors to invest in projects such as DiversyFund. If the platform eventually sources from the institutional capital, your investment will be much stronger. Beating institutional capital to the punch will only bring advantages to your investment.
Build your portfolio if you are a non-accredited investor.
2017 will be the year platforms open investment opportunities to non-accredited investors. This gives anyone over the age of 18 with the minimum amount to invest the opportunity to become a real estate investor. This will be the most popular trend because non-accredited investors greatly outweigh accredited investors. For a non-accredited investor, this is a “gold rush” period where you can start building your investment portfolio on properties such as this property with 18% preferred returns.
Invest with up and coming platforms
As established real estate crowdfunding platforms look to grow and scale, they will be acquiring smaller platforms for diversification. It is highly strategic to invest with these smaller, niche platforms prior to any consolidation that occurs with bigger platforms. It will give you the opportunity to leverage your investment from the smaller platform to the larger platform. Added benefits of investing in more boutique-like platforms include having more control over your investment, receiving a higher level of individualized attention towards your portfolio and transparency.
Research and understanding the market are always key when making a sound investment decision. However, these trends have made a perfect window of opportunity to take advantage of real estate crowdfunding in 2017.