We all know fundraising through crowdfunding is very common these days. There are numerous factors why someone might want to volunteer, make a donation, or financially support a movement. You might have already heard of comparable social initiatives, but there is also real estate crowdfunding. So let’s see what is real estate crowdfunding.
Know about real estate crowdfunding in real estate from the experts at NoBroker. Get approved for a home loan from NoBroker with minimal documentation here.What is the meaning of real estate crowdfunding India?
Real estate crowdfunding is similar to other forms of crowdfunding. Real estate benefits from quick and simple access to significant amounts of money. You then become the owner of the business or the land. You can become investors in a project and raise money that you otherwise might not have been capable of doing through crowdsourcing. However, similar to crowdfunding for social purposes, the real estate sector in India is not as developed or well-liked.
For example:
A builder of real estate notices a run-down house with no facilities. The price of this house is Rs 3 crores, possibly due to its advantageous location. The developer makes lists of his criteria and provides estimates for remodelling, amenity development, etc. Consider that he or she predicts the market price of this property will be Rs 10 crores over the course of 5 years after undergoing the necessary restoration and development at a cost of Rs 2 crore. Therefore, this person now needs Rs. 5 crores. This is where ordinary investors get a chance to participate in crowdfunding. These investors are preferred by the developer over obtaining a bank loan.
What are the various types of real estate crowdfunding?
1) Equity crowdfunding
You can use the equity-based approach as one method of crowdfunding. You can assist the developer in raising funds by contributing a little sum in exchange for a stake or a portion of the rental income by participating in this. Investor returns tend to be higher under this paradigm.
2) Fundraising for debt
Debt-based crowdfunding, which is the more established and well-liked of the two varieties, includes the investor getting a fixed interest rate according to the amount contributed.
You must have understood real estate crowdfunding now.
Read More: What are real estate investments? What is a real estate broker commission? What is assured return in real estate? What is real estate vs mutual funds?Your Feedback Matters! How was this Answer?
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What is real estate crowdfunding?
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2023-01-23T09:44:25+00:00 2023-01-23T09:44:26+00:00Comment
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