Published on : 18 March 20203 min reading time
In France, participatory financing or crowdfunding is attracting more and more investors. And via crowdfunding, it is of course possible to invest in new real estate. We therefore talk about real estate crowdfunding, i.e. participating in the equity of a property developer.
Everything you need to understand about said real estate crowdfunding
Like other types of equity investment, real estate crowdfunding involves financing real estate programs by raising funds from all interested savers. These funds will then be paid to a developer with a project in mind. Of course, all projects are also presented on online crowdfunding platforms to capture the attention of investors. In crowdfunding, each player finds its own interest, so it’s a win-win situation! On the project owner’s side, he gains autonomy from the banks. As for the investors, they will be able to recover their capital with a really profitable capital gain once the property is sold. And if the fundraising is not successful, they will be reimbursed. And even if real estate crowdfunding is not without risks, this does not prevent investors from being interested in this kind of project. This is because the real estate sector promises rather attractive returns, so it is difficult to resist.
Choosing the right real estate crowdfunding platform
To invest in real estate through crowdfunding, you need to rely on an approved platform that only selects real estate projects with high profitability. Once you arrive on the specialised platform, your first reflex is to check whether the site is registered as a CIP or PSI approved platform. You should also find out about the platform in question and its team by taking a direct interest in the number of projects financed, the success of the proposed real estate programmes, the achievement of the announced performances. You should therefore only choose platforms whose team has skills related to the real estate sector. You should also not forget to analyse the quality of the information transmitted to investors.
To analyse the project before embarking on the adventure
As already mentioned above, real estate crowdfunding, like other forms of crowdfunding, is not without risk. Therefore, after having selected the appropriate platform, you should then take an interest in the project in question. Please first examine the file, making sure that the project is located in an area where there is a sustained demand for real estate. To do this, give preference to large conurbations. Next, make sure that the programme has planning permission. In order to further minimise the risks, you can also carry out some research on the developer in question to make sure of his seriousness and, of course, his skills. If you are a first-time investor, it would be preferable to bet on a project whose reliability is more important, for example commercial type projects. If possible, don’t bet on just one project! Try to choose different projects and on several platforms.
Everything you need to know about crowdfunding real estate
What kind of crowdfunding to invest in?