For most people the word “bubble” is immediately associated either with tech or real estate. In recent years, these two industries have brought “unforgettable” experiences to many of those who risked pouring all their money in tech ventures or real estate in the hope of getting huge profits (and some people really did succeed!). As an asset, real estate is renowned for high returns in low-interest-rate environments and a long-term appreciation potential. What makes more and more people consider investing in this industry today is an opportunity to do it globally and independently of the location – all thanks to new platforms developed by startups. Remote investing in properties and homes is a powerful wealth-building tool for experienced professionals, millennials, and even pensioners!
Crowdfunding was a starting point for remote real estate investing and enabled all-profile investors to acquire property: the acquisitions vary from $5000-stakes in a single-family home to more pricey shares in office towers. Such platforms as Realty Mogul, RealtyShares and Fundrise support this investing and are valued at $2.6 billion along with 200 other firms. Although this form of remote property investing seems to be an easy track for beginners, there are certain disadvantages: investors purchase only a small portion of property, which considerably limits their control over the capital. In addition, there are certain tax liabilities that can easily decrease investors’ fortunes.
Luckily, shortcomings of those complicated crowdfunding models have been noticed and eliminated in new real estate funding platforms recently developed within several tech startup projects. HomeUnion and OwnAmerica provide opportunities to buy entire homes and manage customized portfolios according to the location, cash flow, and appreciation rates.
Real estate tech startups now offer better-quality solutions that provide protection to investors and help them earn on investments through various combinations of cash flow and appreciation tools. Also, the underlying asset is land, not a piece of paper that guaranteed fractional ownership: this way anti-crowdfunding platforms help real estate investors make real decisions with obvious consequences.
According to real estate category statistics in Venture Scanner’s portfolio, real estate startups are valued at $3 million globally. These companies are growing rapidly in the US and getting more and more advanced in providing hassle-free experiences of remote property acquisition. In Europe, remote real estate investing is not that popular yet, although there are many opportunities for that. This could be a new business niche across European startup ecosystems, which is likely to disrupt real estate investing.
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