With each passing year, investing online is becoming more and more common. The same can be said about investments in the real estate sector. A couple of years ago, if someone mentioned real estate investing, most people would have imagined corporate investors with large capital and years of experience. In 2020, the situation has changed though. With many new online possibilities, the entire real estate market is evolving rapidly. This trend is taking place at an international level.
Online investing in real estate is booming. To explain why we decided to share our top 5 reasons for investing in real estate online and what advantages it brings over traditional real estate investing.
As mentioned previously, people tend to think about the real estate market as being a playground for the rich. With traditional real estate investing, they are probably right. The barriers to entering such a market are usually very high: from requiring international bank accounts and accreditations to financial reports and funds. Simply said, it’s a no-go zone for regular people or inexperienced investors.
However, the same can’t be said about investing in real estate online. The duration of the registration process varies from minutes to hours. Most crowdfunding platforms require a KYC (Know Your Customer) verification, which takes 10 - 20 minutes to complete and 2 - 3 days to be verified (in some cases the process can be instant). One way or another, the entire process is completed online and is many times faster than the traditional way.
2. Lower financial requirements
Most people don’t invest in the traditional real estate market because they know how financially demanding it is. After all, how many people have €300 000 of savings to invest in a property in Barcelona for example? This is why investing through crowdfunding is a very handy and attractive alternative. It requires only a minimum investment amount and allows people to invest as much as they want.
The minimum investment varies from platform to platform. For instance, many platforms allow you to invest from as little as €50 or €100. This approach provides an investment opportunity not only for experienced and wealthy investors but also for beginners and those with limited capital.
The lower financial requirements in online real estate investing allow for another major advantage over traditional real estate investing, and that is diversification. Smaller investments are a great opportunity for investors to diversify their capital and spread it across multiple property projects.
For instance, imagine you have €100 000 to invest. Instead of investing your funds in a single property, you can instead divide the amount between multiple investments. This significantly reduces the risk of losing your capital due to one wrong decision.
Most online platforms offer a comprehensive list of property investment projects. Users can see what projects are currently being crowdfunded, how far along the crowdfunding process is, as well as other information that is relevant to the investment opportunity. It is completely up to investors how many projects they decide to support and how much money they invest.
"Diversification is the only free lunch." (Harry Markowitz)
Using the BrikkApp database, potential investors can access hundreds of real estate crowdfunding platforms. This means they enter the ultimate marketplace where they can choose from thousands of investment projects worldwide and diversify their capital however and wherever they want.
4. Required Knowledge
To be a successful online real estate investor, you no longer need to be an industry expert. Most online platforms provide their users with sufficient data about the properties they offer and the countries they are located in. Also, most of the investment platforms have their own real estate experts, ensuring that every property offered on their platform has been professionally evaluated.
However, the information provided by some online platforms can sometimes prove overwhelming. This is where BrikkApp steps in. As an independent platform, it collects and evaluates data about platforms and presents it to investors in a simple to understand way.
This means investors only require a basic knowledge of the real estate industry. They pick a few property projects they like and decide how much they are willing to invest.
Investing in online real estate saves an enormous amount of time. Going down the traditional real estate investment path takes at least a couple of months to sort out all the paperwork, the formalities, calls and transactions (and these additional laborious tasks cost money as well).
When considering online real estate markets, the situation is completely different. All online platforms offer their users a comprehensive package of services, which enable deals to be done online. So, the entire process, from registration to concluding a deal, takes hours rather than months.
BrikkApp builds a property crowdfunding investments aggregator. We compare real estate investments worldwide to allow individual investors to find the best investment opportunities from as little as 100 EUR.
BrikkApp’s database offers an independent overview and data about more than 200 real estate crowdfunding platforms around the world. To get access to our database register for free.