The real estate crowdfunding industry is growing as fast as Bitcoin but is getting much less mainstream attention. The industry produced $3.5 billion last year alone, and the growth is only getting fast. By 2025, the industry will be valued at more than $300 billion. Here are the top three trends in real estate investment for 2017:
- Investors are moving towards institutional capital
- Non-accredited investors are gaining steam with more investment options
- Platforms and technology for real estate crowdfunding is still evolving
Real estate crowdfunding allows large groups of people to pool their capital for bigger investments, so institutional capital is gaining a lot of steam. More investors are looking towards institutional capital to accelerate growth with more available supply. It is still vitally important, however, to maintain a dedicated base of investors that ensure solid underwriting standards
Alongside the growth of crowdfunding investment, non-accredited investors are also gaining a lot of power. Title III of the JOBS Act allows real estate crowdfunding to include non-accredited investors, and many online marketplaces are taking advantage. Although non-accredited investors outnumber their accredited counterparts, they fall behind in overall liquidity.
In the past two years, parts of the tech industry have been advancing at an unprecedented pace, and it’s no coincidence that real estate crowdfunding is gaining so much traction at the same time. Technological advancement and new features rolling out on crowdfunding platforms could still make or break certain ventures.
In 2018, a handful of real estate crowdfunding platforms will begin to pull noticeably ahead of others. For investors, it will be important to identify those platforms early and recognize that real estate crowdfunding has immense potential as an industry.