In the era of Big Tech, when over 80% of the global population uses a smartphone, investing is no longer reserved for the wealthiest. Today, anyone with a smartphone, internet connection and $10 in their pocket can become an investor.
The conventional approach to investing in a rental property requires an average of $100,000 starting capital. This high investment threshold has made traditional real estate investing difficult for young people who often cannot afford it. Fortunately, new investment concepts like property technology (proptech) startups and crowdfunding have started appearing on the market, making property investment more accessible.
Are PropTech Startups The Future Of Real Estate?
According to the leading company in real estate services, JLL, the number of proptech startups has tripled in the last ten years, and the proptech sector raised over $9.7 billion in funding during the first two quarters of 2021.
Today, there are nearly 9,000 proptech companies. One notable example is Airbnb: Once a proptech startup, it’s now a multi-billion-dollar organization that provides services in more than 200 countries. But Airbnb-style property sharing is only one of many doors that proptech has opened.
Proptech applies modern technologies to a whole range of real estate businesses, simplifying the search, rent, purchase and sale of buildings. Urban planning, administration and maintenance have also become much more efficient.
Since real estate business is impossible without financing, fintech is closely related to proptech. Moreover, big data is vital in assessing property investment opportunities accurately, as well as associated risks.
The Growth Of Real Estate Crowdfunding In Europe
There are three types of real estate crowdfunding in Europe: development loans finance, development equity finance and buy-to-let. The first two types are already common throughout Europe; the two biggest platforms are probably October and Exporo. However, buy-to-let crowdfunding is something rather new; my company is the only licensed buy-to-let platform in the EU at present.
The European crowdfunding market currently operates similarly to the U.S., with each European state having its own regulations. However, this will soon change, and Europe will begin to regulate crowdfunding across all European states, which will make operations and growth of platforms easier. This will match the overall financial market, which Europe regulates as a single unit. In 2020, the European property crowdfunding market hit $822 million in transaction value. And with the new regulation, this number is expected to grow significantly. Regulation (EU) 2020/1503 ensures businesses’ adherence to regulatory standards to protect investors; they can invest their money more safely now and businesses can have more opportunities.
Ample rental investment opportunities can be found all over Europe. The rising number of real estate activities and growing adoption of IT are also crucial for market growth and new-generation rental investment opportunities.
The European real estate market has been experiencing radical changes for the past few years. With the expected increase in popularity, property crowdfunding presents a lucrative opportunity for long-time investments. Thanks to new real estate trends like crowdfunding and proptech platforms, almost anyone can become a property investor today.
Source : Forbes