Generally speaking, there are two types of players in the property market. Those who buy property for investment purposes (to develop, flip or to generate rental income) and those who buy property to live in or to work from.
Traditionally, the property investment market has been a market to which a lot of people did not have access, and which was largely dominated by high net worth individuals and institutional investors. However, as with most areas of modern society, technology is starting to bring about change with the introduction of the property crowdfunding movement. Crowdfunding platforms such as UK based Property Partner and Minarah Group have helped revolutionise the property investment market and make property investment accessible to people looking to make smaller investments in property and who may not be in a position to fund or to raise funds for an outright investment property.
Crowdfunding platforms have given individual investors an alternative to real estate investment trusts (REITs) and have facilitated direct investment in property development and acquisitions. Crowdfunding also allows potential investors to contribute amounts as low as €50 to buy shares in properties which are then purchased through Special Purpose Vehicles (SPVs). Investors can make their investments though an online investment portal and in return for their investment, they receive an annual dividend and a share of the capital when the property is sold.
To date, property crowdfunding has not had much of an offering for investors in the Irish property market. There are virtually no Irish based property crowdfunding platforms despite the growing property and technology markets. However, with the growing economy and rapidly rising property prices, there is little doubt that this is a financial trend of which we will be seeing more and more of in Ireland in the future.
Crowdfunding is a new and truly game-changing concept that enables investors to raise money for businesses and an easier way to access property ventures. The idea behind crowdfunding is that many people are willing to invest a small amount, and when they do, large sums of money can be raised quite quickly. It opens doors for businesses to investors they could never reach otherwise.