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Business  21, Apr 2014

Can crowdfunding help you own a house?

Crowdfunded real estate offers a brilliant opportunity to Singaporean investors, says Aksvini Kamaran of imoney.sg. How? Read on

Over the past couple of years, the technologically-savvy generation has popularised a number of eclectic buzzwords such as ‘selfie’ and ‘memes’; however, only a few of these words have had a real worth-while impact on the lives of users. One of these esteemed few words in mention happen to be ‘crowdfunding’. Most of you have already witnessed its potential in action with the launch of phenomenal Kickstarter projects such as Oculus Rift and The Micro 3D printer.

Although crowdsourcing platforms like Kickstarter and Indiegogo have helped sow the seeds of an entrepreneurial revolution worldwide, the fact is that crowdfunding is still a freshman in the fraternity of large-scale investment.

Crowdfunding has worked well on a very limited scope and the possibility of its investment model successfully transcending into the realm of real estate investment is still a topic of hot debate among old school financial gurus and new-age hotshots alike. The question of the hour is how infrastructure and real estate projects can benefit from the same distributed, bite-sized funding strategy associated with crowdfunding that allows individuals to buy a tiny stake?

Firstly, it is essential to clear the popular misconception of equating the Kickstarter model to be the prototypical standard applicable for all crowdsourcing platforms. Kickstarter’s legal requirements, reward system and risk evaluation policies are definitely insufficient for financing a multi-million dollar property development project.

Even so, the pervasiveness of the internet is undeniable and crowdfunding is a flexible model that can leverage the connectivity in the right way and offer a viable platform to investors who are interested in getting a taste of the pie. Although Singapore has already seen a healthy influx of real estate crowdfunding opportunities in recent times, the market is still ripe for the pickings when it comes to valuable investment options with both, current cash flow and appreciation potential.

Real estate is an evergreen investment that has always proved to be the most effective combatant against inflation. Unfortunately, Singaporean real estate costs are absurdly astronomical for most Singaporeans to afford without getting themselves into a lifetime of debt.

Therefore, crowdfunded real estate offers a brilliant opportunity to Singaporean investors who are keen on diversifying their portfolio to reap the best profits. Apart from that, crowdfunding also allows investors to enjoy an enriched, risk-averse avenue for pumping their money into various real estate projects in order to mitigate risk.

Crowdfunding in real estate also opens up the investment horizons for Singaporeans who are interested in international residential or commercial properties that can give them higher returns in the future. The Singapore Media Development Authority recently granted a generous capital grant to CoAssets.com, one of Southeast Asia’s premier real estate crowdfunding platforms.

CoAssets essentially provides a digital platform for conducting real estate crowdfunding campaigns targeted at Asian investors. Now users can get an objective and comprehensive analysis of the hot properties available in the market instead of being forced to read about them in over-ambitious promotional advertisements. There is focus on improving market transparency and delivering unbiased information to encourage more real estate enthusiasts to jump into crowdfunding campaigns.

Although the Singaporean branch of the firm was only launched a few months ago, it boasts of real estate projects worth up to S$15 million (US$12 million) available for investment. To the delight of Singaporean investors, there is no shortage of opportunities across the borders of their country.

Numerous projects listed in countries such as United States of America, China, Phillippines, Australia, Thailand and Japan have popped up on its platform, which have earned a significant chunk of campaign targets due to heavy capital investment made by Singaporeans.

Real-estate analytics is a boon to investors who can leverage it to zero down on the real estate projects that best favour their financial needs in their preferred markets. Crowdfunding in real estate is a bastion of modern capitalism that is helping to break down financial barriers and make the market alluring for investors with wallets of all shapes and sizes.

The author is Country Manager (Singapore) of imoney.sg

The views expressed here are of the author, and e27 may not necessarily subscribe to them

e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested to share your point of view, please send us an email to writers[at]e27[dot]co

Aksvini Kamaran

Aksvini Kamaran

Aksvini Kamaran, works for iMoney.sg, Singapore's one of the leading financial comparison website. With background in Economics and Finance from RMIT University, Aksvini believes financial knowledge is the engine of one's wealth.

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