How crowdfunding is changing the face of real estate investing
When it comes to real estate, 2018 has definitely been the year of crowdfunding in the French-speaking region of Switzerland. Following in the footsteps of Crowdhouse in Zurich, several new companies headquartered in Geneva, including CrowdPark, Foxstone and Swisslending, are rapidly penetrating the local market.
Why Real Estate Crowdfunding?
Crowdfunding is rapidly reshaping the way individuals perceive the market and invest, and the Swiss Crowdfunding Association was therefore created to bring together all the crowdfunding platforms in Switzerland, including those in real estate. Crowdfunding is having a major impact on this sector which is considered one of the safest and most profitable forms of investment. The dream of many of jumping on the property investment bandwagon, has now become a reality. The industry is clearly being disrupted!
To date purchasing real estate in the region has been costly, complex and time consuming. Thanks to the introduction of this innovative means of buying property through an online platform, individuals now have the opportunity of investing as little as CHF25,000 to acquire a share in a residential property or to invest in a real estate development project. As Sebastien Demartines, Director of CrowdPark explains: “my personal experience led me to understand how difficult it was for an individual to invest in property, owing to the endless red tape as well as the prohibitive cost of real estate in the region. Real estate crowdfunding opens the doors to property investment and offers a stress-free solution for anyone seeking a viable investment.”
With an average return on investment of some 6% (thanks to rental income), an option to sell your share at any time, no management headaches and direct online access to all relevant information so as to follow your investments in real time, real estate crowdfunding has become an enticing alternative to traditional property investment. As David El-Eini, COO of Foxstone puts it: “There is an undeniable added value in investing through real estate crowdfunding. The minimal investment required opens this asset class to a wide range of investors. The larger selection of properties on offer and their management by real estate professionals allows a non-specialist to save both time and resources."
A Solution for Property Owners as well
This new business model is also attractive to property owners and real estate agencies as it offers a whole new dimension to the sector, with digitalization and co-ownership at the center. This does not mean that they plan to forego traditional methods of selling property, but instead consider this as an added and complementary opportunity. Companies are also negotiating partnerships with these start-ups, as they see real potential in this trend.
In 2019, forecasts for the future of real estate crowdfunding in the region are particularly encouraging with opportunities for both companies and clients to reap the benefits. Communicating and building awareness among the public will be a priority as it is believed that the local market has so far barely been tapped.
20 Ch. des Buclines, 1224 Chêne-Bougeries, Genève, Suisse
022 518 14 52 | firstname.lastname@example.org | https://www.crowdpark.ch
Rue des Bains 35, 1205 Genève, Suisse
022 800 26 26 | email@example.com | http://www.foxstone.ch