Is crowdfunding important for real estate development?

[Good-Person]

Crowdfunding is one of the most popular kind of investment strategies and it is used by many different projects. However, as far as real estate is concerned, do you think that crowdfunding is a good way to invest in the real estate market?

 

[Kane]

Crowdfunding is not a popular concept in the real estate market in my home country. IN our country, real estate is mostly controlled by the private sectors and mostly by private companies. There are no publicly traded or crowd funded real estate development projects.

 

[linux.poet]

I really think that crowdfunded real estate investments are just causing problems in my country. REITs (Real Estate Investment Trusts) are driving the prices of homes up, meaning that less people can afford homes, meaning that more people are investing in REITs in order to have exposure to the real estate market. This is a form of investment self-sabotage, and may even be an unsustainable bubble.

Meanwhile, REITs also restrict the investors who want to leave the trust because it could mean that they have to sell off one of the properties in the trust. This means you need to sell off your share to someone else to exit, which just means that they keep winning at everyone else's expense. The only winners are the trust's owners.

A REIT that just contains apartment buildings could be fine because everyone living there is a renter anyway, but a REIT that owns single-family homes, townhomes, or condos that individual owners could otherwise acquire is sabotaging the home buying market and making it so people can't buy or own their own homes. Owning your own home is the way that you ensure financial security in my country, especially a house owned free and clear with no mortgage. Keeping people out of such security is just causing people unnecessary stress.