Investing in real estate crowdfunding is among the trending discussion nowadays. Real estate investing is not as simple as stock investing. Because real estate investing necessitates a substantial amount of capital with restricted liquidity. On the other hand, real estate is a tangible asset. It offers reliable income at higher levels than other investments while also benefiting from long-term appreciation.
But, do not worry if you only have a small amount of money to invest in real estate. You can invest in halal real estate crowdfunding. So, basically, you only need to transfer a few amounts of money. Then, the developer will finish the project, and they will pay you after the project is ready.
What is Crowdfunding?
Crowdfunding is a method of raising funds for a project or business by accumulating small investments from a large number of people. The concept is to collect a large amount of money from small investments contributions. When developers are not able to fund the whole transaction, they raise funds from individual investors.
How Does Real Estate Crowdfunding Work?
A project sponsor is a person or company responsible for the real estate project. The sponsor is responsible for acquiring, managing and selling the investment.
The crowdfunding system links the sponsor with investors who are interested in the project. It informs potential investors about deals, what projects that the investor can choose and collects capital from investors. Furthermore, The investor contributes to the fund and receives equity shares of the company.
Making a Social Impact
You will not only profit from your investment but also have a social impact. You will help low-income families to have quality houses. The project transformed into the housing to assist people in establishing stable lives. Besides, real estate crowdfunding is sharia-compliant. Investing in real estate is permissible as long as it is not used for haram activities and no haram transactions occur throughout the process. It is also permissible to use crowdfunding if we do not have the funds to purchase the entire building.
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