Opportunities for the Use of Real Estate Crowdfunding Platforms

Abstract

The real estate sector is seeing the development of a new model for financing projects in the digital world, in the form of so-called "crowdfunding" platforms. These platforms connect individuals and companies looking for funds with individuals looking for diversified investment opportunities, even when their resources are limited. This market has evolved and gained popularity, both because of the 2008 financial crisis and the 2020 Covid-19 crisis, while attracting many investors who aim to contribute to and benefit from the development of new technologies. The blockchain technology is one such innovation, which is increasingly being used in crowdfunding platforms. This paper discusses the method and models by which platforms operate, including blockchain. Mainly, models are used to divide real estate ownership into shares and guarantee dividend income to its investors. Another type of model is the provision of loans, which the borrowers can repay to lenders, directly through the crowdfunding platforms. This paper defines the basic characterization of real estate crowdfunding platforms and examines the opportunities facing the sector, which represents a fast-growing alternative to traditional financial institutions, challenging them to adapt to the new digital reality.