Real estate crowdfunding is one way to invest small amounts in the real estate market. We are certainly in a period where there is a great opportunity to invest in real estate. Today, fortunately, it is no longer only possible to access this market through classic mutual funds, but there are many ways: there are individual equity investors. Equity investors who join together, in crowdfunding, discover the many opportunities that the online world now offers.
Real estate crowdfunding platforms that are very active in the market, in addition to promoting their services, can certainly be very useful in giving us information about investment opportunities. The platforms are a source of knowledge about the activities to watch out for when making this type of investment. In short, all the information needed to better understand real estate crowdfunding.
What is real estate crowdfunding?
Crowdfunding is a form of capital raising that takes place primarily online. Odyseos Hotels operates in the area of real estate crowdfunding, which is the ability to invest in a real estate project directly from your home, so in a very simple way. Real estate crowdfunding, as well as crowdfunding in general, is divided into:
- Loan crowdfunding.
- Equity crowdfunding.
Equity crowdfunding, which is what Odysseos Hotels does for all intents and purposes, allows you to invest in a real estate project by becoming for all intents and purposes a partner in the operation and therefore in the company that is the company developing the operation. On the other hand, in real estate crowdfunding all you are doing is lending money to a company that invests in real estate. It is growing its business, in effect you are just a lender and for all intents and purposes just funding its operations.
There are certainly many advantages that you can get in making real estate crowdfunding investments. One, but not the most important of them is that you can invest right from your couch at home. From your tablet, that smartphone, from any device you can make investments. You can evaluate the benefits of your investments because you have the ability to see the company's intentions and plans. You have the ability to track the progress of those investments.
Differences between crowdfunding and traditional investment funds
Odyseos Hotels was created to make investing in real estate simple. Investing in a real estate fund means, putting large sums of money into a company that actually manages your assets. When you invest in Odyseos Hotels, so in equity crowdfunding of real estate, you are also investing a much smaller amount of money. Investing in a company comes with significantly lower transaction costs. It allows you to eliminate all the typical costs of managing an investment fund. It also allows for potentially more interesting returns for the investors and entrepreneurs who manage the operation.
Of course, every situation, every investment involves risk. There's more to real estate investing than just the perks. Look at it also here in the area of real estate crowdfunding. The company offers profits, they are not guaranteed, it is all risk capital. You need to keep this in mind, and you need to be careful when choosing which deals to invest in.
Guarantees, for investors
Real estate crowdfunding does not offer specific guarantees on an investment project. No investment is guaranteed. In the market we have seen the results of real estate funds, everything is guaranteed, but in reality nothing is really guaranteed. Many people have lost their capital, and we don't want that to happen. The rationale is very important:
What is the way to minimize risk?
What is the way to have a guarantee?
Very simple. Real estate is very important, it's important to understand who is developing the business, it's important that the one who is developing the business also put his own capital into it. He has a network of investors who support him in developing his real estate business. It is important to understand where the investments are located. What the company is investing in, in what area, what is being bought with the funds. How hotel property prices change over the years. Is the value of the property decreasing, is it stable or not. There are various factors that are taken into consideration when choosing to invest in real estate. There are a lot of variables and it is important to go and do proper, relevant analysis of real estate investments.
Of course, Odyseos Hotels also makes sure to have independent opinions and analysis. We have business partners who are very important team members to us and who independently evaluate real estate transactions by assigning ratings that are assigned to specific real estate projects.
It is important that investors understand the risks involved in the transaction, the real estate investment, and therefore the investment that they are going to make, and that they understand and read the documentation well to understand in depth that the analysis has been done for the real estate transaction. In the same way, the analysis also has to be done with respect to the company and the people involved, with respect to the management, so it is very important to determine whether the company can succeed or not.