Property Crowd Funding Position Essay Example | Topics and Well Written Essays - 500 words

Property Crowd Funding Position - Essay Example There are three types of crowdfunding, which include donation, debt, and equity. Donation crowdfunding is mostly related to noble causes, where most people decide to invest simply for they believe in the purpose of Crowdfunding. Similarly, debt crowdfunding is based on the concept of peer-to-peer lending process1. In debt crowdfunding, the entire process revolves around lending money, wherein the investors expect to receive their interest on their invested amount and thus, gain profits. In this case of debt crowdfunding, along with the financial returns, investors also aim at gaining the benefit of contributing to the success of a particular purpose, which they believe as worthwhile. Additionally, in the case of equity crowdfunding, people invest in exchange for equity. Fundamentally, here the money is exchanged with the shares. Correspondingly, it can be stated that when the funding is successful, the community’s share value goes up, and vice-versa2. It is worth mentioning in this regard that both debt crowdfunding and equity crowdfunding can be related to property crowdfunding concepts, wherein investors tend to buy a real estate in order to sell it or let it out in order to obtain profits or returns. Aimed at elaborating on the context of property crowdfunding, the discussion henceforth will elaborate on two main themes, which are property or real estate and crowdfunding. In the view of today’s competitive global business world, crowdfunding in real estate has emerged as a new investment option with secured high returns for many. It was following this augmentation in the rate of property crowdfunding that the Jumpstart Our Business Startups (JOBS) Act of 2012 was brought into effect in the US. This new rule was intended to allow all the investors from every income level to gain direct access to the real estate market with the help of crowdfunding.