Investors Can Easily Transact In Real Estate “Shares” Thanks To The Crowdfunding Portal Smartcrowd.
Using the SmartCrowd crowdfunding platform, investors can buy and sell shares in real estate that the company has purchased using their funds. Usually, these investors must hold onto their “shares” of that specific property until its value increases.
These shares can now be traded whenever someone wants to buy or sell them thanks to the introduction of the new add-on. An investor with a stake in one property, for instance, could increase his holdings by obtaining a stake in another.
In actuality, this develops a “secondary market” for their stakes. According to Siddiq Farid, CEO, and co-founder of SmartCrowd, “what’s both exciting and important for us is that investors can now realize their gains on the secondary market, in addition to the fact that we enabled people to make micro-investments.” In actuality, every seller on the secondary market was able to sell some of the listed shares.
The business’s “secondary market” launched last month and will be active twice a year. According to the reasoning behind this, six-month cycles would be sufficient time for a property to increase in value in a market that is still rising. According to SmartCrowd, sellers in the August sale experienced an average total return of 21.1%, which included both rental income and the capital gains from their exits. 2.3 times more buyers than sellers.
Obtaining Funding From A Crowd
When Dubai’s real estate values started to rise again over the past year, crowdfunding for real estate investments really took off. This was offered to investors who lacked sufficient funds but desired to purchase real estate in Dubai. Thus, crowdfunding websites like SmartCrowd gather the pool of money that investors contribute before investing it in real estate. As a result, each investor receives a “share” in the property.
“The success of our secondary market demonstrates that those in need of liquidity can more easily access their funds, while investors who want to expand their exposure can buy shares in an efficient, transparent manner,” Farid said. “Our secondary market structure gives investors more control, enabling them to better manage their portfolios and plan their exits.”
“More importantly, it’s never been done in the region before, so being the first to make this possible is a significant milestone for our organization.” We firmly believe that this is the prospect of real estate investment.”
Siddiq Farid and Musfique Ahmed founded SmartCrowd Limited in 2018, which is a DFSA-regulated platform. It is a subsidiary of SmartCrowd Holding Ltd, a Hub71 company. Since its launch, the platform has distributed over Dh4.0 million throughout rental income and crowdfunded more than 75 properties.
Additionally, “Fractional” Ownership Exists In Dubai
Dubai also permits “fractional” property ownership. However, only a small number of buyers will receive title deeds for each asset in these transactions. Individual investors may sell their ownership interest in this property as well. Individual investors in a crowdfunding project do not receive any deeds; instead, the platform would retain ownership of them.