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Exploring Real Estate Crowdfunding as an Alternative Financing Option for Property Investment

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  • Noorsidi Aizuddin Mat Noor

    (Real Estate Department, Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, Johor, Malaysia Centre for Real Estate Studies (UTM CRES), Mass Appraisal, Housing and Planning Research Group, Real Estate Department, Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, Johor, Malaysia)

  • Chow Zi Xuan

    (Real Estate Department, Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, Johor, Malaysia)

  • Sharon Chin Hin Yi

    (Real Estate Department, Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, Johor, Malaysia)

  • Siti Zaleha Daud

    (Real Estate Department, Faculty of Built Environment and Surveying, Universiti Teknologi Malaysia, Johor, Malaysia)

  • Hairul Nizam Mansor

    (Department of Built Environment Studies and Technology Faculty of Built Environment, Universiti Teknologi MARA, Perak Branch Seri Iskandar Campus, 32610, Seri Iskandar Perak, Malaysia.)

  • Farhana Diana Deris

    (College of Built Environment, University Technology of Mara, 40450 Shah Alam, Selangor)

  • Afizan Mohktar

    (College of Built Environment, University Technology of Mara, 40450 Shah Alam, Selangor AFZ Realty Sdn Bhd, 23-1, Jalan Equine 1E, Taman Equine, 43300 Seri Kembangan Selangor)

Abstract

This paper examines real estate crowdfunding (RECF) as an alternative financing mechanism and discusses its revolutionary potential, particularly in Malaysia, where traditional finance sources pose limits for small-scale investors and developers. The paper elucidates the role of the RECF in democratising property investment, particularly in the context of Malaysia, a forerunner in equity crowdfunding regulatory initiatives. The article employs a qualitative methodology to examine regulatory frameworks, platform operations, and investor activity, aiming to explore the broader ecosystem in greater depth. The major findings identify three distinct crowdfunding models: reward-based, equity-based, and debt-based—each characterised by specific advantages and disadvantages for creators and investors. Reward-based funding is conventional for supporting community-driven initiatives, equity facilitates shared ownership returns, and debt offers a fixed income alternative. The study indicates various advantages, including expanded market access, investment diversification, professional fund management, and portfolio customisation. Nonetheless, issues pertaining to regulatory ambiguity, liquidity, insufficient investor education, and quality assurance are critical for all platforms. The discourse centres on the necessity for a more robust regulatory framework, enhanced platform governance, increased transparency, and heightened knowledge about investor initiatives to foster trust and sustainability. Finally, the report contends that RECF possesses significant potential to transform the real estate sector, liberating money and enhancing investment for inclusive economic growth. Future studies may investigate developing trends, analyse how investors trade, and evaluate technical solutions such as blockchain to enhance platform operations. This study aims to elucidate the institutionalisation of RECF as a viable, secure, and scalable financial alternative in the real estate sector.

Suggested Citation

  • Noorsidi Aizuddin Mat Noor & Chow Zi Xuan & Sharon Chin Hin Yi & Siti Zaleha Daud & Hairul Nizam Mansor & Farhana Diana Deris & Afizan Mohktar, 2025. "Exploring Real Estate Crowdfunding as an Alternative Financing Option for Property Investment," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(5), pages 2815-2824, May.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-5:p:2815-2824
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    References listed on IDEAS

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    1. Mollick, Ethan, 2014. "The dynamics of crowdfunding: An exploratory study," Journal of Business Venturing, Elsevier, vol. 29(1), pages 1-16.
    2. Enrico Battisti & Fabio Creta & Nicola Miglietta, 2020. "Equity crowdfunding and regulation: implications for the real estate sector in Italy," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 28(3), pages 353-368, February.
    3. Mohd Azlan Ab. Jalil & Noorsidi Aizuddin Mat Noor & Nurul Saadah Lokman & Farhana Diana Deris, 2025. "Innovative Blockchain Frameworks Driving ESG Impact in Real Estate," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(1), pages 4064-4075, January.
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