Assessment of the investment in real estate through innovative funding mechanisms

Abstract

The main purpose herein, is to assess the popularity of the innovative funding mechanisms when acquiring land at the national level. The results of the research suggest that the innovative funding mechanisms are neither popular nor available when making the investment in land in Lithuania. The unavailability of the innovative real estate funding mechanisms was determined by the lessons of the financial crisis of 2008. Now land plots are mainly acquired with personal funds as loans issued by credit unions. The future prospects are not very favorable, since a very small part of the transactions in the land market in Lithuania are funded with bank loans due to the Scandinavian banking policy which is currently responding to the crisis in the Scandinavian asset market. Issuance of corporate bonds serves as another source of funding. Although, theoretically, the mechanism of “crowd funding” could also be employed, the cases of its employment, thus far, have not been registered at the national level. The novelty of this article lies in the provision of a comprehensive approach to the innovative land funding mechanisms since scientific literature, thus far, has lacked the research on innovative real estate funding mechanisms.