Crowdfunding - How It Can Help with Property Investments

Written by Posted On Monday, 27 February 2017 00:32

The economic climate has been fraught with uncertainty as we draw closer to April when the UK Prime Minister is expected to trigger Article 50.
There are many aspects of the economy that will be affected, but one major area of interest is the property sector. The growth in house prices may be slow, but growth remains robust. Following the strict requirements of mortgage lenders and other banking institutions, property investors are seeking alternative methods to raise funds.
One solution that comes to mind is Crowdfunding. It has transformed the marketplace and helped entrepreneurs and investors launch projects that where hitherto impossible to get off the ground. As a result, ordinary investors can become venture capitalists, and support projects they are passionate about.
Not many people know how to start investing in property UK with crowdfunding. How can they leverage this opportunity?
We must start by understanding the meaning of real estatecrowdfunding.
What is Real Estate Crowdfunding?
It is no different from other kinds of crowdfunding. For property, a group of investors come together and pool their financial resources to take on a project such as a building development or property investment.
At the basic level, they can buy a property or develop one from scratch. At the end of the day, investors may decide to share the rent proceeds (according to percentage shares) if it’s a buy-to-let or the profits if it’s an outright sale.
The most popular projects are those that are clearly defined, backed up by insight and planning, and offer a substantial benefit or reward.
Types of Developments for Crowdfunding
Projects developed under crowdfunding strategies usually come under niche developments. They include boutique office blocks, small retail establishments, or a block of flats/apartments. Mostly, they are projects considered too small for big real estate developers or real estate investment trusts.
How to Get Started
The two most common ways are:
1. By joining a crowdfunding platform.
2. By meeting with a group of friends or private individuals.
A real estate crowdfunding platform allows individual investors purchase shares in property projects. The minimum investment may vary for each platform from £500 to £5,000 and more, depending on the size of the platform.
Individual private groups may require less capital and may not be as risk-prone as the former. The major advantage of crowdfunding platforms is they perform the planning and research for investors, while the private investors do their own research.
Before getting involved in any crowdfunding project, ensure that you cover the basics and do your homework. All investments are prone to risks. You either earn significant profits or bear the loss.
Investment in property comes with risks as well as the possibility of rewards.
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CrowdLords offer buy to let property & investment property in the UK. We help you raise the funds you need from our crowd of Investors. High income producing investments.

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