Property crowdfunding is a form of property investment funding where various investors are acquired and used to buy a property or loaned to developers to finance a property development. There are many ways that crowdfunding can prove beneficial, and you should read on if you want to learn why.
On average, a buy to let mortgage lender will require you to put down a 25% deposit. The average price of a house in the UK reached an all-time high of £266,000 in June 2021, meaning you would need £56,500 upfront and ready to hand over as the deposit alone. The most wanted news for you is that with crowdfunding, you can start with as little as £100.
Anyone Can Utilise It
Traditional property investment is available for many people to use. However, this is often due to them not having the means to secure mortgage funding. Property crowdfunding is an option for many investors that don’t have a large sum of money on hand.
It Doesn’t Take Forever
When you acquire investors, they will delegate how much they want to invest in your property or development. Once you have reached the investment target, it is time for the SPV to purchase the property. The platform will then find a tenant, run admin tasks and collect rent. Timescales aren’t exact. However, you will save a lot of time not carrying out these tasks yourself.
No Experience, No Problem!
Experience is not required to use crowdfunding methods when investing in property. Property crowdfunding sites will handle the property management for you, using a third-party service or directly from their internal team. The only thing required for you to do is invest your money and watch the magic happen.
Profits will fluctuate, but you can anticipate returns in the region of 7% if you split your investment over numerous properties and approximately 4% for one property. Investment returns are a mixture of monthly dividend payments and a capital gain when the property gets sold.
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