Property Crowdfunding Explained
You’ve surely heard of crowdfunding and may well have supported some projects yourself, from the recording of an album to buying shares in a start-up business in need of capital. But have you heard of property crowdfunding? It seems to be rising in popularity all of the time and we don’t think it will be long before it becomes a common means of investing in houses and apartments.
If you’re finding it difficult to save up enough funds or get finance for property investment, crowdfunding could be the answer. It’s a form of peer-to-peer lending, opening the opportunity up to anybody anywhere thanks to the power of the Internet and social media. Whilst a great way for the individual to get funding for buying a property, the investors get to put their money into something tangible, secure and essential. After all, a house is hardly going to move, disappear or suddenly become an unnecessary luxury or fad.
Rather than paying for the entire buy-to-let mortgage, investors can put down relatively small amounts in return for a stake in the property. It also means that investors can fund as many properties as they wish anywhere they choose, which adds versatility to their portfolio and gives them the means to gauge the popularity and ROI of different areas. Whether this is a case of investing in multiple properties spread across London in order to map out the best place for a larger investment in the future, or adding numerous cities to the mix in order to compare, say, Edinburgh city centre to Chapelallerton in Leeds, it all proves very easy, manageable and useful to the investor.
Meanwhile, the beneficiary of the crowdfunding project gets to buy their property in return for a pre-arranged percentage of the asset going to their investors. In short, it makes possible what may otherwise be impossible.
Both sides need to do their research. The crowdfunder has to make sure that the investors are reputable and have a legal plan in place as a precaution, whereas the investors must be certain that the crowdfunder has conducted proper due diligence on the property and all of its investors. Though there are risks, with in-depth research and forward planning, the whole arrangement should prove mutually beneficial. All in all, property crowdfunding is sure to grow over the coming years.
That said, when it comes to Hull, property investment is highly achievable thanks to relatively low prices, a flourishing city status and thousands of new jobs on the horizon. Take a look at our properties and get in touch on 01482 342155 or email info@hullinvestmentproperties.co.uk to discover how easy it is to invest in Hull property.
