Updated: Feb 25
We are active investors on property crowdfunding platforms. Here are a few reasons why we like using crowdfunding platforms:
We can spread our risk over several investments/developers/crowdfunding platforms
We can invest with developers, and in opportunities, that we might otherwise never come across
The developers are publicly accountable
All investors invest on the same terms; no dodgy side deals being done
We sleep better at night knowing that we have invested in a legally compliant structure
Here are 6 things that we look at when assessing a property crowdfunding platform.
1. Type of projects on offer. What sort of projects are on offer? Do they meet your criteria - location, return, property type etc? Are they the kind of projects you want to invest in?
2. Minimum amount required. One of the benefits of crowdfunding is that you can invest in property with far less money than you need to buy one on your own. It depends on the platform, but sometimes the minimum can be as little as £100, or perhaps £1,000. Check to see that it meets your budget.
3. The information provided. What information do they provide with each project? Is there enough information provided for you to do your due diligence? If you have to request further information, how long does it take to get them?
4. What fees they take. What fees do they charge, if any? At what point of the process do they charge said fee? There might be an initial fee, an administration fee, an annual management fee, a share of your returns, or a combination of the above.
5. Customer service. Look closely at the standard of interactions you have with members of their team when making initial inquiries or request for further information. Do they respond in a timely manner? Are they friendly and approachable?
6. Platform details. Who runs the platform? What experience does the team have? How long has the platform been operating? Is the platform regulated by the financial conduct authority?
What do you look at when assessing a property crowdfunding platform?
Share your thoughts in the comments below.