Estimated Read Time: 5 minutes
Editor: Shaun Callacher
There has been a massive growth in the amount of property crowd funding websites on the internet over the past 5 years. Crowd funding websites involve the raising of finance from a crowd of individuals, pooling their resources for a common project. The benefit to the individuals who invest is they gain a much higher return on their money which is then regularly secured against an asset. The benefits to the borrower often include cheaper borrowing compared to mainstream lenders and fewer loop holes to jump through to receive the money.
I personally use crowd funding websites to borrow and I also use them to invest (It beats having my money sat still in the bank).
I do however also get other benefits from property crowd funding websites. For this post I thought I would share 3 ways I use crowd funding websites to improve my property investing, here they are:
Crowd funding websites share not only your predicted return on your potential investment, but also how they intend to get your investment back. They give you an overview of each individual project and what the borrower intends to do to make the project work. From this you can see what others are doing to make money from property and perhaps it will give you some new ideas?
Most crowd funding websites will upload the property project survey and the property valuations which are completed by a professional RICs surveyor for you to look at. This will then show you evidence of where your money is secured.
By studying the surveys you can use them to see what comparable prices are in close proximity to the project, which may be useful if you invest in the area.
You can also start seeing what makes surveyors tick – which is useful to estimating your own end value on any future project you do.
When it comes to getting your own valuation completed on your own project, you can even use the surveys as a comparable from the crowd funding websites to help you with your own valuation, providing it is relevant of course.
Most crowd funding websites send you an email when they are looking to raise funds for a new project. If a project in your investment area comes up, it can show you what is going on in your area. You can then invest accordingly.
For example, I recently came across a crowd funding project for 60+ apartments in my area. It was raising money for a project that didn’t even have planning yet (so I wouldn’t have seen it on the planning portal). I now know what others are doing in my area and I can act accordingly.
In summary, property crowd funding websites may not only revolutionise how we borrow and invest, but they can also be used as a fantastic tool to improve our investing knowledge.
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