Our CEO and Founder Andrew Gardiner recently wrote an article for Southeast Business Magazine. As the issue focused on crowdfunding, Andrew offered his insights and expertise. Take a look!
“People have been turning to the crowd for centuries. (1) Shakespeare offered copies of manuscripts in return for funding (1) and musicians have been crowd-surfing on the finance of fans for years.
More recently, the 21st century has breathed a new life into crowdfunding. The sector has been propelled forward by technological advances and the ability to reach all corners of the globe, providing the potential to catalyse social change. Opportunities can be marketed to the masses to offer potential solutions for current issues. I believe this could be why one of the fastest growing trends in the crowdfunding sector is equity crowdfunding. Equity crowdfunding has grown substantially since 2014 by a staggering 295%, which equated to £332 million. (2) In the last decade, traditional property investment has been rendered as somewhat exclusive, mostly open only to those who have immediate access to capital, knowledge of the market and financial expertise. However, property is being democratised through crowdfunding, highlighting the trend’s fantastic potential.
Property Moose, for example, utilises crowdfunding to make way for opportunity and inclusivity. Founded in 2013, it was the first property crowdfunding platform in Europe. By sharing the price of a property across a crowd of investors, a minimum investment of £10 is all you need to become a landlord. You can start receiving any applicable rental income, potentially benefit from capital growth and you could cash in on the eventual sale of the property. In addition, all the hard work is done for you: all the paperwork and sourcing is handled by a team of professionals. There seems to be a new property crowdfunding company popping up every month, and I believe it simply comes down to there being such a high demand for an affordable, easy and hassle-free way onto the property ladder.
In addition, considering the affordable entry point and the accessibility of property crowdfunding, you can diversify your investment portfolio and spread your capital across a variety of opportunities, thus potentially decreasing your level of risk.
Regardless, property crowdfunding opportunities do come with a set of downsides, most notably fees and illiquidity. Such platforms could arguably decrease the level of control you have over your investment. For example, this model involves a democratic vote amongst the crowd around the sale of a property, and therefore, if you’re in the minority, you could end up continuing with an investment you no longer want, and struggle to find an investor willing to buy you out. Property Moose, however, has recently launched an exclusive trading platform to try to combat this issue.
As with all investments, your capital is at risk. It cannot be said that property is a safe bet, but it could be argued that it is more risk averse than other types of investments. Although property prices can go up as well as down, the crowdfunding aspect gives you the chance to put less capital on the line compared to investing in a property outright, allowing you to only risk losing what you have invested.
Whether you’re a millennial struggling to get on the property ladder or you’re looking to secure a comfortable retirement, property crowdfunding could provide you with a chance – for less money and less hassle. With the support of a crowd, resources could be infinite.”
- Written by Andrew Gardiner, CEO and Founder of Property Moose
You can read the entire issue online here. Turn to page 39 to view Andrew’s article.
Disclaimer and Legal
Property Moose does not provide any advice in relation to investments and you must rely on your own due diligence before investing. Please remember that property prices can go down as well as up and that all figures, rates and yields are projections only and should not be relied on. If in doubt, please seek the advice of a financial adviser. Your capital is at risk if you invest. This post has been approved as a financial promotion by Resolution Compliance Limited.
Property Moose is a trading name of Crowd Fin Limited which is an Appointed Representative of Resolution Compliance Limited which is authorised and regulated by the Financial Conduct Authority (no: 574048).
Sources
- http://shareproperty.co.uk/a-history-of-crowdfunding/
- http://www.nesta.org.uk/publications/pushing-boundaries-2015-uk-alternative-finance-industry-report
