Cookie Consent by Cookie Consent by TermsFeed

The Next Big Thing In Property Crowdfunding

Property investment is an aspiration of many. However, many people are put off from beginning to invest due to the high level of initial outlay required to purchase property. Couple this with the risk of unpaid rent and the hassle of managing a property portfolio and the prospect of property investment begins to feel daunting.

It can also be a challenge to get onto the property ladder, particularly for first time buyers who may be struggling to save up a large enough deposit whilst renting, or who may want to avoid mortgages and debt.

What if we could bring together the property investors with the prospective homeowners? This is where property crowdfunding comes in.

What is property crowdfunding?

Property crowdfunding involves multiple investors pooling money together to purchase property. The investors then hold shares proportionate to their level of investment. This allows for a much lower initial outlay than with traditional buy-to-let property investment.

What happens next depends on the type of property crowdfunding that is being used.

What types of property crowdfunding are available?

Property crowdfunding can take many forms, including buy-to-let crowdfunding, development crowdfunding and peer-to-peer lending. It is important to understand the key features and differences between each type of property crowdfunding, as well as the level of risk involved in each, to enable you to make an informed decision.

  • Buy-to-let property crowdfunding involves buying shares in a property which will then be rented out. Profits from the rental income are distributed proportionately between investors, generating a stable stream of income.
  • Development property crowdfunding involves investing in a property or group of properties which are under development – in other words, a new build. The property is sold once completed, with the proceeds split proportionately between investors.
  • Development property crowdfunding is typically a short-term investment which carries a higher level of risk. This is because developments are not always successful and things can go wrong along the way.

Peer-to-peer lending involves lending money to another person so that they can purchase or develop a property. Rather than owning any equity in the property, the investor owns a debt which is secured against the property.

The borrowed money is repaid when the property is sold or refinanced, so this is generally a short-term investment. The risk level of peer-to-peer lending depends largely on the type of investment.

How is CrowdToLive® different?

Most property crowdfunding platforms are debt-based. The platforms which are equity-based tend to focus on development finance – so funding new-build developments. However, CrowdToLive® is different, as it is an equity-based platform which does not involve mortgages, interest or debt.

CrowdToLive® is a new platform which is set to revolutionise the world of property crowdfunding by matching a Champion (a prospective homeowner) with investors, offering benefits to both parties. But what benefits does this platform bring to investors and prospective homeowners?

How does CrowdToLive® benefit the investor?

This innovative property investment platform allows investors to choose which properties to invest their money in, sharing the purchasing cost of the property with other investors. Investments can be as little as £100 or as much as the investor chooses, allowing a high level of flexibility.

This low threshold for investment means that the investor is able to easily build a diverse property portfolio, enabling them to split their investment over a range of properties if they wish to do so. Or, they can choose to put all of their investment into one property and enjoy larger shares in a single property.

CrowdToLive® allows investors to enjoy all of the benefits of being a landlord without the associated hassle. Any issues with the property are dealt with by the platform, leaving investors to sit back and receive their dividends each month. The risk of unpaid rent is also reduced as the Champion investment is pledged to investors in the case of unpaid rent.

How does CrowdToLive® benefit the homeowner?

CrowdToLive® allows a Champion to become a homeowner with as little as a 5% investment. Through the CrowdToLive® platform, the Champion is matched with investors who pay for the rest of the property, allowing the Champion to live free from both mortgage and debt.

As a Champion, you will pay rent on the portion of the property that you don’t own. However, unlike a typical rental property, the home is yours to make your own. You can paint the walls, change the carpets and put up pictures without needing to seek agreement from your landlord.

Providing the rent is paid, no one can ever ask you to leave your home, so you can feel secure in the knowledge that your house is your own. As a Champion, you are also free to increase your share in the property and reduce the rent that you pay.

How can I apply to join the CrowdToLive® programme?

If you’d like to apply to be an investor, click here.

To apply to be a Champion, click here.

Written by

RISK WARNING: Investing in property and property crowdfunding involves downside risks as well as the possibility of rewards and should be considered to be a long-term investment strategy. The downside risks could include a loss of capital, illiquidity and a lack of income. The investments should only be made as part of a diversified portfolio. The value of a property may fluctuate. There is no secondary market for investments made in unlisted securities and it may not be possible to sell your securities to third parties in a simple and timely manner, thus putting your capital at risk. Forecasts, estimates, and past performance data are not reliable indicators of future results. Investment made on the CrowdToLive® website site are not covered by the Financial Services Compensation Scheme (FSCS). Investing in the opportunities shown on this platform should only be made by investors who fully understand and appreciate the risks involved (please read the full risk warning here). Elite Capital and Management Services Limited takes no responsibility for any recommendations, estimates or opinions and will not in any circumstances advise individuals on the merits or risks of any investment or whether the potential investment is right for any individual. Any individual looking to make an investment should always seek independent advice before committing. CrowdToLive® is a product owned and promoted by Elite Capital and Management Services Limited, which is authorised and regulated by the Financial Conduct Authority (Reference Number: 822039). Elite Capital and Management Services Limited (Companies House number: 10347767) is registered in England and Wales with its registered office at Chester House, 1st Floor, Office 122, 81-83 Fulham High Street, Fulham Green, London, SW6 3JA