Regular readers will know that my main writing clients these days are More Money Review. I review business opportunities and also write articles for their website and newsletter.
One thing I have written a lot about recently is the extra income possibilities offered by crowdfunding. This is something I have developed a particular interest in, so I thought today I would say a bit about one particular aspect, property crowdfunding.
Clearly, I appreciate that not all readers of my blog will be interested in investment opportunities just now, but you never know when a competition prize or big advance from a mainstream publishing house may arrive (see this recent guest post from author Iain Maitland for some inspiration). And, more prosaically, you may inherit some money and be looking for more interesting and lucrative investment opportunities than simply putting it in a savings account for the derisory levels of interest currently on offer.
Why Property Crowdfunding?
Investing in bricks and mortar has long been a favourite strategy of the wealthy. Property owners get a double benefit: rent from tenants for as long as they own the property, and – in most cases – a healthy profit if they choose to sell.
Of course, property doesn’t come cheap. And even if you can stretch to buying a modest house or flat for investment purposes, you are taking the risk of putting all your eggs in one basket. As a result, many people of more modest means have concluded that property investment is not for them.
Crowdfunding is changing all that, however. A growing number of platforms now exist that allow ordinary folk the chance to buy a share in an investment property for as little as £50. Investors then receive a proportion of the rental income generated, and also get a share of the profit when and if the property is sold.
I now have investments via three different property crowdfunding platforms – a block of flats in Torquay in which I own a small share is pictured above! – but in this post I want to focus on one platform in particular, the UK-based Property Partner. This was only launched in January 2015, and has swiftly become the UK’s largest property crowdfunding website. They have over 6,235 investors, who between them have invested over £24 million in properties across the UK. Non-UK investors are welcome to join Property Partner too, so long as the legal system in their country permits it. Unfortunately, US residents are not able to invest this way at the moment.
One big attraction of Property Partner is that they have an active secondary market. That means investors can offer part or all of their portfolio for sale at any time.
Obviously, to sell your shares in a property you will need a buyer, but Property Partner say that so long as they are priced reasonably (i.e. at or below the current official price) shares normally sell within 72 hours. By contrast, other property crowdfunding platforms such as The House Crowd and CrowdLords do not run secondary markets, though they say they will always help would-be sellers find a buyer if required.
Another attraction of Property Partner is that dividends are paid monthly, unlike other platforms which typically pay annually. Money from dividends builds up in your account, and you can either withdraw it or reinvest it in other properties. When you add that you can get started on Property Partner for as little as £50, it is not all that surprising to me that they have enjoyed such success.
Clearly, I’m not saying that everyone should invest in Property Partner – that depends on your personal circumstances and investment goals, and you should always take professional advice if you have any doubts before investing. But if you are looking for a property crowdfunding platform to invest with, in my view they should definitely be at or near the top of your list.
Finally, as a further incentive, if you join Property Partner via any of the links in this article and invest at least £1,000, you will receive an extra £50 (and so will I!). This is a special promotion and may of course be withdrawn at any time. I am not aware of any plans to end this offer currently, but if that happens I will of course amend this post accordingly.
Good luck, and if you have any comments or questions about property crowdfunding and/or Property Partner, please do post them below.