How to get the most from crowdfunding

By Pippa Thompson

Creating your very own buy-to-let property portfolio is now more hassle-free than ever before, but how does it work?

Crowdfunding is the practice of individuals coming together to fund projects, companies or assets collectively. It may be that someone is raising finance for a start-up, a new product, or for a local cause that they believe in. As part of a Crowd, more opportunities are available because a large fund can be created with smaller contributions from many investors.

PropertyMoose.co.uk is the home of UK property crowdfunding. Combining market leading technology with unrivalled access to off-the-market property stock, members from 23 countries are embracing the potential benefits of PropTech.

After creating an account and passing an investor eligibility questionnaire, members can self-select the properties that they want to invest in. With investments starting from £500, investors have the opportunity to easily diversify their portfolio geographically, or make their first step onto the UK property ladder without a large deposit.

The properties are sourced by Property Moose using strict criteria. All financial information about the property is given, including a full description of the opportunity and any renovation work that may be required.

When a property becomes 100% funded, investors are each awarded a legal share certificate in a Special Purpose Vehicle. This is a subsidiary company that holds the property and has an asset structure and legal status that makes its obligations secure.

Property Moose will start searching for a tenant as soon as a property is acquired. Investors will receive monthly income derived from the rent payments proportional to their share of the property. In this way, the Crowd that owns the property enjoys the upside of regular income, without the hassle of dealing with tenants.

When the property is sold at the end of the defined investment term, the shareholders will share in any of the capital growth in the investment. Property Moose source all of their investment opportunities in areas with predicted high growth, optimising the possibility of strong returns.

The ease of creating a diverse buy-to-let portfolio, and being able to enjoy the regular income and potential upside, means property crowdfunding will become increasingly popular with investors. Add to this the ability to create a large portfolio without the day-to-day management implications, the industry looks set to get more support from those looking to make their money work for them more effectively.

For more information visit propertymoose.co.uk.

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