Does anyone use property crowdfunding?

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Neil
Posts: 3
Joined: December 27th, 2016, 9:41 pm

Does anyone use property crowdfunding?

Postby Neil » December 29th, 2016, 12:29 pm

After selling out of my open ended property funds around referendum time I've been experimenting with some of the new property crowdfunding sites (e.g. Property Partner, Property Moose, The House Crowd). Wanted to see if others have any views on this?

For me, it's nice to have the control and transparency to see each individual investment, and obviously a lot less work than a manual BTL. However there seems to be a 'translucency' over fees that cut into profits.

Generali
2 Lemon pips
Posts: 160
Joined: November 4th, 2016, 8:20 am

Re: Does anyone use property crowdfunding?

Postby Generali » December 31st, 2016, 3:46 am

Neil wrote:After selling out of my open ended property funds around referendum time I've been experimenting with some of the new property crowdfunding sites (e.g. Property Partner, Property Moose, The House Crowd). Wanted to see if others have any views on this?

For me, it's nice to have the control and transparency to see each individual investment, and obviously a lot less work than a manual BTL. However there seems to be a 'translucency' over fees that cut into profits.


I took Property Partner at random and on its 'How it works' page:

https://propertypartner.co/howitworks/howitworks

The company states it has a 2% fee on initial investment plus 10.5% + VAT in ongoing fees on rents.

When you sell they don't take any money to sell on your behalf but if you sell within 5 years you have to sell to another investor via the platform.

After 5 years you can sell at a price determined by an apparently independent surveyor (but one that has been paid by Property Partners so one that has a clear conflict of interest) to another investor. If that doesn't work the property is put up for sale on the open market and you get your share if/when the property eventually sells.

TBH I think it has all the disadvantages of BTL as an investment class (risk concentration, high costs, illiquidity) and none of the advantages (ability to add sweat equity, can time entry and exit). If you're interested in this as an investment I reckon you're far better off being Property Partner than you are investing through Property Partner.

NeilOne
Posts: 3
Joined: November 4th, 2016, 10:59 am

Re: Does anyone use property crowdfunding?

Postby NeilOne » January 1st, 2017, 3:13 pm

I have used PropertyPartner for about a year , though just for a bit of diversification, as its just a small proportion of total funds. I have never owned a BTL though, so not sure if the extra fees are worth the reduction is hassle.


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