Excellent news for the status of crowdfunding property investments this month as portals, consultants and service providers of the US crowdfunding industry came together to form the National Crowdfunding Association (NCFA).
Members of this professional organisation are united in the common purposes of promoting crowdfunding in America, educating the public about crowdfunding, establishing best practices for the industry and providing networking opportunities often linked to such associations.
Which got us atÂ www.http://thehousecrowd.com/thehousecrowd/Â – the UK’s first crowdfunding property investments company – thinking about the need for a similar organisation in the UK. Not only would such a body provide a valuable boost to our homegrown entrepreneurs, it would also ensure the UKâ€™s growing crowdfunding industry is supported, educated and protected, while reaffirming its position as an attractive option for budding entrepreneurs.
As a property investments company based on the crowdfunding model, we are great supporters of the crowdfunding movement in the US and hope the same growth is experienced here in the UK.
Eying up the hurdles that now face buy to let investments in this current climate Â – daunting. You may need to be an Olympic Â hurdler to overcome them and invest in property successfully. Â The main top five which stop many are as follows:
- Deposits are now as much as 25% to – larger cash injection.
- Valuations are not meeting sell price â€“ more cash to find.
- There are now large fees on arranging a mortgage â€“ more cash.
- Standard Variable rates are not in line with the base rate â€“ who is winning here!!
- Legal fees and all associated fees â€“ more cash.
Let us take an Â£85K house that is on the market â€“ and you get it for Â£80K (well done you may think). Based on a 20% deposit that is Â£16K to find for the deposit. Now along comes the valuer and he or she reckons that the property is only worth Â£75k and the mortgage company will only lend you Â£60K to buy the house â€“ leaving you out of pocket another Â£5K! The mortgage company says that they have a great rate at 4.99% (4.49 points above the current base rate) and they want to charge Â£2K for the honour of giving you such a high rate. (who is benefiting there then!) The associated legal fees are a variable butÂ on these type of buy to let investments you should set aside another Â£1K. When you get your tenant in, you have the usual expenses of which are obviously a variable â€“ but are time consuming and are by no means hassle free.
You will still need to shell out Â£24K.
Â£5K shortfall due to valuation
Â£2K for a mortgage arrangement fee
Â£1K legal fees
Not particularly attractive â€“ a fundamental reason for an alternative option!!!!!
Check our FAQs at The House CrowdÂ http://thehousecrowd.com/thehousecrowd/faqs/
Statistics outlined this week suggest worrying times ahead if you have made a property investment and become a private landlord. It has been reported that the number of tenants in severe financial difficulty climbed by over 10% in the first quarter of 2012, with almost 9,000 more tenants 2 months in arrears than in the last quarter of 2011.
However, it is not all doom and gloom, as despite these increases, tenancies in severe arrears represented less than 3% of all properties in the private rental sector in England and Wales in the first quarter of 2012.
Still, as we all continue to tackle the ever-tightening purse strings, we property investment entrepreneurs atÂ www.http://thehousecrowd.com/thehousecrowd/Â are confident that not only can we weather this storm, knowing that our investment is safe from tenancy issues such as these, as we can adapt and actually turn a profit whatever the property market conditions!
At The House Crowd we are opening property investment to the masses; however, in doing so we are also doing our bit to bring properties back to life and make them habitable. We are buying distressed properties and giving them life. This surely has a positive impact on an area. Our method requires investment in order to do this and our transparency in what we do is there for all to see.With this type of alternative investment, we have to raise funds to do what we do and those who contribute to the project will inevitably benefit as they have invested their money. What we offer is an alternative investment that is a Â win/win for all concerned. Homes that are left to perish are an unpleasant sight to many and at The House Crowd Â will bring properties back to life. Let’s face it the statistics speak for themselves 1.7 million families on housing waiting lists and we have almost 750,000 derelict properties in the UK. The House Crowd via its alternative investment can help in this process we support the Empty Homes Campaign http://emptyhomes.com/what-we-do-2/
We were very pleased this week to get an article about us and crowdfunding property investment published on the Daily Mail’s This Is Money website. We were less pleased with the trolls who decided to completely trash what we are trying to do without even bothering to try and understand it. Seems to me these people must have had some pretty bad experiences to end up with such a bitter cynical view of life. Still, on the plus side, we also had a number of very positive emails as a result of the article and several new investor applications. We are now well on our way to making our first crowdfunded property investment and are going to view some potential investment properties this afternoon.
Today is the official launch of the world’s first crowdfunding property investment company. (That’s us by the way).
If you haven’t heard of crowdfunding before and want to know more you can read all about it on Wikipedia. We hope you all agree it’s a great idea that can help people achieve much better returns on their savings and do so without giving the leeches “ who’ve just decided to put up their standard variable mortgage rates – any business.
Question:Can someone please tell me what the point of signing an agreement that allows one side (i.e. the banks) to alter the agreed rate payable whenever they feel like it.
Seems somewhat unfair to me.
Joint Ventures Property Investment
Back in 2012, when we were first starting out, we were the first to offer the property crowdfunding investment model. At that time, things were very different to how they are now. Just take a look at this quote from our blog back in March 2012:
“I’ve just been lurking around the property investment forums such as Property Tribes. There seem to be some interesting discussions about joint ventures in relation to property investment but some scepticism about the partners involved, especially as they all seem to charge fees in one way or another.
Not a true joint venture in my opinion.
Hopefully, people will realise we offer a simple, transparent way they can participate in a genuine joint venture and invest in property for mutual benefit.”
This is an example of what we were thinking about back in 2012 when we first launched.
However, since that time, we are pleased to have seen the property crowdfunding market catapult in popularity. Indeed, people did wake up to the simple, transparent joint ventures in property investment that we offered. So, too, did many other property entrepreneurs, who began mimicking our model and setting up their own property crowdfunding and P2P platforms.
Now, the industry is worth billions worldwide. We are proud to have been the first, and still the leaders, in offering a way to invest in a diverse portfolio of property with the potential for high returns.
Find out more by registering with us, or view our property investments directly:
Big thanks to all our friends and colleagues who turned up on Sunday and braved the cold in House Crowd t-shirts for our photo shoot. Although it was freezing, we managed to narrowly avoid the rain and Chris Bull, the photographer took some great shots.
To see more visit the housecrowd facebook page and don’t forget to click the like button whilst you’re there.