Property crowdfunding is a very recent concept, but one that has really caught on and seen explosive growth over the last few years. A brand new industry has sprung up in a short space of time, offering a staggering choice of crowdfunding platforms.
In this post, we will look at the current boom in property crowdfunding, and at a brand new tool that makes it quick and easy to find the right crowdfunding investment.
Why Is Crowdfunding Booming Right Now?
There has been a range of push-pulls fuelling the property crowdfunding/P2P lending boom. The miserly interest rates available on traditional bank deposits and the volatility that traditional investment areas suffered following the financial crisis of 2008 has pushed people to explore other places to put their cash.
In property crowdfunding, investors have found a relatively straightforward way to invest in ‘bricks and mortar’ that is hands off, easy to diversify in and quite often promises a juicy return.
Property Crowdfunding Today: What You Need To Know
The word “crowdfunding” itself was only coined in 2006 and one of the first property crowdfunding platforms in the UK, The Housecrowd, was only founded in 2012. Most property crowdfunding platforms, including some of the best known names, were only set up over the last two or three years.
As with any new industry, there have been success stories and failures. Lendy’s collapse in May 2019 and Property Moose’s self-imposed hiatus earlier this year has raised some warning flags as well as eyebrows.
Despite these setbacks however, the trend has very much been onwards and upwards with a clear proliferation in the number of property crowdfunding and property P2P platforms.
‘Investors face a huge range of options’
There are now over 30 different platforms providing debt and equity crowd fundraising in the UK. Newcomers British Pearl fired up in 2018 and just within the last few months, Buncecrowd and Leopropcrowd have launched.
The result is that new investors face a huge range of options. Having more choice is no bad thing, but it can also be somewhat overwhelming and difficult to know where to start. Some platforms offer only loans, some only equity and some offer both. A number of platforms operate in specific regions or niches, while others try to cast a wider net. The fee structures are different, the yield calculations can vary, there is a vast array of financing structures and it is easier to exit some investments than others.
How To Find The Best Crowdfunding Investment For You
In response to this problem, while looking into investing in property crowdfunding in late 2018, Guy Francis founder of Crowd Compare, had an idea. Guy explains: “Each time I sat down to research the options, I found more and more platforms that were variations on a theme.
“Rather than narrowing things down, it was the reverse: the more I looked, the more lost I felt.. Some sites had loads of investments, some only a small handful and a few of them had nothing. It gave me a headache!”
‘Investors can quickly and easily narrow down their options’
Guy saw a solution to this problem: what was needed was a property crowdfunding and P2P hub that lists investment opportunities from multiple platforms all together in one place. Something that would allow investors to quickly and easily view the options that are available and narrow down their search.
Finally, in the summer of 2019, Crowd Compare was launched.
The concept behind Crowd Compare is simple: Crowd Compare lists only opportunities that are open to investment – to cut down on the white noise – and everything can be filtered and sorted so users can zero in on what best matches their investment goals.
Guy adds: “We’ll also be periodically releasing articles to help better inform our users about the sector. The idea of Crowd Compare is to give property crowdfunding a ‘go to’ website and to help investors find their way while hopefully educating and informing them at the same time.”
Crowd Compare is free to use and you do not need to set up an account to access it.
If you’re in the market, Crowd Compare is worth a look. You can find Crowd Compare at www.crowdcompare.co.uk