If you are considering investing in property in order to grow your wealth, you may be aware of the ongoing rise in popularity – and the increasingly diverse range – of crowdfunding platforms dedicated to this purpose.
“Property crowdfunding” refers to a technique whereby a group of investors pool their resources in order to fund a project or to purchase an existing property from which they will then be able to earn dividends.
Investments of this kind are easy to arrange and manage remotely, and are often many times cheaper than more traditional methods. These are just a couple of the reasons why property crowdfunding has gone from strength to strength following the outbreak of COVID-19.
In this article, we explore a few recent and ongoing trends within the UK’s property crowdfunding community that may help you to make informed decisions regarding your own approaches and techniques.
Tokenisation
Some UK-based property crowdfunding platforms have been employing blockchain-based tokenization since 2019, when Smartlands introduced the concept.
Using this technique, fractions of a physical property may be converted into digital “tokens”. A single token may represent one square metre of property, for example, but there is a huge amount of flexibility here, both in terms of “portion sizes” and cost.
Tokens can be traded for other assets, and, with participants able to select almost any size of investment, the buy-in costs can be exceptionally low. This makes property investment more accessible than ever before.
Low-Investment Opportunities
UK property crowdfunding has gone from strength to strength in recent times, not least because of the huge real estate boom the country has experienced during the pandemic. The value of property investment has never been more apparent.
However, in many cases, COVID-19 has left many would-be investors with less capital at their disposal.
For this reason, opportunities with lower “buy-ins” are becoming steadily more popular. At present, it is possible to invest less than £90 to get started.
Automation and AI
As is the case with many other industries, remote tools and automation solutions have experienced a boom in popularity over recent years.
With more money being invested in these fields due to the ongoing need for social distancing, more sectors have been able to enjoy the convenience that AI and machine learning affords them.
In terms of property crowdfunding and other related industries such as residential / commercial property auctions, this means the adoption of tools that automatically search for suitable investment opportunities without any risk of duplication thanks to advanced vetting.
Commercial Property Crowdfunding
While up until recently, much of the available property crowdfunding opportunities have been related to residential buildings – with buy-to-let properties being among the most common – many businesses are now beginning to take note of the technique’s potential.
The ongoing reinvention of the workspace – including a move towards hybrid in office/from home approaches – means a potential new direction for business space and an overhaul in the commercial renting sector.
For this reason, it is likely that more and more opportunities for property crowdfunding are likely to spring up throughout the commercial sector in the near future.