PropertyMoose
Property Moose
Premium Member
Is there a chance that property crowdfunding will replace traditional property investment? Will one become more common than the other?
Will property crowdfunding completely replace traditional property investment?
R
realdeals
Active Member
It is difficult to say whether crowdfunding will replace traditional property investment as this may not be for everybody. However, it should certainly put pressure on traditional transaction costs to the benefit of all property investors.
Nicholas Wallwork
Editor-in-Chief
Staff member
Premium Member
I think it's a nice way to get into property investing with less capital. It's also a great way to invest "hands off" but with some good control of your investment.
Nicholas Wallwork
Editor-in-Chief
Staff member
Premium Member
I don't think it will replace traditional property investment as by being more hands on you can achieve a higher return so this isn't for everybody. It's for more hands off style investors who don't have the time for traditional property investment but still want access to that investment asset class... I think it will run along side and be a nice diversification to a larger portfolio as well.
L
Longterminvestor
Administrator
You could pick up a very diverse property portfolio using crowdfunding for a relatively small amount of money. As Nick said, nice way to dip your toe into the water.
PropertyMoose
Property Moose
Premium Member
Really interesting points!
When investing, diversification might be considered as the secret to mitigating market unpredictability and reducing portfolio loss. However, as it could take decades to save up for a single house deposit, even the individuals that could purchase property might be limited to buying one or a small number, reducing their ability to build a diverse portfolio.
Property crowdfunding provides a potential solution to this, too. Let’s say for example that you liked the look of property as an asset class, but only wanted to devote £1,000 to it. By investing through a property crowdfunding platform, where the minimum investment was as little as £10, you could potentially spread your capital across a variety of investments.
In addition, traditional property investment requires a certain degree of financial and legal expertise. The system is arguably antiquated and a bit of a headache. Some property crowdfunding platforms will handle these drawbacks, admittedly for a fee, but some investors might find it’s a price worth paying if it means avoiding the hassle.
Remember, property crowdfunding involves risks.
When investing, diversification might be considered as the secret to mitigating market unpredictability and reducing portfolio loss. However, as it could take decades to save up for a single house deposit, even the individuals that could purchase property might be limited to buying one or a small number, reducing their ability to build a diverse portfolio.
Property crowdfunding provides a potential solution to this, too. Let’s say for example that you liked the look of property as an asset class, but only wanted to devote £1,000 to it. By investing through a property crowdfunding platform, where the minimum investment was as little as £10, you could potentially spread your capital across a variety of investments.
In addition, traditional property investment requires a certain degree of financial and legal expertise. The system is arguably antiquated and a bit of a headache. Some property crowdfunding platforms will handle these drawbacks, admittedly for a fee, but some investors might find it’s a price worth paying if it means avoiding the hassle.
Remember, property crowdfunding involves risks.
