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Investing in the UK property market is reliably good investment strategy. In fact between 2000-2016 property prices increased by 52 per cent, compared to the FTSE 100 which rose by less than 15 per cent over the same period (Property Price data from Nationwide’s House Price Index).
Property crowdfunding uses the latest technology to take traditional property investment to into the 21st century. Property crowdfunding platforms allow investors to purchase a share of a property like they would purchase a share of company on the stock-market. Investors then receive rental income monthly and benefit from their share of potential capital appreciation.
Sounds simple enough, but the benefits of investing in this manner are far reaching. Here are five reasons why property crowdfunding is a top 10 investment strategy for 2018.
Normally property investment requires a large upfront deposit, however crowdfunding platforms let you start with much smaller amounts - some platforms have minimum investments of just £20. This makes property crowdfunding great for investors without big bucks, and small monthly investments can snowball into a sizeable nestegg over a number of years.
Traditionally the process of buying a property is far from quick, and it can be months before a property is tenanted and earning a return. With crowdfunding platforms, such as UOWN, you can buy into properties that are already income producing. This means you can be accumulating rental income within minutes.
Property ownership and management can be a full time job, especially keeping abreast of the steady stream of new regulations. While this may be an option for some people, many of us just don’t have enough spare time. With property crowdfunding all the hassle is taken out of the process and you can sit back and watch rental income arrive in your account each month. UOWN offers returns of 7 per cent from rental income alone, in addition to any potential capital appreciation or depreciation.
Many traditional property investors save their earnings from one property until they have enough money for the deposit on another property, and with the size of property deposits this can entail a long wait. With crowdfunding the wait to reinvest your earnings almost vanishes as rental income paid one month can be reinvested immediately and feed into a larger rent payment the next month.
This is the key to any good investment strategy, and it’s common sense never to put all your eggs in one basket. Diversifying your investment across multiple properties means that you are far less susceptible to temporary property vacancies, or a slow down in a particular region. Property crowdfunding allows for simple diversification because the minimum investments are so low.