Properties faq
Investors faq
November 22, 2019
Earn 22% fixed return over 24 months with Crowdfunding Place
November 23, 2019Frequently asked questions
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Properties
1Valuing the property
Before we put any property on the portal most times we will speak with independent RICS valuer and local estate agents to assest property valuation in purchasing condition.
2Structural survey
In cases where we have any initial indications in regards to structural defect, we always do full structural survey.
3Legal Pack
An experienced solicitor provides a whole conveyancing process and check legally that property is sound.
4Rental Assessment
Before we offer property on our portal experience management company providing to us full informations in regards to rental assessment of property and area.
5In House Assessment
Each property deal on Crowdfudning Place is like our own one. We do full deal assessment taking into consideration all potential scenarios and issues which may arise.
Why property crowdfunding?
1Searching for the property
Hands free property investing.
Property Crowdfunding is like investing with property experts. You benefit from their expertise and contacts.
Property Crowdfunding is like investing with property experts. You benefit from their expertise and contacts.
2Risk
By spreading risk your available capital over the number of properties you can mitigate the risks associated with property investment. On top of this majority of properties are purchased below market value to eliminate risk to absolute minimum.
3Leverage
You can leverage more safely using power of the crowd, but the profits from capital growth will be shared. On top of this we could you gearing ( special mortgage ) to increase options of profit for our investors.
Gearing ( special mortgage for SPV Company ) is not based on investors credit score and DO NOT required personal guarentees from investors. There is 100% security that investor NEVER HAVE TO put any more money into investments and DO NOT need any additional security in way of extra property or share legal charges.
Gearing ( special mortgage for SPV Company ) is not based on investors credit score and DO NOT required personal guarentees from investors. There is 100% security that investor NEVER HAVE TO put any more money into investments and DO NOT need any additional security in way of extra property or share legal charges.
4Liquidity
You can sell your shares to a third party at any time (subject to finding a willing buyer) using Crowdfunding Place portal, promoting on your portal web page or by any other mean which suit you.
If you dont want to sale your share you need to wait until agreed time period stated in offering when property will be sale on buy back option or on open market.
If you dont want to sale your share you need to wait until agreed time period stated in offering when property will be sale on buy back option or on open market.
5Control
You can select which properties you invest and 24/7 have online access to your investment.
6Fees
There no fees to pay individually but there will be added to the amount needed to buy the property and the crowdfunding platform will also make charges for raising the money and managing the assett.
7Due Diligence
Property professionals vet all investments. This pre-qualification and due diligence reduces the possibility of bad investment. Expierenced team of people who knows property market well plus secured managable approach to each investment provide peace of mind for our investors.
8Finding and managing builders and tradespeople
Crowdfunding is hands free investing
9Finding and managing tenants
Hands free investing. Crowdfunding Place offerings also include underwritten rent.
10LANDLORD - INVESTOR difference?
Investors assume an investment role only and receive an equity stake in the propertyhold by SPV company in return for their investments.
Landlords manage the property as well as receiving a stake in relation to their property investment. We could say Landlord is kind of business to run and to manage.
As Investor you don't need to worry about landlord regulations. As well as as property is always hold under SPV company as per current tax regime in UK there is option to offset interest from mortgage ( gearing ) again rental profit where as individual landlord there is not this important option avaiable. As well as individual landlord HAVE TO deal with BTL Mortgage, Landlord Insurance provider and many other aspects of property business.
Due diligence process
1Searching for the property
Hands free property investing.
Property Crowdfunding is like investing with property experts. You benefit from their expertise and contacts.
Property Crowdfunding is like investing with property experts. You benefit from their expertise and contacts.
2Risk
By spreading risk your available capital over the number of properties you can mitigate the risks associated with property investment. On top of this majority of properties are purchased below market value to eliminate risk to absolute minimum.
3Leverage
You can leverage more safely using power of the crowd, but the profits from capital growth will be shared. On top of this we could you gearing ( special mortgage ) to increase options of profit for our investors.
Gearing ( special mortgage for SPV Company ) is not based on investors credit score and DO NOT required personal guarentees from investors. There is 100% security that investor NEVER HAVE TO put any more money into investments and DO NOT need any additional security in way of extra property or share legal charges.
Gearing ( special mortgage for SPV Company ) is not based on investors credit score and DO NOT required personal guarentees from investors. There is 100% security that investor NEVER HAVE TO put any more money into investments and DO NOT need any additional security in way of extra property or share legal charges.
4Liquidity
You can sell your shares to a third party at any time (subject to finding a willing buyer) using Crowdfunding Place portal, promoting on your portal web page or by any other mean which suit you.
If you dont want to sale your share you need to wait until agreed time period stated in offering when property will be sale on buy back option or on open market.
If you dont want to sale your share you need to wait until agreed time period stated in offering when property will be sale on buy back option or on open market.
5Control
You can select which properties you invest and 24/7 have online access to your investment.
6Fees
There no fees to pay individually but there will be added to the amount needed to buy the property and the crowdfunding platform will also make charges for raising the money and managing the assett.
7Due Diligence
Property professionals vet all investments. This pre-qualification and due diligence reduces the possibility of bad investment. Expierenced team of people who knows property market well plus secured managable approach to each investment provide peace of mind for our investors.
8Finding and managing builders and tradespeople
Crowdfunding is hands free investing
9Finding and managing tenants
Hands free investing. Crowdfunding Place offerings also include underwritten rent.
10LANDLORD - INVESTOR difference?
Investors assume an investment role only and receive an equity stake in the propertyhold by SPV company in return for their investments.
Landlords manage the property as well as receiving a stake in relation to their property investment. We could say Landlord is kind of business to run and to manage.
As Investor you don't need to worry about landlord regulations. As well as as property is always hold under SPV company as per current tax regime in UK there is option to offset interest from mortgage ( gearing ) again rental profit where as individual landlord there is not this important option avaiable. As well as individual landlord HAVE TO deal with BTL Mortgage, Landlord Insurance provider and many other aspects of property business.
Property investments criteria
1What criteria does property has to meet to be funded?
Property has to be accepted as the sound investment by our Investment Team.
We look at following criteria:
We look at following criteria:
- location of the property
- price of the property
- rent demand in the area
- potential of capital growth
- property condition
2Location
Location is the probably the most important factor in investing in properties in UK.
Investment Team.
We aim to invest in prime location where there is a great potential for capital growth. Traditionally there is a greater capital growth in prime locations in opposite to poorer ones.
We aim to invest in prime location where there is a great potential for capital growth. Traditionally there is a greater capital growth in prime locations in opposite to poorer ones.
3Price - below market value
The price has to be right. Generally we aim to buy 10%-15% below market value which gives extra profit from the day one. The higher discount the better. Our great position is that we are cash buyer with good reputation and can buy property quickly. It gives ability to secure even further discount.
We always buy property below market value. However it can make sense to invest in prime locations with small discount on sale if there is a great capital growth potential.
We always buy property below market value. However it can make sense to invest in prime locations with small discount on sale if there is a great capital growth potential.
4Rental demand
As we will keep properties before selling in future we need to make sure that there is a steady rental demand from tenants. Before investing we do local market research to make sure we will find tenent and how much rent will be.
5Capital growth
It is big one. Capital growth provides a very nice profit on investment. Therefore we may go for a potentially higher capital growth even at the expense of lower rental yield. As on many deal which have we use gearing ( mortgage for SPV company ) this feature even more increase pottential of extra profit from capital growth.
6Exit plan
Each property has a defined exit plan when is funded on Crowdfunidng Place.
It might be resale on open market or buy back option by a third party. Exit plan has to clear and realistic.
It might be resale on open market or buy back option by a third party. Exit plan has to clear and realistic.
7Property condition
Every single property we offer on Crowdfunding Place have to have satisfactory condition as per list of requrements checked by our investment team.
Property valuation
1Valuation at the time of purchase
All valuations are carried out by local RICS valuers. There are carried out before funding starts.
2Exit valuation
In three months before sale of the property or SPV the property is valued by RICS valuer.
Then before sale proceedings starts all shareholders are asked if they wish to sell property or to keep it longer.
Then before sale proceedings starts all shareholders are asked if they wish to sell property or to keep it longer.
Range of property investments
1Land
Land is property or real estate, not including buildings or equipment, that does not occur naturally. Depending on the title, land ownership may also give the holder the rights to all natural resources on the land.
Selling land results in a capital gain or loss. Land ownership does not contain or include any permissions to develop the property, as opposed to a 'plot', which is a real property that is slated for development.
Selling land results in a capital gain or loss. Land ownership does not contain or include any permissions to develop the property, as opposed to a 'plot', which is a real property that is slated for development.
2House
A house is a building that functions as a home. Modern houses in Western cultures will contain a bedroom, bathroom, kitchen or cooking area, and a living room.
Traditionally house provides with the best capital gain over the long term however their rental yield is lower in compare to other Property Investments.
Traditionally house provides with the best capital gain over the long term however their rental yield is lower in compare to other Property Investments.
3House in multiple occupation
An HMO is a term that applies to any living accommodation occupied by 3 or more unrelated persons as their only or main residence, and who share kitchen and/or bathroom facilities.
HMO provides a greater rental yield then a standard single let property. However there are number of council requirements which each HMO Property needs to met before being let out.
HMO provides a greater rental yield then a standard single let property. However there are number of council requirements which each HMO Property needs to met before being let out.
4Flat
Flat (or apartment) is a self-contained housing unit that occupies only part of a building.
Typically flat is rented out to professionals or to young people. Typically rental yield is slightly higher then for a Residential house as the flats prices tends to be lower then for houses. Each flat owner needs to pay service charge and ground rent.
Typically flat is rented out to professionals or to young people. Typically rental yield is slightly higher then for a Residential house as the flats prices tends to be lower then for houses. Each flat owner needs to pay service charge and ground rent.
5Serviced apartment
A Serviced Apartment is a fully furnished apartment available for both short-term as well as long-term stays, providing all the hotel-like amenities. Serviced apartments typically include soft-furnishings and cooking utensils so that long-term tenants need not to bring their own, and have services such as housekeeping, front office and parking included in the rent.
A serviced apartment provided higher rental yield in compare to standard flats if let all the time.
A serviced apartment provided higher rental yield in compare to standard flats if let all the time.
6Hotel room
A hotel is an establishment that provides lodging paid on a short-term basis. Facilities provided may range from a basic bed and storage for clothing, to luxury features like en-suite bathrooms. Larger hotels may provide additional guest facilities such as a swimming pool, business centre, childcare, conference facilities and social function services. Hotel rooms are usually numbered (or named in some smaller hotels and B&Bs) to allow guests to identify their room.
Hotel room can provide high rental yields if manage properly and fully let.
Hotel room can provide high rental yields if manage properly and fully let.
7Commercial property
The term Commercial Property refers to buildings or land intended to generate a profit, either from capital gain or rental income.
Commercial property can include office buildings, industrial, retail, restaurants and others.
Commercial property can include office buildings, industrial, retail, restaurants and others.
Property management & maintenance
1 Letting agency and management company
We only choose well established experienced and local letting agencies or management companies to manage our properties.
2Property management and rent collection
We use the same letting agencies or management companies to let and also to manage the properties.
3Home insurance
We use whole of market FCA regulated expierence insurance broker in order to get possibly the best deal for landlord insurance, commercial insurance and other if need it. We make sure to have in place policies to provides protection against most risks to property, such as fire, theft and some weather damage as well as loss of rental income.
4Underwritten rent and minor repairs
Depends on underwritten rent agreement some third parties cover small repairs up to £500 annually. It gives extra savings to investors on possible expenses. We are collecting fund which is 5% of guaranteed rental income. Reason to do so is to cover yearly expences such as accountancy fees, building insurance and extra property maintance costs. After investment is sold any surplus of funds from property fund is returned to investors together with initial investment and potential capiatal gain profit.
5Rent guarantee insurance
It is a form of insurance where for a relatively small annual fee investor can protect against loss of rent. Normally Landlord Rent Gurantee is combined with Legal Assistance Insurance whereby a landlord's legal costs of recovering rent and/or eviction a non-paying tenent are covered.
Typically rent payment is covered for period for up to 6 months and payment starts after 1 month of lack of payment by lender.
Typically rent payment is covered for period for up to 6 months and payment starts after 1 month of lack of payment by lender.
Underwritten rent
1What is underwritten rent?
A third party is contracted with the actual owner of the property to pay an underwritten rent for an agreed time period (which is usually 1-5 years). The third party takes complete responsibility for the property. Since the rent is agreed for the time period, depending on the property and third party, the recurring costs such as maintenance and utility costs can also be part of the contractual agreement.
2Why underwrite?
Underwriting rent is done mostly to make good the void period that owners go through. With maintenance becoming part of the contract in most underwritten rental properties, the risk of having to spend money till another tenant arrives is compensated. It offers a risk balance to the landlord and moreover provides a consistent and visible income stream.
3Who can underwrite rent?
We use property management firms, letting agents and local councils to underwrite rent.
Property investment studies (educational examples)
1Mr Smith
Mr Smith is teacher. He has savings of £30000 and looking for a secure investment with decent income. Currently he holds savings in ISA which gives very little income.
Crowdfunding Place is the chosen investment platform due to following reasons:
Mr Smith divided his savings into 4 different class Properties in portal. He is happy with service and financial side and also enjoy feeling That he owns number of properties.
His return from rental income across 4 properties which he invested in is 8% and he expecting capital growth after 5 years in region of 30%.
Investment of £30000 made a total profit of £21000 over 5 years time
Crowdfunding Place is the chosen investment platform due to following reasons:
- realistic returns regular returns
- investment secured on the property
- option to withdraw by sale of shares on portal
Mr Smith divided his savings into 4 different class Properties in portal. He is happy with service and financial side and also enjoy feeling That he owns number of properties.
His return from rental income across 4 properties which he invested in is 8% and he expecting capital growth after 5 years in region of 30%.
- annual rental income: £2400
- rental income over 5 years: £12000
- capital growth over 5 years: £9000
- total profit over 5 years: £21000
Investment of £30000 made a total profit of £21000 over 5 years time
2Kasper
Kasper is student to wish to invest his hard earned cash into property. He struggles to get a mortgage and additionally his savings are £10000 which not sufficient for a deposit for house.
He aims to keep saving towards purchase his property however until then he want to enjoy being a Landlord even if it is only limited.
The main attraction to Kasper is the fact that all investments are secured on Property and also that he has ability to sale Shares at any time. He spreads his £10000 over three properties and additionally plans to Invest All his future savings into further properties on CrowdfundingPlace.
Kacper after first year received combined return from his property investments of £860 gross and he is looking to sale his shares next year with 9% capiatal gain on it.
The main attraction to Kasper is the fact that all investments are secured on Property and also that he has ability to sale Shares at any time. He spreads his £10000 over three properties and additionally plans to Invest All his future savings into further properties on CrowdfundingPlace.
Kacper after first year received combined return from his property investments of £860 gross and he is looking to sale his shares next year with 9% capiatal gain on it.
- annual rental income: £860
- capital growth over 1 year: £900
- Total profit: £1760
3Mrs & Mr Iqabal
Clients received an inheritance of £100000. Clients are both working as doctors and have hardly any time to invest their money and also not enough knowledge to do so.
Property in clients view are the safest option and all investment they would like to be secured against the property. As they don't have time and experience to be a landlord themselves and also believe in diversification Crowdfudning Place is the good option for them.
The investment was made across 5 properties £20000 each. Term on each investment was 3 years and they all were with 8% underwritten rent. All properties are going to be sold after 3 years with 20% capital raise.
Property in clients view are the safest option and all investment they would like to be secured against the property. As they don't have time and experience to be a landlord themselves and also believe in diversification Crowdfudning Place is the good option for them.
The investment was made across 5 properties £20000 each. Term on each investment was 3 years and they all were with 8% underwritten rent. All properties are going to be sold after 3 years with 20% capital raise.
- annual rental income: £8000
- rental income over 3 years: £24000
- cpital growth after 3 years: £20000
- total profit over 3 years: £44000
Pension SIPP property investment
1Can I invest using my SIPP funds?
Yes use can invest using SIPP fund. You can only invest into commercial property investments.
2How I can invest using SIPP funds?
You need to contact your provider and Crowdfunding Place member of staff for more information.
3Where my profits are going?
Profits goes to your pension fund.
4Do I pay tax from profits of my SIPP funds?
Current regulation and UK tax regime provide tax free investments into SIPP.
5Who can advice me about SIPP investment?
We not provide financial advice, to get advice and infroamtion please contact Independent Financial Advicer. We could recommend one for you if you wish so please contact us.
6Can I invest pension money based abroad?
Yes you can, for more information please contact your pension provider.
