Real estate crowdfunding site The House Crowd has announced surpassing the £2m investment point, proving popularity of their investment model among small investors. The House Crowd developed their successful online investment approach by matching residential property purchase to a crowdfunded investment.
Launched in 2012, The House Crowd delivers returns from property with less investment capital than conventionally required for property investing. The fact that participants may invest as little as £1000 and gain greater returns than most savings accounts and pensions has been central to take-up among investors. The company has focused on cash flow, rather than speculating on capital growth, by concentrating on purchasing traditional housing stock in areas of high rental demand in Manchester, UK.
In the last 18 months, 31 properties have been purchased, predominantly two bed terraces, and currently the company has placed offers on a further two houses.
“I am very pleased with the progress so far. The company is growing steadily, which is especially pleasing when you consider investors had no reference point before for a company like this.”
“We are happy they have seen the validity of this as an investment vehicle, and to be repaying their trust in us. It is a testament to what we do that many of our investors are now investing in every project we do and bringing in friends and family.”
“The only problem is that we are now getting over-subscribed very quickly for each project, and are sometimes having to return people’s money. But as problems go, it’s a good one to have.”
The House Crowd offer two pathways to potential investors: A profit share model which pays 6% a year plus a 50% profit share when the property is eventually sold, or a straight 7.5% a year. All fees are taken care of by the company, along with any required refurbishment of the investment properties, making this a completely passive property investment.
“We generally need around £63,000 to purchase and refurbish a property,” said Mr Fearnhead. “It used to take us 10-14 days to raise that amount each time, but now it is taking under a week. “In fact, the last project took just four hours to raise £70,000. It’s quicker than filling in a mortgage application.”