Crowdfunding – Two Sides

Apart from setting up some direct debits for various charities, I’ve not withdrawn or used any of the profits that I’ve made via matched betting. I’ve just let the funds accumulate across my current account, my exchange accounts and the various gambling accounts.

In June, I finally invested £100 of the profits but I opted to do something different. theFIREstarter’s post reminded me of something that I had looked at previously but not gone for – I decided to invest a little in property crowdfunding.

Property crowdfunding “allows people to invest in buy-to-let properties without having to take on the additional responsibilities that come with being a landlord”. So says the blurb. Anyway, here’s a better explanation of what property crowdfunding is all about.

If I had a wedge of spare capital, I would probably be tempted to buy another little BTL property but I don’t, so property crowdfunding interested me when I first heard about it.

Some of the property crowdfunding websites required a minimum of £1000-£5000 investment but I went for Property Moose*, where the minimum investment is just £10.

propertymoos

So basically, you pick an available property from the website, invest your money with a load of other people to buy ‘shares’ in the property. When the property is tenanted, you start earning ‘monthly rental’ based on the number of shares you own.

Rental income seems to vary from around 5% – 7%. With Property Moose, most properties tend to be in the north/northwest, with only a few in London. Said properties tend to be ones which require renovation and you are able to see the progress of the renovations via photos posted on the website.  At the end of the fixed investment term (ranging from 1-3 years), the property is sold and proceeds are shared amongst the investors (subject to their share and less costs and expenses), although it appears that investors are able to vote to retain the property for a further year.

Property crowdfunding is not without its risks – I view it along the same lines as P2P  – still pretty new, regulated but not covered by the FSCS (Financial Services Compensation Scheme) so I’ll not be investing a huge amount in this.

Since that initial investment, I’ve chucked some more matched betting profits at Property Moose.  I think there’s still some life left in investing in property (yes, despite Brexit and the doom and gloom about property bubbles) so will be continuing to build on this investment bit by bit and will update with the rest of my portfolio.

Another Side to Crowdfunding

I came across Kiva a while ago but decided to revisit when I was looking for charities to support recently.

kiva

Kiva is a charity platform which aims to support people from poorer countries via crowdfunding loans. Deki is another platform, which I hope to have a look at again.

So how does it work? First, a borrower applies for a loan. Usually, loans are to start or grow a small business, used to go to school/further education or simply to be able to live in better conditions.

The loan, after it’s approved is crowdfunded by other lenders, in $25 increments.

Repayments of the loan are made on a monthly basis and such repayments can then either be withdrawn or used to fund other loans.

My first Kiva loan was to a woman from the Philippines who wanted to build a sanitary toilet for her family…. such things that we take for granted…

So, different sides to crowdfunding – I hope to make some money on the one side, and hope to help improve someone’s life a little on the other.

[*Referral Link – edited 16/09/16]