As with any newer approach to investment, property crowdfunding is gaining a lot of press at the moment. And while it’s a great time to get involved, it’s always worth taking a little time and thinking about your strategy. How do you start with crowdfunding like this and how do you make it work for you? There are a number of factors to consider.
Property is a physical, tangible asset
An important one is that property is a physical, tangible asset. And that can bring security during difficult times, with consistent income once it’s rented out. Obviously, there are still risks involved, but it’s worth looking at the long-term increases in property value in areas in which you’re interested in investing.
Diversity is always good
No matter the type of investments you make, diversity is always good. It can help to protect you against fluctuations, by making sure you have some investments more likely to retain value even in a crash. Doing this in the property market means investing in different areas, locations and sectors. A strong portfolio could include private rentals, student accommodations and business rentals, for example.
Invest as little or as much as you like
Investing in property by crowdfunding also means that you can invest as much or as little as you like, when you like. By drip-feeding money into your investments and diversifying, you can build a portfolio over time. This could help you to improve the amount of profit you make, or provide a more secure base for your investments. Tracking how much each property is earning could also help you learn more about the property market, without taking the risk of purchasing entire properties.
Access industry knowledge
It’s also worth bearing in mind that investing via property crowdfunding with a company like Brickowner also has another benefit – knowledge. Because they source properties using the expertise of the property management team, it means that you’re being guided through the process by capable hands. And, on top of that, their expertise and experience can result in opportunities to invest that may not be available otherwise.
The management company also means that tenants will be dealt with fairly and professionally, without you having to deal with the stress of working out how to solve their problems. In your early property ownership days especially, this could be a real bonus.
As properties gain in value, they earn more profit over time
While shares should be able to be bought and sold throughout your investment, they’re also intended to be long-term investments. As properties gain in value, they earn more profit over time. By building a diverse portfolio over that time, your investment could be helping you earn in the long-term as well. With regular profit, you can save for a deposit or potentially help build a long-term fund for children’s universities or a reliable income during your retirement.
Track performance over time
Whether short-term or long-term, the transparency of property crowdfunding is something you can easily make work for you. Not only can you research areas and properties before you invest, but you can also track property prices in the local area over time. This will help you evaluate how your investment is performing. This should help you either in terms of feeling secure or giving you the opportunity to further diversify your portfolio.
As with any investment, property crowdfunding has risks. But the amount of information out there on property prices, locations and historical information should allow you to make the most of your investment. Before you invest, do your research, plan what you want to achieve and work out what strategy works best for you.