Why crowdfunding can transform the way people invest in property

Wealth Migrate has scored big with the Category I crowdsourcing licence it was awarded by the Financial Services Conduct Authority (FSCA) recently, and it is good news for local investors too.  The licence allows Wealth Migrate to provide its crowdfunding offering on an intermediary services basis using shares as a financial product category.  Wealth Migrate CEO Scott Picken says: “We now have the required approval and licensing from the FSCA that allows us to offer our crowdfunding business model to investors.”

The biggest impact that crowdfunding makes is that it allows more people to invest in property. A group of people get together to fund a project or venture, so even if individually they do not have the cash to invest, collectively they do. Crowdfunding is usually performed online, with three groups involved in the process – the project initiator who proposes the idea and/or project to be funded; the individuals or groups that support the idea; and a moderating organisation that brings the parties together to launch the idea.

Crowdfunding changes the lay of the investment land in many ways, including:

• The process cuts the time it takes to raise finance when compared with more traditional routes.
• Using an online platform to pitch the project feeds into the marketing process.
• Sharing ideas online gives investors access to feedback and guidance from others.
• The online platform means you may attract different, maybe less conventional, investors.
• Crowdfunding is an alternative to bank loans or traditional funding, which can be difficult to secure.

Every platform has its own rules in terms of minimal investments, but in the UK, where property crowdfunding has taken off, you can join a group of investors for as little as £100. Local investors eager to join this phenomenon can learn from the mistakes of other investors, thus minimising the possible risks involved.

When choosing a platform, consider the following:

• The type of investment they favour.
• The fees that are charged and how they are calculated.
• The platform’s investment track record.
• How the customer service people treat you, as a potential investor.

Each member of the group must do their own thorough research into the deal, making sure it makes good business sense.  Online investing platform Wealth Migrate may have just got a licence, but it has many years of experience in investing in offshore property and has a good track record of doing thorough research into every deal it joins.