Providing an alternative way to raise funds, a fairly new phenomenon - known as crowdfunding or peer-to-peer finance - works by pooling small sums from a large number of people, enabling them to collectively purchase property to later sell on for a shared profit.The House Crowd is one such company facilitating these collective property investments, stating that investors could earn a “12-14 per cent return … in just a few months” and “on longer buy-to-let projects … a 6 per cent annual dividend (net of maintenance, repairs, management and all other costs) plus a share of profits upon sale.”
According to The House Crowd’s website, the investor will purchase shares in an SPV (Special Purpose Vehicle) which is then used to buy a specific property the investor has agreed to fund – either a short term refurbishment and sell or a long term buy-to-let.
The House Crowd states that the “…profit is derived from the work we do and the value we add. It is not dependent upon any increase in general property values.”
Founded in 2010, the industry website, Crowdsourcing.org, is a neutral organization dedicated solely
to crowdsourcing and crowdfunding. As one of the most influential and credible authorities in the crowdsourcing space,
Crowdsourcing.org is recognized worldwide for its intellectual capital, crowdsourcing and crowdfunding
practice expertise and unbiased thought leadership.