Investing in Property Through Crowdfunding: A Deep Dive into CrowdToLive

Investing your money wisely is crucial for building wealth, and two popular avenues are property investment and crowdfunding. But what if you could combine both? Enter CrowdToLive, a platform that merges these two investment strategies, allowing you to diversify your portfolio with tangible assets—bricks and mortar.

What is Crowdfunding?

Crowdfunding is a method of raising capital through the collective efforts of a large number of individuals, typically via online platforms. This approach allows people to pool their resources to fund projects or ventures that might otherwise lack sufficient financial backing. CrowdToLive utilizes this model to raise funds for property purchases, enabling investors to participate in the real estate market without the need for substantial capital.

What is Shared Ownership?

Shared ownership is a scheme that allows individuals to buy a share of a property while paying rent on the remaining portion. This model is particularly beneficial for those who may struggle to afford a home outright. CrowdToLive employs a unique shared ownership model under the Musharakah structure, which is compliant with Islamic finance principles, making it an attractive option for Muslim investors.

What is CrowdToLive?

CrowdToLive is a property crowdfunding platform that connects "Champions" (individuals seeking to raise equity financing) with a pool of investors. This innovative model allows investors to collectively purchase properties, providing a pathway for individuals to enter the property market without the burdensome costs typically associated with home buying.

How It Works

Investment Opportunities: Investors can browse various property listings on the CrowdToLive platform.
Minimum Investment: The minimum investment is set at just £100, making it accessible for many.
Ownership Structure: Once enough funds are raised, a limited liability company is formed to purchase the property, with investors holding unlisted shares in the company.

What They Offer Investors

CrowdToLive provides a unique opportunity for investors to earn returns through dividends and capital appreciation. The properties are rented out to the Champions, who pay rent that is then distributed to investors after covering operational costs. This hands-off investment approach allows you to manage your portfolio easily through their analytics dashboard.

Returns on Investment

Investors can expect returns in two primary ways:

Dividends: Profits from rental income are distributed as dividends to investors.
Capital Appreciation: Investors may benefit from an increase in property value over time, allowing for potential resale of shares at a higher price.

CrowdToLive vs. Traditional Shared Ownership

While traditional shared ownership schemes often limit the choice of properties and require a minimum investment of 25%, CrowdToLive offers a more flexible approach. Investors can choose any property on the market, and Champions only need to invest 5% of the purchase price, making it a more accessible option for many.

CrowdToLive vs. Buy to Let

CrowdToLive presents a compelling alternative to traditional Buy to Let (BTL) investments. Here are three key advantages:

Incentivized Rent Payments: Champions are motivated to pay rent, as unpaid rent will be deducted from their investment upon property sale.
Low Entry Cost: With a minimum investment of just £100, it’s much easier to get started compared to the typical BTL investment.
Shared Responsibility: Since Champions are also investors, the costs associated with finding tenants and property maintenance are reduced.

However, traditional BTL investments allow for greater control and decision-making, which may appeal to some investors.

Who Runs CrowdToLive?

CrowdToLive is operated by Elite Capital and Management Services Limited, a company with a strong background in Islamic banking and regulation by the Financial Conduct Authority (FCA). This regulatory oversight provides a layer of security for investors, although it’s important to note that investments are not protected by the Financial Services Compensation Scheme (FSCS).

Pros and Cons of CrowdToLive

Pros

FCA Regulated: Provides a level of security for your investments.
Good Returns: Potential yields of up to 5.5%.
Halal Investment: Fully compliant with Islamic finance principles.
Due Diligence: Comprehensive checks on both Champions and properties.
Low Minimum Investment: Start investing with just £100.
Diversification: Opportunity to invest in multiple properties, reducing risk.

Cons

No FSCS Protection: Lack of compensation options if the company fails.
Long-Term Commitment: Not designed for short-term investors.
Liquidity Issues: Selling shares can be challenging due to their unlisted nature.
Variable Dividends: Returns are not guaranteed and depend on rental income.
Limited Control: Investors have less say in property management decisions.

How to Invest

Investing through CrowdToLive is straightforward. Simply visit their website, browse available properties, and choose your investment amount. With a minimum investment of £100, you can start building your property portfolio today.

Is This Model Sustainable?

The UK housing market faces significant challenges, including rising prices and a shortage of available homes. CrowdToLive addresses these issues by providing a pathway for individuals to enter the property market with lower financial barriers. While the platform offers a promising solution, its long-term success will depend on its ability to secure institutional capital and adapt to market changes.

Final Thoughts

CrowdToLive presents an innovative approach to property investment, combining the benefits of crowdfunding with the stability of real estate. With a low entry point and a commitment to ethical investing, it offers a compelling option for those looking to diversify their portfolios. As the UK housing market continues to evolve, platforms like CrowdToLive may play a crucial role in making homeownership more accessible.

For more information on how to invest, visit CrowdToLive. If you enjoyed this article, feel free to connect with me on Twitter or LinkedIn.