Doing your research and due diligence before investing in a property is essential and as important when investing in property crowdfunding as it is for any other deal. Rightmove and Zoopla are the most important places you can go but with the internet, as it is there are many sources of information to choose from.
Property Expert Series: Ben Grove from Property Moose
- What is Property Crowdfunding and is it a Good Way to Invest?
- How Does Property Crowdfunding Work?
- Secured Loans and Property Crowdfunding with Property Moose
- How to Choose the Right Property Crowdfunding Platform for You
- How are Investors Protected with Property Crowdfunding?
- What is the Future of Property Crowdfunding
- What are the Returns Like with Property Crowdfunding
- Should I Invest in Property, Stocks or Shares?
- What Problems could Crowdfunding Investors Face in the Future
- What Due Diligence is Needed Before Investing in Property Crowdfunding
- What Property Deals Work Best with Crowdfunding
Amy: What due diligence do you recommend, Ben, that investors do on property deals before they invest their money?
Ben: The Land Registry, Rightmove and heatmaps on Zoopla, property portals, things like are really handy because you can look at any snapshot of a local market.
So, I would personally look for, is there a property that has sold on the same street, within the last 12 months, that is of a similar standard or better or less?
Because, arguably, if there is a 3-bed, detached property on a street and it’s £200,000 and there is a property that’s sold, within the last six months, that’s identical for £220,000, then, arguably, the comparative evidence is quite strong.
And that is the crux of it.
If you see a property that has no comparable evidence, within a mile or two miles and you are basing your understanding of the value of the asset on information that isn’t relevant then your risk is certainly a lot higher than it would be if there is comparable evidence, locally, to state that, ‘actually, yes, it could be worth that much money’.
And thanks to things like the Land Registry and sold house prices… The Internet has given us access to this information.
And everyone loves things like ‘Relocation, Relocation’, the TV show and things like that. We do love property as a country, I think. There is the term, ‘property porn’, they call it, where you flick through properties because you like looking at houses. That’s what it is. I know I do.
I think people are becoming, because of television and what you guys are doing and Facebook and social media… People have access to more information about property than they ever used to.
25 years ago you certainly wouldn’t have access to any of that information. Pre-1995, the Land Registry didn’t exist.
So, if you are going to do your due diligence the mechanisms are definitely out there. You know, just to promote ourselves, please, go on our site, read our blog. Look at a lot of the pieces that we have got there about crowdfunding, referencing, due diligence, things like that.
Amy: And I know you mentioned in another one of your videos, you have some calculators on the site too which are quite useful, where people can put their details in and they can take a quiz and some advice which is more tailored, personally, to their own circumstances.
Ben: It is a sliding scale. So, it will give you a snapshot of a particular investment and it will say, this calculator is basing your return on X and you just slide it up or down, depending on the amount of money you want to invest and it will give you an idea of what that return would be, potentially, at the end of the term.
So, yes. We would like to think that there is enough information on our site for you to do your due diligence but you should always look elsewhere if you don’t feel comfortable.
Amy: Of course. Thanks, Ben.
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