TOP CROWDFUNDED REAL ESTATE INVESTMENT PLATFORMS
General Pros and Cons of Crowdfunded Property Investing
WHY YES?
- Able to get into a high-cost asset class with small amounts of money
- Hassle-free investing – no personal property management required as it’s all done for
- Documents including title deed sent to investors once filed with the regulatory authorities
- Able to diversify property locations and invest in multiple high yielding locations
- Even if in a down property market, diversification and low minimums help reduce risk
WHY NOT?
- Low liquidity – true for the whole asset class – minimum time to exit is usually 5 years (for early exit you must request the company and wait for someone in the pool to buy your stake)
- Property valuations fluctuate and there are management fees – true for the whole asset class
- Not a lot of say in property purchase/management/sale decisions – specific to crowdfunded real estate investments
- Unable to personally view the property – impractical when crowdfunding anything though
WHO ARE THEY?
SmartCrowd is a real estate crowdfunding platform, plain and simple. Users can receive rental dividends by buying and owning shares of whole property units.
They use a Special Purpose Vehicle (SPV) system to buy and own real estate. They are the first and largest regulated crowdfunding property investment platform for the Middle East market
ELIGIBILITY: Investors worldwide
MINIMUM INVESTMENT: AED 500 or USD 140
INVESTMENT COSTS/FEES:
- 4% transaction fee (split as 1.5% during purchase + 2.5% during sale)
- 0.5% admin fee annual on whole portfolio amount
PRIMARY HANDLING CURRENCY: AED and GBP
REGULATED BY: Dubai Financial Services Authority (“DFSA”), United Arab Emirates
WHY THEM?
- High monthly dividend yields than the competition (usually 5-8% per annum)
- Most listings are converted to holiday homes doubling your dividend yields
- Able to deposit via wire transfer and by linking your bank account to your portal directly
- Trust building – CEO and team very involved with the crowd with webinars and seminars
- Easy to use portal design
- Statistical and analytical metrics and all legal deeds and documents within the portal accessible after login for both current portfolio and listings
WHY NOT THEM?
- Unable to deposit via credit/debit card
- Takes a longer time than predicted to get deed and contracts compared to the competition
- Dividend notifications sometimes delayed
- Compliance process is a bit more drawn out
TRIED THEM OUT? (Level 1-5 scale)
Level 5 – Invested, making returns/made sale
Sign up for SmartCrowd to learn more
WHO ARE THEY?
Stake is a new real estate crowdfunding player in the UAE’s growing property fintech arena. They have a highly competitive structure and astounding property listings with a low minimums model. Dividends are paid out monthly and they use a Special Purpose Vehicle (SPV) system to buy and own the real estate.
ELIGIBILITY: Investors worldwide. Age 18+
MINIMUM INVESTMENT: AED 2000 or USD 540
Special offer for the first month of Expo 2020 festival is, 1 AED minimums + 5% cashback on deposits
INVESTMENT COSTS/FEES:
- 4% transaction fee (split as 1.5% during purchase + 2.5% during sale)
- 5% admin fee annual on whole portfolio amount
- 15% of profit if property sold at higher price than total funding target (this is not a fee basically)
PRIMARY HANDLING CURRENCY: AED and USD
REGULATED BY: Dubai Financial Services Authority (“DFSA”), United Arab Emirates
WHY THEM?
- Property listings in fancy and hyped locations (good for the hype and brags, not really for returns)
- Superb low minimum offers dropped occasionally (e.g. 1 AED minimums)
- Easy onboarding but thorough compliance
- Able to deposit with both card and wire transfer
WHY NOT THEM?
- Lower dividend yields than the competition (usually 4-6% per annum)
- Minimums differ across properties
- Platform is not very attractive and highly developed as user cannot easily see the most important stats such as dividend yield on the listings page itself
- Unable to open multiple listing opportunities with right click to make comparisons
TRIED THEM OUT? (Level 1-5 scale)
Level 5 – Invested, making returns/made sale
Sign up for Stake to learn more