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What is property crowdfunding?

UOWN is about lots of people with small amounts of money, all clubbing together to fund something bigger. In this case, that’s properties. Until recently, property investment was only available to a small number of people with lots of money. Each active member of the UOWN community (a UOWNer) owns shares in one or more properties, alongside other UOWNers.

Property Crowdfunding Overview

Property prices have gotten pretty silly and now a lot of us can’t afford to buy a whole house. Crowdfunding platforms allow us to pool our money so that together we can buy a house, and everyone gets a share based on how much money they contribute. The property is then rented out and everyone gets their share of the rent, and as the house price changes the value of your shares change as well. So you make money from rent and, if the value of the property rises, you share in the capital growth. You can get involved with just £20 and we handle all the day-to-day management and hassle.

In the future, we will also fund developments, where the investment is about building new houses and making money from the gain in value rather than the rental income. Across the industry, investments can be in both commercial and residential property.

In the UK house can only have four people on the title deed. To enable a crowd of people to own a house we form a new company (a Special Purpose Vehicle or SPV) every time we buy a property and when you invest you become a shareholder in the SPV. SPVs can have lots of shareholders so this means hundreds of people can all own a share in the house. Each SPV owns a single property and is completely separate from UOWN so if something happens to us the SPV will be unaffected - some people describe this as ‘ring-fencing the investments’.

Property Crowdfunding Business Model

Property crowdfunding platforms help investors to pool their money to purchase properties. Returns are earned through a mixture of rental yields and capital appreciation. Each property is different and what an investor hopes to achieve will dictate which deals they chose to invest in.

Here at UOWN we hand-pick high yielding properties some of which came from our partners The Parklane Group. Each property we offer is put into its own Special Purpose Vehicle (SPV) so many people can buy shares in it and become shareholders. This is because normally a house can only have four names on the deed title. This means that investors buy shares in the SPV which owns the property. This structure also means that should investors wish to sell their share of the property they can without the property itself being sold.

Property Crowdfunding Advantages

One of the great benefits of crowdfunding property is the much lower barriers to entry (If you choose to invest with us you can start with as little as £1) and the ability to diversify and invest in a very 'hands off' manner.

Diversification

Research suggests that traditional property investors should hold more than one property to reduce their risk. UOWN's platform lets investors easily split their funds across different properties.

Ease of Management

There’s nothing worse than an angry wake-up call from a resident after the boiler’s broken on a chilly February morning. Dealing with local property management companies can have its difficulties too. Investing via a property investment platform gives you peace of mind, UOWN has very low fees compared to the industry standard (10% Vs. 15% ongoing management fee.)

Management Expertise & Experience

The properties on our platform are picked by people with a lifetime of experience in property investment. For example, Parklane Properties who manage some of our properties are specialists in the Leeds geography when it comes to student lettings. They have over 40 years experience and more than 3500 student beds under management.

Property Crowdfunding Disadvantages

Whilst investing in property can be a safe investment due to the fact it is backed by a tangible asset, it is not without risks. These include loss of capital and income from property investment is not guaranteed. To find out more about the risks you can check out our page dedicated to explaining all the risks.

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