Even if you are not 'cash rich,' most professionals or entrepreneurs are short on time. Even when the job is not that demanding, family commitments can soak up the remaining hours. If you want to get started with investing in property, it can be a real mountain to climb. What if it could be more straightforward and low cost to start?
Using a crowdfunding platform, the ordinary investor can become a property investor for a relatively tiny amount of money. Some opportunities have set the entry point at £100.00.
1. Do your homework
When you are first starting, you want to do your homework before you risk your savings. Read the information shared. Use Google and other tools to research the property, the broader location, the company or person running the project and other details. Use the online forum associated with the platform to raise questions. Some platforms will restrict who can post to those who have completed the registration process. Real people being honest about who they are, sharing their thoughts, questions, and concerns.
2. Spread your bets
When you are new, you will make mistakes. You will miss details or otherwise not understand what you are reviewing. Keep the initial investment small until you are sure you know how to evaluate the risks associated with what is on offer. Yes, your capital is really and truly at risk.
You also want to spread your bets because 1-off things can happen. A plane crashes into the building, a king’s remains were found on a site and other infrequent events can and will happen. There are risks you cannot eliminate. As they rarely occur, you can reduce the impact if it does happen by investing across multiple projects.
A possible solution. Divide the funds you want to invest in ten piles of cash. Then invest each pile into a different deal. The odds that a rare event will strike all ten investments at the same time are tiny.
3. Compounding is your friend
The eighth wonder of the world is compounding. Watch how things can grow when you start early, and you let compounding perform its magic.
If you invest some of your cash in a project, you are more likely to pay attention to what happens. You have a vested interest in the outcome. Over time, you learn what worked and what did not. With your growing competence, the risk of mistakes actually shrinks. Do remember, YOUR CAPITAL IS AT RISK!
Start small, start early and put in the time to learn what you are doing. Learn by doing. Invest to learn! Also, reach out to ask for assistance. Then pay it forward by sharing what you know with others. Together we all can do better. Let the power of the crowd work for you.