The Crowdlords phenomenon

Thanks to companies like Seedrs, Equity Crowdsourcing for investments is proving safe and easy to take part in.

And while gimmicks like ISAs (Individual Savings Accounts) have given bank savings accounts a liquidity boost, most people still shy away from the stock market.

What else would you really do with your cash? You know as well as I do: if it's sitting in your account,  you're going to spend it. 

Better to invest. And what better place than property. Everybody (retrospectively conducted a survey of 3 people, who all said yes) wants to be a landlord. The easy money is just too tempting.

But buy-to-let loans require you to put money up-front. Yes, the cheeky banks want you to contribute some cash if you want their funny money to buy a rental property.

So that rules out most people. For those who could save, there just isn't the incentive. That ISA savings account that pays a whopping 1% interest pa just doesn't cut the mustard.

Step in Crowdlords and Property Partner.

The latter of the two, founded by Daniel Gandesha, have the best part of £20m in the bank to give their venture some wellie. And while that money has been put toward a rather pretty website, Crowdlords' Bethan Jenkins wins hands down for picking the name everyone will use to describe this sector with (since this was written, Crowdlords ain't doing so well).

Both aim to do the same thing though: allow anyone to become a landlord for less than £100. 

Seriously, my wife could buy all of Primark with that kind of cash. But if you want a different sort of return on your hands, clubbing together with other wannabe landlords seems the way to go.

Let's pause for a moment and reflect:

1. New services allow anyone to become a minority shareholder in a property investment.
2. More people invest their cash, resulting in more homes being buy-to-let.
3. Fewer properties are available for owner-occupiers to purchase.
4. More private rental supply is available on the market.

I'm no Mystic REP, but I think this might cause some tension.

So, being a half glass full type of person, I have some solutions:

A. These crowdfunding sites take a ethical and long-term view.
B. They invest in build-to-rent.
C. Increasing housing supply and also creating capital value for crowd-investors.
D. They borrow against/leverage these now rented out properties.
E. And rinse/repeat - giving investors a great return on capital.

It's probably too much to hope for the words landlord and ethical to be in the same sentence, but one can nudge people in a better direction.

Alternatively: replace the role of the mortgage, and rescue people from the rent trap by allowing them to buy a home without a loan.

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