An innovative South African fintech start-up is aiming to make property investment more accessible to a wider market with the launch of the country’s first ever property crowdfunding platform.
Crowdprop founder and CEO Zak Omarjee says this tech-focused offering, which will be available for properties countrywide, is a completely new way of doing things in an industry in need of disruption and innovation.
“Crowdprop enables the average individual to access real estate investments in a way that was never possible before. Our goal is to remove the barriers that had previously existed for investors who sought a foothold in real estate investment but could not afford this type of investment. Through a cutting-edge real estate crowdfunding approach, we enable investors to get their foot in the door in the property sector from as little as R10 000.”
Zak says the model aims to reach an entirely new pool of younger millennial and Gen Z investors.
“Real estate crowdfunding is changing the game for young investors globally. Millennials and Gen Z are known for their different approach to money in comparison with other generations. These investors demand more autonomy over their investments, and are surrounded by tools and technologies that not only allow more control over investments, but more diversity in terms of how they are spreading their risk among investments.”
Faadil Moti, Crowdprop Co-Founder and CFO, says a key aim for Crowdprop is offering investors greater transparency.
“Often investors go into a deal without knowing much about the property in question. Crowdprop aims to change this by providing investors with all the information they need upfront to make informed real estate investment decisions. Each property is carefully screened against our strict due diligence and financial models before it is listed as a potential investment on our platform. We scrutinise every detail and apply traditional risk evaluation methods in reviewing each property to ensure a safe investment.”
Faadil says a major benefit of Crowdprop is the simplicity of the platform.
“Crowdprop offers a simple yet lucrative way for investors to enter the real estate investment market. Apart from providing access to property in an affordable way, properties on the Crowdprop platform are fully managed, meaning the investor doesn’t need to worry about the complex and strenuous work involved in property management. Investments are 100% passive and investors can earn property income with peace of mind.”
How Crowdprop works
Crowdprop uses independent experts to analyse every property through a strict screening process. This process ensures that only safe and qualified investments are listed on the platform.
The property is divided into various shares so investors are able to invest in and own a portion of the property from as little as R10 000. The investor will own the property collectively with other investors. Investors are given shares according to their proportion of ownership and rental income is paid into the investor’s Crowdprop wallet which can be withdrawn or reinvested at any time.
Once the investment term has come to an end the property will be sold and the investor will receive their portion of the proceeds from the sale.
Crowdprop has strategically partnered with ELA Asset Management, a licensed financial services provider who will oversee and regulate all transactions that transpire within Crowdprop.
Changing the game
Zak says the introduction of real estate crowdfunding is making waves in a traditionally heavily regulated property finance system.
“Real estate crowdfunding is the fastest growing category of the global crowdfunding industry and is forecast to continue to grow exponentially in the medium term. While traditional property financing methods only allow high net worth individuals to access real estate investments, real estate crowdfunding democratizes access to real estate investment and allows anyone to access these types of investments.”
He says COVID-19 has further accelerated the digitisation of the real estate industry, pushing it to embrace technologies that offer a more effective way of doing business and rendering traditional methods obsolete.
“Real estate crowdfunding brings accessibility and convenience to real estate investments. By adding real estate to your investment portfolio, you will be able to achieve diversification and lower your overall investment portfolio risk. This maximises your overall return on investment as various asset classes react differently to global financial trends.”
No need to go to the bank
Crowdprop caters for the needs of both investors and property owners by connecting ready to deploy capital with lucrative property opportunities. For the first time, property owners and developers can raise the money they need without the need to go to the bank.
“Crowdprop enables property owners and developers to access a new source of finance that is decentralised. We allow you to raise the funds you require on your property through our platform in exchange for equity in your property. Developers can also partner with Crowdprop to raise the funds they need from our investors in order to realise their development goals.”
Register your interest in Crowdprop today or visit www.crowdprop.co.za.