Equity or P2P Property Investment – Which is Best?

There’s so much information out there on the currently hot topic of property crowdfunding platforms, yet with everyone touting their model as ‘the best’, the key differences between peer to peer (P2P) lending and equity crowdfunding may not be that obvious. As an investor or lender you need to make sure that you are aware of the risk and rewards involved in both types of crowdfunding.

So here are the pros and cons of each. Of course, each lending platform offers a different solution and terms, so please check carefully and seek independent advice before making any investment.

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Q&A with a Crowdahouse Member

We were recently asked some good questions by a new Crowdahouse Member which I thought would be useful to share with you here. Although detailed answers can be found in our FAQs, we realise that you may not have the time to read through them all. So here are your fellow Member’s questions and my answers.

How safe are the Crowdahouse Borrowers?

The Borrower must be a limited company or High Net Worth Individual (HNWI), and provide a property as security in the form of a first charge. The Borrower must also provide answers to a lengthy application form, after which all the information is thoroughly checked by us and the solicitors representing the crowd of Lenders. We turn down all projects that do not meet our strict requirements or that we regard as risky and unsuitable for our Members. And in the unlikely event that the Borrower misses a payment or defaults on the loan, then our proprietary Lenders’ protection system called Crowdasafe™ steps in to administer the property on behalf of you and your fellow Lenders. Any property income is diverted to pay your interest, or if necessary the property will be sold on your behalf to recover your money and any costs.

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Mortgage Tax Relief -The Dangers of Buying Property in Your Own Name

Owning via a Limited Company Has Never Made More Sense

Like most buy-to-let investors, most of my own buy-to-let properties were purchased in my name. Before the global crash it was easy to get finance as an individual but hard to get it as a company without giving personal guarantees. There were probably twenty lenders for personal borrowing for every one that would lend to a limited company. Few investors took the company route when buying.

Fast forward to 2015 and the Government has changed the rules on tax relief for personal buy-to-let properties when claiming mortgage interest. Actually, it’s confusing to call it a ‘relief’ – it isn’t; it’s a chargeable business cost. The ability to add this cost of borrowing to the rest of your business costs when operating as a landlord is now being phased out.

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