How it works

The Crowdfolio difference

We take a different approach to almost everything we do.  Like only investing in residential properties for one.  We also want to maintain a strong reputation for having as close to 100% tenancy as possible, making sure your investments get the monthly yield it deserves.  We do this by making sure our tenants are happy.  We treat them fairly, we make sure the property, both inside and out, is in the best possible condition, and whilst we do this differently to most – the old adage of a happy customer is a repeat customer could never be truer.

​How do we do this?  Well, two ways.  It’s not just you that invests in the property – we do too. We have what is known as ‘skin in the game’.  The returns we get, coupled with our small management fee, means we can look after our property, our tenants, and most importantly you, our investment partners.

The Crowdfolio way

Invest with Crowdfolio, become a member of the community and be given the ability to invest in any available Crowdfolio properties.

You add any amount you choose (a minimum of £500 is required – but each property may have different thresholds), to the particular property or properties you want to invest in. This can be done by a simple debit card or Paypal transaction. Your funds are held securely in a stand alone, “ring fenced” client account – and are only invested once the full funds are secured.

Crowdfolio will identify properties it believes will produce a good yield, in areas that have shown previously good value growth.  Let’s assume the total package price is £100,000 and you decide to invest £1,000 from your account in that particular property.  You can only invest a maximum of 20% of any single property value.

• ​To keep the maths simple we will assume that another 99 investors also contribute £1,000 to the crowdfund to fully fund the property at £100,000.
• Crowdfolio then negotiates the best ‘cash’ price (with no mortgage) for the property. Each investor within our example is issued with a share certificate for their share(s), i.e. their £1,000 investment.
• Crowdfolio proceeds to purchase the property through our solicitors and completion swiftly takes place.
• On completion the purchase price is transferred to the vendor. The agreed fee remains with our solicitors to pay for their services plus disbursements. The remainder is transferred to Crowdfolio to pay our fee of 5% of the property purchase price, to pay for the insurance policy and to fund the refurbishment/lettings preparation programme. All of these amounts will be clearly outlined in the initial property report.
• Crowdfolio begin to prepare the property for letting. The objective is to have all works finished within 2 weeks of the completion of the purchase of the property. If little or no refurbishment work is required to the particular property this 2 week period will be considerably shorter.
• Our dedicated letting agent will then find a suitable tenant who has been fully referenced.
• When the property is ready the tenant moves in after signing the tenancy agreement. All properties are let on an Assured Shorthold Tenancy for a minimum of 6 months. The aim is that the property will be tenanted no more than 4 weeks from the date of completion of the purchase of the property, although this time frame could be considerably shorter.
• Each Landlord is paid rent in proportion to their share ownership in the property.
• Every Crowdfolio investment has an Investment time frame, usually 3 – 5 years, shown on the initial report. This is the length of time the asset will be held by the company.
• The property will be revalued – and put to the shareholders to vote on whether to sell the property, or keep it active.
• When the property is sold the proportion in relation to each investors ownership is paid to them net of disbursements and in this way the investor receives the initial investment back plus the proportion of the capital growth.
• Once the sale is complete and all funds have been disbursed your funds are returned as a final dividend.