As an entrepreneur and global communications specialist, I’ve come across a diverse spectrum of investment avenues that are both lucrative and proactive.
However, the world of real estate has always intrigued me. Real estate has been booming around the world, particularly in the UK, with new housing, apartment and condo complexes being built at a phenomenal pace.
This provides a great opportunity for investment when it comes to making your money ‘work for you’.
During a recent visit to London, England, I came across an entrepreneur that opened my eyes to the world of Property Crowdfunding.
Abdullah Iqbal, Co-Founder of the Knightsbridge based start-up PropTech Crowd, reveals: “Property crowdfunding is a relatively new form of investment which allows multiple investors to come together to invest in specific properties. As each has a small share, the cost of entry is significantly lower than it would be if they decided to invest alone”
Belonging to an ethnic Muslim background, I learned that Abdullah joined his father who has been involved in the family’s property business for well over three decades.
However, it was during a trip to his native Pakistan that his father thought of introducing an interest-free property crowdfunding model that would also be attractive to the thriving global Muslim community, specifically in the UK.
While there existed property crowdfunding companies already, Abdullah and his dad saw an obvious vacuum in the market. “None of the property crowdfunding platforms were Shariah compliant at the time, due to them being involved with interest. Our motivation was to take the banks out of the equation, enabling investors to have shares and democratising the property market for everyone, while conforming to the Islamic prohibition of interest”, emphasises Abdullah.
The company’s core mission is to revolutionise property investment through innovative crowdfunding technology, allowing everyday investors to access high-ROI opportunities that they may have been priced out of in the past.
As I learned intriguingly, some of the key benefits of property crowdfunding are:
- · Industry is regulated by the Financial Conduct Authority in the UK.
- · Portfolio diversification.
- · Low minimum investments.
- · Geographic diversification.
- · A wide variety of deals.
- · Asset transparency.
- · No property management hassles.
- · Investing in the community.
As an individual with limited finances, I asked how is this relevant to someone, or even beneficial in the short or long run of things?
Abdullah adds, “Property crowdfunding is opening up property investment, allowing anyone to access benefits that were previously only available to high-net- worth individuals and asset managers.”
When investing in property, one of the biggest facets to look at is obviously one’s return on investment.
Would you invest in something with a high return on investment (ROI)? Of course you would. Anyone would! That’s a no-brainer. And Abdullah elaborates, “According to the Office for National Statistics, UK house prices have risen by 31%. This is far superior to the return you get from savings accounts.”
The model is applicable to both Muslims and Non Muslims. There are no bank involved, no loans with interest, and one receives full voting and financial rights with your investment.
So how is the Shariah compliance is ensured?
I learned that Mufti Abdul Kader, a renowned Islamic scholar and expert in Islamic finance, is a Shariah Compliance Advisor at PropTech Crowd. His duties entail making sure that all elements of the business are Shariah compliant, visibly and consistently.
When I asked Abdullah about ownership as a landlord, I was surprised at the answer. “Longer-term investments receive a yield – the rent – in addition to any capital gains you may receive when the crowd sells the property. You get the benefits of being a landlord without the huge start-up costs and with all of the administration done for you”, reveals Abdullah.
Where does the company go from here?
Abdullah smiles gently and replies, “Our 5-year vision is for our investors to have access to properties across major global cities. We want to open doors up in various countries for ordinary people to invest and own property anywhere. Owning property shouldn’t be difficult and we intend on creating a model that facilitates it in the most effective and beneficial way”.
The company is also actively cross-promoting with established platforms such as Ethis Crowd, the World’s first Islamic Real Estate Crowdfunding platform headquartered in Singapore and Islamic Banker, a marketplace for responsible investments.
He elaborates, “The purpose of Crowdfunding is to get together and accomplish something, whether it is a social cause, to support a start-up, or invest in property. As a platform, we find collaboration to be the essence of success. Our motives and vision are very much aligned with Ethis Crowd and Islamic Banker, so it is clear that if there is synergy, we should explore it.”
Conclusively, property crowdfunding is an exciting and rewarding method of investing in the property market. Since human beings will always require shelter as a basic necessity – regardless of how the economy is – the real estate market is incessantly glorious and an ever green form of investment. As an entrepreneur, we are told to think forward.