MercyCrowd has become the first international platform to enable investment in buy-to-let properties.
With an aim to safeguard investors from negative leverage risk in a stagnant or falling housing market, the ethical investment crowdfunder has produced an ‘equity only’ model, with investment from just £50.
The platform handles all property management issues including finding tenants, rent collection, maintenance and charges, insisting that every deal is debt free. This enables investors to enjoy the benefits of buy-to-let without the organisational burden.
Properties are available in Britain, Dubai and France, allowing impressive international asset diversification with annual rental returns of between 3.2% and 7.2%. Investors can also benefit from potential capital appreciation as well as rent.
Anouar Adham, chief executive and founder of MercyCrowd, said he wanted to demonstrate the benefits of investing in property without the drawbacks of taking on debt.
He commented: “By focusing on an international outlook through our diverse selection of properties across Britain, France and Dubai, we believe there is something of potential value for a variety of investors, from a first-time investor to those with dozens of assets.”
Each buy-to-let property is sourced by MercyCrowd and a price is arranged before the property is listed on the platform for investment. It is later purchased and the letting process begins.
The investment could take between three and five years to be sold, with rental returns paid on a quarterly basis, proportional to an investor’s equity holding.
Investing its own money in each property, MercyCrowd aligns the interest of both the platform and the investors. An apartment in Manchester worth £176,750 has already been fully funded, purchased and let out.
“The economy’s continual reliance on debt is concerning, which is why MercyCrowd is an equity-only platform,” Adham said.
“Debt-free property ownership is the next big thing and we want to be at the forefront of the trend.”