Industry Interview: Frazer Fearnhead, Founder of The House Crowd.
What is The House Crowd?
The House Crowd was the first property crowd funding website in the world. We offer a hassle-free way for people to invest in property. We started trading in early 2012 and have helped democratise the property investment process opening up to many people who were previously unable to benefit from property investment. People can invest with as little as £1000.
Through our platform, investors can select a property they would like to invest in and crowd together with like-minded people to purchase that property. The profits generated by that property through rental or sale are then shared proportionately.
Why did you launch the concept?
I’ve been involved with property investment for many years, both investing myself and working with investor clients. In 2010 many of these cash rich clients were able to buy up it is extremely cheaply. However there are lots of other people I knew who wanted to invest in property but either didn’t have the funds for a deposit or were unable to get mortgages. People were extremely unhappy with the banks and the way they treat people, so we thought why not cut them out altogether.
How does The House Crowd help consumers over other crowd funding platforms online?
There are a number of properties crowdfunding websites that have started over the last few years. Each does things slightly differently. Our ethos at The House Crowd is to invest for cash flow and, although we do offer short-term development projects, most of our properties are medium to long-term buy to let properties that produce high yields-between 9 -10% in the case of single let properties and usually around 12% in the case of multi-lets (after all the bills have been paid). Some property crowd funding sites seem to be focused purely on the potential for capital growth. I appreciate this is attractive to many people but we regard capital growth as speculative – it is an added bonus rather than a strategy in itself. If a property is not putting money into your pocket each month then to my mind it is not a good investment and if you’re subsidising it, it is only going to be a matter of time before you run out of money and are forced to sell it. And, as we know, forced sales rarely achieve premium price.
How does Social Media play a part in the marketing of The House Crowd?
Social media plays a big part in our marketing strategy, we try and curate articles about property and crowdfunding as well as producing our own reports and infographics on property investment for release via social media. The “before” and “after” photographs of the properties we buy for development or refurbishment are also very popular.
Would you say that The House Crowd falls into the PropTech industry?
Yes
If you could offer any advice to other start up companies in the property industry, what would it be?
Create a brand that really stands out and is easily recognisable, offer excellent service and always deliver on your promises.
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